ENTERPRISE RESOURCE PLANNING OR ERP HAS BECOME POPULAR AMONG PHILIPPINE BUSINESSES, AND FOR GOOD REASON. ERP ENABLES THE VARIOUS BUSINESS UNITS OF AN ORGANIZATION — EACH PERFORMING SPECIALIZED TASKS — TO INTERACT AND SHARE INFORMATION WITH EACH OTHER IN AN UP-TO-DATE AND SEAMLESS FASHION.
The quality of this interaction will ultimately have a bearing on the financial aspect of operations. Poor exchange of data will lead to wastage or shortage, or delays. The customers and creditors will not be satisfied. Delays may translate into penalties or loss of business altogether.
The separate business units may initially have their own database of the information pertinent to their specific functions. For example, the sales department will naturally have a record of orders made — what products and in what quantity by which client.
The inventory department for its part will at any time have information on whether or not raw materials or finished goods are available. Inventory would know whether these are on hand, or their availability would take some time. Human resources would know if there are enough people to perform a certain type of job. The distribution department would know the fastest way to get the products to the customer. Finance would determine whether payments are supposed to be made and when. If business is brisk and fast moving, there is a great chance that the various business units will have a difficult time updating their own information, much less share accurate data between and among each other.
Thus, inventory may tell sales that there are enough raw materials when in fact these materials still have to be ordered from suppliers and it would take many days for these materials to arrive.
Hence, the start of production will also be delayed. Human resources may believe there are enough workers to take on the job, which may have been ordered on short notice. But if there are not enough workers on hand, the company will have to hire them at rates higher than market for the urgent requirement. This means higher labor costs for the company.
And then, should the finance department fail to inform the concerned department that payments need to be made and collected, such delays would incur fines and penalties or result in cash flow shortages.
All these inconveniences will be avoided with the use of an ERP solution. With advances made in the Internet, cloud ERP solutions are now also available. These solutions do away with the costly and physically limiting traditional ERP
Software because it allows for easy access anywhere, anytime. In the Philippines, there are numerous ERP solutions providers. They are all well-versed with the technology and how the software acts as an enabler that pushes
The business to reach its full potential. The more seasoned providers go a step Further and lend their business expertise to their clients. It is thus crucial for businesses, aside from making that decision to use an ERP system, to ensure that they engage the services of an ERP solutions provider that knows not only the abilities and limitations of the technology but also possesses Business savvy. After all, using an ERP solution is not just an IT investment but a strategic business decision.
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