Enterprise Resource Planning

An ERP system is an integrated solution, with a central database and the luxury of updating it at a click of a button through a single entry. Data, in an ERP system has to be entered once; there are security controls for such entries too, a person can enter but cannot post to the system unless it has been approved by a supervisor, thereby, reducing errors, time and manipulation of accounts. Generating reports is more of “a walk in the park” than those laborious hours trying to import data in to spreadsheets (like Excel) processing them and then printing them for reporting purposes. Analysis, planning and management can be done off-screen through ‘mouse-clicks.’

Ultimately, time and resources are shifted to innovation, problem solving and effective customer service rather than spending hours entering data, processing, verifying them.

I am not going to talk about ERP history, or how it came in to being, you have Wikipedia for that

ERP help reduce operating costs


There are two primary cost reductions a company can benefit from, being:


1) Aligned processes

The ERP attempts to integrate business processes across departments in to a single enterprise-wide information system with the sole aim of having uniform processes across the organization; which in turn helps in having fewer, yet common processes, thereby, making work flow faster through the processes.

An organization that flows on a uniform processes set (or tries to operate as close to bringing them to uniformity as possible) wastes lesser time, effectively manages process quality far better than those that work haphazardly and on a “as-and-when-required” attitude.

Job rotation is then easy, unlike, traditional organizations where companies come to a standstill if the relevant person is not available.

2) Paperless environment

Going ERP is almost as good as going Green. It’s like going paper-less. From your paper purchases to printer cartridges to the millions of trees, you will feel the difference (at least the earth will).

ERP help facilitate day-to-day operations

One point of entry and the data can then be processed in different ways to convey different information to different stakeholders. A sales entry can mean increase in revenue for the sales and accounting manager but will also mean a rise in the accounts receivables for the later as well as it will also mean target achieved during the period for the sales manager. Credit controller also now has to add another name to his list if the collections are not in time. The salesmen can log in to see how much commission they will be earning for the period.

Over and above, sales then can be broken up, in to product, category, location, margins and even on a sales man basis; enabling learned decision-making.

ERP provide Real-time online updated records

When companies work across geographical locations, they need to know exactly what is happening on a real time basis. This is more important for a trading/retail company. If it has a real time availability of its inventory stored in warehouses 100 miles from the sales office, it is still in a position to bid for the order aggressively unlike any other that would have a stores within its vicinity but no updated real time records.

ERP enable strategic planning

• Reduce risk
• Optimize IT spending
• Retain top performers
• Improve productivity and insight
• Support changing industry requirements
• Reduce costs through increased flexibility
• Improve alignment of strategies and operations
• Provide immediate access to enterprise information
• Improve financial management and corporate governance

The ERP Perfection


ERPs come from different vendors with different variations, some may be good for a trading enterprise, where as another may suit a manufacturer better, likewise, one may suit a services provider better than the other two.


Which ERP would suit you better is something that would come up after a thorough analysis of the business and its needs.


Some companies buy the ERP software, whereas, some develop it in-house with the supervision of experienced consultants.


Like in my first blog (right at the bottom of this page) you would notice I have talked of an ERP in supply chain management. Aligning your SCM to almost perfection is just one example of having a well implemented ERP.

 Below is a list of few modules of an ERP to help ascertain the strengths and benefits of an ERP to the business.

1. Treasury
2. Human Resource
3. Plant Maintenance
4. Production Planning
5. Quality Management
6. Financial Accounting
7. Sales and Distribution
8. Materials Management
9. CRM (Customer Service)
10. Logistics Information System
11. (Project Management Systems)
12. Supplier Relationship Management
13. SCM (SAP Supply Chain Management)

Would you have any queries please feel free to write to me and/or my friend, Mr. John McGrann, CEO of Drive ERP, we would appreciate the opportunity to help you.