Enterprise Resource Planning and its Impact on Business Management

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Enterprise Resource Planning (ERP) has transformed how businesses around the world operate, communicate, and produce. The purpose of this paper is to explore what ERP is and how it has impacted businesses. The software can be custom fit to meet the individual needs of every type of company. It integrates business functions into a unified business process with more speed and accuracy. Management structures and corporate cultures have also been impacted by ERP.
ERP is software that manages information for all departments within a company. Its objective is to get the right information to the right person at the right time. ERP software is typically modular but integrated. It consists of multiple modules that are connected to each other so there is a communication flow. Each module is focused on one area of business procedures. Companies may pick which modules they want integrated into their specific system. Some of the many options of areas of operations include: product planning, manufacturing processes, sales, marketing, finance, human resources and procurement (Davenport, 1998).
Since modules are connected, company management could run reports on any aspects of the business to get a complete view of activities, thus enabling them to make strategic decisions. It also helps them understand the status of their business. Business users are able to perform day-to-day operations such as data entry and operational reports. By using the software a company can align themselves to industry best practices. It shines light on what areas need adjusting in order to streamline their business process. It improves financial compliance with regulatory standards thereby, reducing risk (Hammer & Stanton, 1999).
Maintaining separate systems to manage date can be redundant and costly. ERP software is considered vital tool for organizational excellence because it integrates and streamlines data flow, enables direct access to real-time operating statistics, and enables precise transactions (Shaul & Tauber, 2013). Fragmented organizations can have more confusion and conflict. Studies show that ERP system adoptions allow managers more flexibility to manage earnings and their earnings release dates. ERP systems have also been shown to potentially increase the likelihood of financial statement management (Brazel & Dang, 2008).
ERP has significantly impacted supply chains by addressing the issues in manufacturing and distribution. It plays a vital role in centralizing transaction data.

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