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What are the Benefits of ERP?

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  • Written By: K.C. Bruning
  • Edited By: A. Joseph
  • Last Modified Date: 26 October 2016
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There are several reasons why enterprise resource planning (ERP) can be beneficial to an organization. This type of integrated software system provides a comprehensive view of several departments of an organization, which can enable employees to improve current and future operations on every level. The primary benefits of ERP include greater ease in daily operations, cost savings, improved company performance and more effective strategic envisioning. These benefits can be found within and among different departments and across an entire organization.

One of the major benefits of ERP is easier daily management of an organization. With access to real-time information, employees are better able to make decisions quickly and accurately. Departments such as human resources, finance and manufacturing spend less time communicating with each other, because they can all draw information from the same source. Better communication also reduces the number of time- and money-wasting errors within and across different departments.

The potential for significant cost savings is one of the most important benefits of ERP. With access to a continually updated system, employees are better able to keep a more accurate inventory. An ERP system provides the information necessary to plan for future expenditures with more efficiency and to project fluctuations in company needs and resources. A centralized system also reduces the need for additional staff members to track, update and communicate essential information.

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One of the other primary benefits of ERP is improved company performance. With real-time information, employees are better able to help customers quickly and efficiently, thus helping to create return business. The comprehensive system also provides easy insight into problems and aids in research and effective decision making.

ERP can also aid a company in strategic envisioning. By giving executives a comprehensive view of all primary company functions, the system can provide the information necessary for effective planning. The strategic benefits of ERP include improved financial clarity, a detailed picture of what needs exist and a diverse collection of information that can provide insight into how the company should manage future operations. ERP can also help employees avoid potential problems with well-informed planning.

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