ENTERPRISE RESOURCE PLANNING EXECUTIVE GUIDE  

AN EXECUTIVE'S GUIDE TO ERP SOFTWARE SYSTEMS

ERP SOFTWARE BENEFITS
Enterprise Resource Planning (ERP) software systems have achieved both strategic and tactical benefits never before attributed to busines software systems.

The benefits of a single, enterprise-wide, shared and real-time information system are many and varied, however, some of the more common advantages include the following:

• Business processes run from cradle to grave throughout the organization in a single software application. While a seemingly simple and obvious strategic benefit, this concept goes against the norm of silo’d departmental information systems that became the norm in the 1980’s and 1990’s.
• With one information system, the need to consolidate or synchronize multiple disparate systems is eliminated. This consolidation also eliminates staged data and timing differences which could provide different answers to different people inquiring on the same question.
• Shared information can be real-time information. With all company data residing and processing in a common database, all those who access or interface to that database can get identical results for one version of the truth and the reduction of conflict between systems.
• Enterprise standardization of terms and objects. With multiple disparate systems, terms like ‘resource’, ‘order’ or ‘transaction’ could have varying definitions in different departments. The standardization on a shared system forces standardization of a common language throughout the organization.
• A big boost to compliance and governance. Regulatory compliance is greatly facilitated when all data is centrally stored, secured and managed. Changes to data radiate throughout the company providing every department or data beneficiary with the same updated and consistent results.

SOFT COSTS ARE REAL COSTS
The concept and tangability of software costs and benefits normally arises as part of the projected cost-benefit analysis or total cost of ownership (TCO) calculations. Many companies are relunctant to include soft costs and difficult to measure benefits as they are quite subjective in nature and lack precise measurement techniques. Nonetheless, benefits such as staff productivity due to increased automation, better management decision making stemming from more timely and better information and decreased cycle times as a result of cross-departmental integration are all examples of intricate and hard to measure factors that are also highly material and extremely influential to both the cost savings and realized benefits achieved with ERP software systems.

Continue to ERP Pitfalls

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