Will ERP reduce overheads and improve efficiency of my business?
ERP (Enterprise Resource Planning) Systems are an extension of the older MRP (Materials Planning Requirements) systems which first emerged seriously in the late 1970's with the advent of mid range computers. The sort that made Digital Computers famous.
These Materials Planning Requirements addressed the issue of managing Stock in a large Manufacturing or Distribution system, in such a way that it may have integrated Departments in a large Co. for the first time in any meaningful sense. Engineering or Manufacturing would be advised that Customer A has placed an order for Part B for delivery on a given date. The Computer based MRP system which was most likely very expensive and supported formally by a large internal IT or Computer Department was supposedly visible to all part of the organisation.
This visibility meant Stores could check the availability of the parts or sub assemblies required to build the Job. Parts which they did not make were passed to Purchasing by way of requisitions for Ordering, preferably when required by Manufacturing. Stores would receive the Part according to the Purchase Order and put the part away in the Stores Area. This activity is now known as logistics in many companies. Obviously the later the Purchase Order part arrived and the sooner it was assembled into the Job, the less Capital was tied in the business. These efficiencies (Lean Manufacturing) are essentially the same as CRM, ERP and are being extended to every business on the planet big or small.
This Technology has extended to most layers of the Organisations and there are flavours available for all types and scales of Industry, Commerce and Finance:
Sales & Operations Planning - Demand Management
Customer Relationship Management
Call Centre Management
Good Manufacturing Practice ensuring Quality Control
Integrated Ordering Systems
EDI for Retail Orders
Manufacturing Capacity Management
Integrated Financial Ledgers & Reports
Project Control, Timesheets
Costing Systems
Human Resource Management Systems
Management Reporting
The Technology costs a fraction of the old system and, using Desktop and the Internet, can be delivered quite quickly to most organisations. The same caveats remain true since the earlier system
Ultimately it boils down to one thing that data once entered in a company IT ecosystem is visible to all parts of the organisation and never has to be re-entered checked, etc. Technically a Dealer in a Bank Trading Room should be able to take a Customer Order, debit the instruction from the client account and Pay the third Party automatically saving a fortune for the Bank in question and client Co. I don't know many Banks offering this level of service, most banks operate separate Computers systems which result in poor customer service levels and an increase in costs for the Bank.
Manufacturers should be able to take a phone call from a customer regarding delivery status and the Tele-Operator should be able to confirm that the Order is being built, no parts are waiting, it's the right colour and will be on-time and on budget. They shouldn't have to ring back the following day, having promised to do so in 30 minutes, after having taken all day to find out the information for the customer, no organisation can place a value on being able to advise customers immediately about their orders status which is all they are interested in.
That's what ERP is all about, creating a Lean Business that merges all of its value streams seamlessly in the most efficient way, at the lowest cost, making the maximum return for its investors and enabling the highest levels of customer service.
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