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What is enterprise resource planning?

Enterprise resource planning is a fairly new concept in business. The goal of ERP is to consolidate a company’s software needs into a single program. This enables a business to run more efficiently. All the data goes to a central location that all departments can access. In theory, the idea sounds simple, but in reality it is a complex process. In today’s technology-driven, competitive market, it is imperative that upper-level executives learn ERP processes and understand the importance of implementing ERP software.

Companies that don’t utilize ERP are operating inefficiently

Most companies use multiple platforms to perform the various functions that keep the business running. The accounting department may use one program for billing, invoices, and employee compensation. Human resources will use a different program for storing employee data and payroll and benefits information. Customer relations will have a specific program for customer data and orders. Every department necessary for a business to run is using a specific program to perform its function in the company. The problem is when these programs don’t communicate with each other.

This can lead to frustrated customers and disgruntled employees. If a customer has a question about an order, he or she may contact customer relations first. The customer is then transferred to accounting for the invoice. Once the invoice is retrieved the customer is sent to the warehouse to get a status on the order. The warehouse tells the employee that the order has shipped and the customer is sent to distribution. By the time the issue is resolved, the customer has been passed around to four or five different employees, all of whom had to stop what they were doing in an effort to assist the customer.

What does ERP do?

Enterprise resource planning creates one system that a company uses. Now, when a customer calls in to customer relations, the representative can see all the information regarding that customer. He or she can retrieve the invoice, see the status of the order and get the shipping date of the customer’s order.

Advantages of ERP

Enterprise resource planning has multiple advantages. One advantage is ease of access. It gives employees access to multiple functions in a company and increases the effectiveness of customer service. Also, by storing all data on one system, it reduces energy uses and requires less computer storage.  That, in turn, translates into cost savings for the company, thereby increasing profits.

Be competitive with ERP

Some online MBA courses show students how to learn ERP. More companies are looking for ERP software to cut costs and enhance the customer experience. ERP systems are focused on achieving the end result in the most efficient manner, and they put the focus on the customer.


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