Enterprise Resource Planning

Enterprise resource planning is one of the most used computer and database management approaches in big corporations. This approach is very helpful in improving the overall performance of companies. Before implementing the process, it is important to know the benefits as well as the risks associated with it. To learn what is enterprise resource planning, let us have a closer glance at the advantages and disadvantages of applying this data management approach.

Overview

What is enterprise resource planning? Enterprise resource planning refers to a systematic process of integrating all the functions and departments of a company in an efficient computer network. The approach is cost efficient because the firm does not need to use various computer software to monitor and manage the functions and operations of the departments.

A typical enterprise resource planning system features software modules for supply chain management, customer relationship management, data warehouse, customization and access control. In addition to these, the system includes modules for human resources, financials, project management as well as manufacturing. Most international corporations use enterprise resource planning software because it is very reliable and efficient in managing the activities of firms concerning inventory, logistics, shipping, accounting and invoicing.

Advantages

Most international companies benefit from the use of an enterprise resource planning system. With the implementation of this approach, employees became more productive since they can easily get the data that they need by accessing the system. For instance, if a human resource department staff is doing a report about the payroll, the employee does not need to go to the finance department to get the data needed for the report. By accessing the system, the employee can find and download information that will be used in the report. When it comes to the security of data, companies have nothing to worry because most enterprise resource planning systems have security features, which are very important to prevent problems concerning embezzlement and industrial espionage.

Disadvantages

Like other computer systems, enterprise resource planning software has limitations. One of the disadvantages of using the software is it is costly. Additionally, the system affects the boundaries of power in corporations, which can cause troubles regarding lines of responsibility, accountability as well as employee morale. Another disadvantage of using the software is that it is very complex. In this regard, companies should form a reliable IT management team that will be in-charged with the effective and successful employment of the system. To avoid security breach, the team should regularly change the passwords to secure confidential data.