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Amity Business School

Importance of ERP Systems


ERP is most important to companies because of their improvement in the way the company takes a customer order and processes it into an invoice and revenue (order fulfillment process). ERP systems makes the business process automated and more streamlined and makes the organization more agile and competitive so that it can respond to the changing customer needs and competition quickly and efficiently. Some of the characteristics of ERP systems are:
1. It affects almost all organizations 2. It forces the competition to change their business strategies and processes 3. It influences business partners to become more competitive and agile 4. It improves the profits of the organizations engaged in implementation consultancy 5. It helps the business process reengineering process 6. It enforces best practice business processes in organizations 7. It fully utilizes the true potential of client/server computing and other latest technologies 8. It changes the information systems function and job profiles of IT professionals 9. It changes the nature of jobs in all functional business areas of the organization 10. It is very expensive and its implementation is very costly and risky 11. Its implementation is a long and complex project 12. It requires the cooperation of all in the organization for succeed

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.
2006 Prentice Hall, Inc.

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Amity Business School

ERP facilitates value creation by changing the basic nature of organizations in a number of different ways:
1. 2. 3. 4. 5. 6. 7. 8. 9. It integrates the organizations activities It eliminates data redundancy It provides accurate, timely, relevant and up-to-date information to the decision makers It provides on-line and real-time information It enables better and faster decision-making It forces the use of best practices It enables organizational standardization It eliminates information asymmetries It allows simultaneous access to the same data for planning and control

10. It facilitates intra-organization communication 11. It enables inter-organization collaboration 12. It enables the organization to be more agile and competitive

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.
2006 Prentice Hall, Inc.

2 52

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