Effects of ERP Applications in an Organization
Introduction
ERP systems are packaged software applications that provide a range of applications required by most businesses within a single framework, using a modular approach¹. These packages software include accounting, procurement, etc. all bundled in one application, and sharing one database. An organization might therefore choose the appropriate module based on its requirements.
ERP information systems encompass all aspects of an organization which include technology, process, organization, and people. In this regard, ERP applications aim to enhance an organization in all its all aspects. These organizational aspects are enhanced in the following ways:
Process
ERP processes are aligned to best practices and best practices are aimed are process improvement, improved information, and standardization. The process of supply chain management is one the major beneficiaries of ERP applications as it allows timely access to crucial manufacturing, inventory, and logistics-related information². This therefore results in enhances efficient service delivery to the customer as well as well as organizational staff.
Enhanced processes such as supply chain, result prompt delivery of goods and services as well as appropriate levels of stock for the organization².
Technology
ERP further aims to integrate technologies such systems and databases therefore eliminating redundant data, shadow systems and increase efficiency in an organization¹. This has far reaching consequences such as cost saving on technologies for the organization as a whole.
In the case of Cloud-based ERP on indeed onsite ERP, an organization is given an opportunity to ride on the state-of-the-art software as well as hardware since hardware and software requirements of ERP applications are of standardized to leverage the benefits of the application. ERP applications are standardized to leverage the benefits of the application in terms of asset(hardware and software utilization).
People
ERP benefits people both individually and collectively in an organization. Individual benefits include professional development, empowerment, job satisfaction, improved conditions, and job security. These benefits are drawn during installation, management, and maintenance of the ERP application in an organization¹.
Further, ERP benefits individuals collectively since most routine core organizational activities will be handed by the ERP application therefore releasing staff to concentrate on other organizational activities hence benefiting the individuals collectively¹. Applied effectively, this free time could be used by staff for the much needed but abandoned activities relating to Research and Development.
Organization
ERP enable organizations to align their organization business goals with best practices since ERP applications are designed with best practices in mind. This therefore enhances the service and quality, vision of integration, mandate and image which are all aligned to the business best practices¹.
Business process reengineering in an organization is also enhanced to meet the organization requirement of ERP applications. This therefore leads to an efficient organization. This therefore leads to an efficient organization and efficient organization is the ultimate strategy for any organization.
Conclusion
ERP enhances an organization in all its aspects from enhanced processes, an efficient organization, skilled people, and state of the art technology. In this regard, ERPs have to be aligned with the overall strategy of an organization.
However, from the four aspects of an organization mentioned in this paper, process and technology aspects have a lot of effects on an organization values and aspirations¹. This is because aspects such as process touch on the core functions of an organizations such as supply chain, etc. As the technology aspect, expenses are the main areas of concern. These two aspects directly impact on the overall strategy of an organization.
Bibliography
³ Sadrzadehrafieia, S., Chofrehb, A. G., Karimi, N., & Riza, S. (2013). The Benefits of Enterprise Resource Planning (ERP) System Implementation in Dry Food Packaging Industry. ScienceDirect, 220–226.
