Importance Of ERP Systems

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To understand what is meant by Enterprise Resource Planning (ERP) systems, you need to step back and think about all of the processes that are involved in a business. These processes may include inventory and order management, accounting, human resources and CRM. At its simplest level, ERP software integrates these functions into one complete system to streamline processes, information and data-flow across the entire organization. In order for organisations to compete in this rapidly changing and integrated marketplace, ERP systems must be employed to ensure an effective, efficient and reliable system for information flow in between different functional areas.

ERP systems are bought off-the-shelf then tailored to the businesses needs. This
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These can cost companies millions of dollars in lost revenue and unrealized benefits. Many executives see ERP solely as an IT project and this is where their first problem lies. Without upper management support, aligning business process with ERP systems is near impossible. Executives need to be aware that you cannot expect the inefficiency within your business to disappear as soon as implementation had taken place. Often businesses believe their ERP system has failed, because they set unrealistic goals and timeframes for the system to be implemented and benefits to be recongised. The ‘W effect’ play’s a critical role in understanding the life cycle and shows why monitoring of the system is critical. If original effort was over ambitious, results may be much higher than expected in terms of initial investments in training, testing and time. In turn this will result in loss of revenue, benefits and staff motivation. For this reason, businesses need to make sure they review their goals frequently and retune where necessary for implementation …show more content…
Yet SAP has come out ahead of Oracle and Microsoft in multiple studies. The reason behind SAP being so popular within the marketplace is based on its adaptability and maintenance for all types of business. The Implementation of SAP can take on average up to 20 months, which is longer than their main competitors Oracle and Microsoft who are both averaged around 18 months. The cost for SAP is also extremely higher than it’s competitors averaging around $16.8 million. Yet, they outshine their competitors in the benefits recognized and overall satisfaction. SAP is dominate because of their high satisfaction levels, and although their prices are higher and implementation longer, businesses whom are more likely to use SAP ERP systems within their business are large corporations who cannot afford a high risk factor and therefore are willing to purchase a lower risk product at a higher

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