Every company is looking to increase its market value. For, this they are re-looking into the factors which affect the company’s productivity and management. Every company is looking to use their resources effectively so that their business is done more effectively and efficiently. Most of the companies decides to use software which could manage their whole enterprise and the information should be available with the enterprise.

With this need, enterprise resource planning came into picture. Enterprise resource planning is a software based system which helps in managing every functionality and operation of the company. It ensures that there is proper and reliable data communication between various parts of the business units. This helped many businesses to increase their productivity and cut costs on management related funds.

Usage of enterprise resource planning software have helped many companies in analyst and optimize their business process, enhancing the supply chain management, efficient control of inventory, enhanced decision making by providing precise reports, integrating various business units and developing transparency all over the business.

In a typical corporation which implemented ERP successfully , the customer sales department can get access to the purchase department, inventory department data can be viewed by the sales department and the top management can see the overall structure and the work flow of the company with a single click. This is what a comprehensive enterprise resource planning software is capable of.

The impact of the enterprise resource planning can be seen evident with the company even before 12 months of implementation. With proper planning and successful implementation ERP can provide a strong platform for better productivity. The implementation of ERP helped many companies in increasing the value chain in the market. It also created confidence among its customers. Share holders also bought shares of these companies with confidence.

In previous stage before ERP comes into practice, companies used separate software for each service. Separate tools were used for sales tracking, financial management and for human resource management. Lots of employees were employed for managing separate software. This resulted in redundant technology, service was poor and the staffs found it very difficult to integrate data from these services and create a report out of it.

Critical information could be extracted from such independent software. But, with the advent of enterprise resource planning software, managing all the resources under a single system was made much easier. Also, lots of manual work involved in resource management was cut down to a large amount.

Compared to the big industries, small and medium sized industries used the ERP efficiently. In general enterprise resource planning can be used to introduce standard industry process, implementing integration across various inter related business units within the company, real time access to the information and creating analytical report with a single click.

The science of business performance management heavily relies on the ability to create a series of critical tests to assess whether the program is successful or not. These do not necessarily have to be on a strategic level. They can also be set on an individual or local basis.

The first stage is to set up a business data analysis program with the specific goals of trying to change the performance levels of the organization from the less desirable to the more desirable characteristics.

The desirable characteristics are crucial because they will contain a basis for ambition as well as a realistic target based on the knowledge of the industry as a whole. Once these goals are measurable, they then become key performance indicators (KPIs) that will form the basis of any assessment of the project either on a one off basis or on a continuous basis.

Key performance indicators are always supported by data and therefore it has to be a management priority to ensure that there are facilities for presenting accurate data in a timely fashion. Obviously performance management will mean different things to different people and there might be the scope for allocating different data sets or schedules depending on need. Sometimes there is an obsession with financial performance indicators whereas it is possible to measure the non-financial data which gives you an accurate picture of the organization.

There are a large variety of business performance metrics and indicators, and they cannot be exhaustively described within the constraints of this article. However I will briefly touch on some of the major ones; the most important metrics will measure customer satisfaction and their relationship with the company. This is the basis for any profitability and therefore they ought to be prioritized.

The accountant will naturally pay close attention to the financial metrics such as cash flows, debt, capital investments and the speedy conclusion of commitments. Without finance the company will fail so managers must never ignore the implications of finance in any business performance management activity that they undertake. However this should not be to the total exclusion of other criteria.

There are also non-traditional metrics that are slowly creeping into business practice. For example twenty years ago the environmental impact of business activities was largely ignored as a fad for the dopey rich kids or the political correct tree huggers. The pursuit of the bottom line was king and such concerns were not even subordinate. They were simply excluded altogether. However as the awareness of ecological issues has grown, it has been necessary to insist that this is included as part of the core metrics.

As always the key is to understand what is need to get your business to the place you want it to be. The metrics and key performance indicators are the tools for you to assess whether you have been successful in your business performance management program.

Advantages:
A company which doesn’t use ERP really finds it difficult to have proper communication with each other business units. Even though many software applications are available to share the resources efficiently, ERP overtakes every other software with the fact that ERP are centralized service for any kind of information available related to the company.

Some of the major advantages in using ERP are discussed below:

1. ERP systems have many software components included within it which helps in forecasting data. Forecasting can’t be done more efficiently with other software. Since ERP includes many software which tracks past history of information, forecasting is done in simple way. This also helps in efficiently managing the inventory and thus the productivity of the company increases automatically.
2. Different business units should have proper communication. Proper communication ensures good productivity and efficiency. ERP software acts as a medium through which proper communication is made between the business units.
3. Using ERP helps in making design engineering better. It helps in shaping the product better.
4. Tracking the order and fulfilling the customer needs is also a main task of the company. ERP provides this service with simple user interfaces. Orders are tracked efficiently and delivery is also monitored for the fulfillment of the customer.
5. ERP tracks every financial data starting from the invoice to the cash receipts. So, using ERP software makes it easier to track the revenue cycle.
6. The inter dependencies between the different materials in the process of making the product can be best managed by ERP.
7. Matching of costs of the product, inventory and order purchasing can be easily managed by ERP.

Above mentioned advantages are generic advantages of ERP systems. Benefits of system centralized ERP are discussed below. System centralized ERP have data in one place. Some of the advantages of this kind of ERP are:

1. The problem of synchronizing complex systems like human resource, finance, sales and marketing are handled and eliminated by these ERP systems.
2. Cross functional services which need communication between different business units are permitted by this system.
3. A top down view of the organization can be easily figured out.
4. A considerable amount of risk in losing important data is eliminated.
5. Production time and delivery time can be reduced to a high level.

Disadvantages:
One of the common problems which ERP implemented companies now face are the inadequate funding required in providing training for using the ERP. Other than these, some of its disadvantages are discussed here:

1. The customizations options available in the ERP software are limited.
2. ERP systems are expensive.
3. After implementation, migration of the system might become expensive.
4. Sensitive information regarding a company can’t be shared efficiently with ERP.

With the help of enterprise resource planning the company can streamline their work flow, can provide enhanced support to their customers, real time availability of data on sales, inventory and raw material availability, reducing a considerable amount of paper works and finally it assists in the global operations.

As a whole enterprise resource planning is software designed to boost the company’s productivity. Though there are lots of advantages with enterprise resource planning, there are also few drawbacks with this. One of the main drawbacks is that it takes more time and amount to implement.

Let’s see some of the key features which make this software a huge success in the market:
1. Financial management:
Corporate Financial administration is always a big and important task in any company. Every company is under scrutiny of monetary bodies which regulates the financial flow. ERP has a good financial administration component which makes it a attraction for many companies. There are several benefits in enterprise resource planning related to financial management.

Starting from the invoices to the cash receipts, ERP can be customized to store much information and if effectively used, ERP can help in stabilizing the financial situation of a company. ERP provides real time tracking of cash flow and timely financial reports can be created.

2. Human resource management:
Some of the key factors in the human resource management are payroll management, employee administration, tracking the personal information of the employees and little other legal information. Using the traditional human resource management was complex. Managers found it very difficult to track the progress of an employee and also on tracking the information regarding the employees.

With the advent of ERP, a lot more information can be gathered and maintained related to human resources. This involves talent management, recruitment management, scheduling, attendance and time management, etc. The tools can also be customized based on the need of the human resource managers.

3. Supply chain management:
Assessing the demand and matching the needs of the customers is also one of the key functions of the business. With increase in the competitions, this part is gaining much importance in a business. Failing to collect and forecast this information can have adverse affect on the productivity. It can also degrade the company’s status in the economy. ERP software can take care of the supply chain management right from the beginning till the end.

4. Customer relationship management:
This method also called as CRM is the most required part in sales. Customers are the most valuables to each company and they work based on the needs of the customers. CRM ensures reliable and proper communication of customer related information to the sales team and then to the marketing team.