Why We Need ERP System

The solution companies has found is by implementing ERP system also called Enterprise Resource Planning system.

Imagine a company making widgets, we have the sales team, we have the manufacturing, we have accounting team and administrators to watch  over the whole process. Accounting handles a lot of data and they are the firstusers of information technology. For example in a widget producing factory accountants may choose the system like Excel, Quick Books etc. that fits their needs. Meanwhile the sales department also wants to use technology, so they are going to go ahead and find the system that’s best fits their needs. At operation center(factory) is going to find some scheduling system. Over a time we start to realize that there is a lot of duplication in organization. So we start transmitting data from one system to another system through interfaces. The idea that you have these pathways were dated to go from point A to point B to point C. These interfaces are well defined, so we say here is how data going to come out from  our sales system going to operation system and then into accounting system.This is called Batch Processing

There is a drawback of Batch processing, let’s say  a customer with a very long last name, maybe 20 characters, some system of organization can handle it but accounting system cannot. This system is brittle and costly, and it increases opportunity cost and many issues arise with maintain ace and flexibility. 

The solution companies has found is by implementing ERP system. Enterprise Resource Planning, the idea is that we have one single common database which serves different areas. So all the data which is in your sales, in accounting, in manufacturing, all is stored at central database. Your information stay safe in one place and it is easy to access any information by any department in a matter of seconds.