An Enterprise Resource Planning System Essay example

3821 Words Jun 16th, 2016 null Page
Introduction Through accurate, real-time information about daily operations, companies can make smarter, faster decisions allowing them to reduce operational costs by 23% and administrative costs by 22% (“6 Compelling ERP”). An Enterprise Resource Planning system, also referred to as ERP, is a management tool that integrates all departments and functions across a company onto a single system allowing companies to make those faster and smarter decisions. Specifically, the system gives individuals a global view of data, improves financial compliance, automates business operations, and enhances customer service. One of the central features of all ERP systems is they share a database that supports multiple functions used by different business units. ERP systems improve operations such as manufacturing, shipping, purchasing, and accounting. Attached is a visual depiction showing all departments connected through the central ERP system:

Aside from connecting departments, ERPs also handle functional area transactions such as inventory management, invoicing, sales, & cash collections. Many companies small and large are using ERP systems in a broad range of ways across many different industries. In 1990, Gartner coined the term ERP, but its roots date back to 1960. Then the concept was applied to inventory management and control. In the 1970s, systems evolved into Material Requirements Planning (MRP) systems which aid in production scheduling. By 1990, the planning systems…

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