Enterprise Resource Planning: The Case for ERP

The character and sophistication of technology as a project management device has altered not only how the contemporary enterprise manages both processes and projects but, in fact, altered the very structure of the operational infrastructure within those same enterprises.

While there are many technological innovations that have facilitated the typical project manager’s task list and execution of core competencies, such as: the simple fax, the Internet, e-commerce, networking, scanners, third party service providers such as off-site storage facilities both for data and physical records, and a host of others, none currently holds as much promise nor is as pervasive as the current list of enterprise resource planning (ERP) software systems.

These packages, designed to facilitate many of the transactional processes of an enterprise’s internal value chain, have the potential to maximize every functional process within a given firm and to remove a large percentage of the intuitive commitment traditionally required of management that makes ERP so vital in today’s business environment.

ERP systems automate many of the traditional project manager’s roles allowing organizations to reassign, reassess or remove redundant positions and redundant processes.

ERP systems are essentially a group of software applications that are designed to handle different functional areas within an organization: finance, AR/AP, HR, logistics planning, inventory, marketing, customer service to name a few. While it could be argued this in itself is not novel and to an extent the idea of a software program designed to enhance the functional processes of a department isn’t revolutionary, ERP systems are considered the holy grail of organizational effectiveness because of their ability to integrate cross-functional departmental processes within a single application suite.

ERP systems are so coveted because they both simplify and automate business processes. Simplify by removing redundant repositories of data as well as redundant systems throughout the enterprise and automate by adding another layer of technologically complex infrastructure that accomplishes tasks that previously had to done manually.

The redundant depositories of data are removed because, since the ERP system is fully integrated, all departments access and manipulate data from a single database with numerous fields.

For example, while customer service may access a customer’s data to change an address or note a complaint, billing will access the very same entry to generate a bill or reconcile payments. In years past each of these departments would have maintained separate databases that needed to be maintained independently and periodically reconciled.

The inefficient use of an enterprise’s resources is obvious. The internal storage capacity of the organization was doubled, or in some cases tripled or quadrupled due to all the storage space dedicated to various databases, IT human resources experienced elevated workloads due to maintaining redundant systems as well as backing up all of these various applications and databases.

With ERP inventories are maintained in real time and the reordering process is automated because many suppliers’ systems are integrated into an enterprise’s ERP system and provide product based upon predetermined inventory levels. Previously such a process would have required a staff of personnel with project management skills to manage this process across the organization. ERP strategically designed and properly deployed, can elevate the efficiency of any enterprise and consequently increase revenues while widening profit margins.