Business organizations are competing in the modern market for gaining the maximum share in the market. The increase in the competition have led to the use of various software packages and systems for maximizing the production rate of the company in the market. Therefore, the use of the Enterprise Resource Planning Systems have been increased by the companies in the market.
This report focuses on the fundamentals of the ERP systems in the market. There are various factors discussed in the report that helps in maintaining the business operations using the ERP systems.
This report outlines the use of the ERP systems in the business organization. There are various factors discussed in the report that contribute in the realization of the business organization in the market.
Enterprise Resource Planning helps in facilitating the information flown the business organization. It also controls all the activities and resources of the business organization in the market (Schmaal et al. 2016). It handles different operations in the business organization including the production, shipping, business logistics, invoicing and accounting. There are wide variety of the operations of the business organisation including the marketing, billing, advertising and inventory management. ERP helps in managing different stakeholders outside the company. It helps in maintaining a centralized database system for the business organization that helps in maintaining the data and info ration of the employees, staffs and customers (Katerattanakul, Lee and Hong 2016). The proper capital investment and labor manages the resource planning of the company in the market.
A proper maintenance of the resources help in the progress of the company in the market. Therefore, the ERP system helps in the development of the company in the market. The SMB industry have shown a continuous growth in the market by the use of the ERP system in the operations of their business model (Ahmad and Cuenca 2013). The decisions in the company are made with the help of the ERP system that provides the knowledge of each n every part of the company in the market. Therefore, the ERP acts as a backbone for the business organization and maintains all the operations in the business organization.
Figure 1: ERP concept
(Source: Ahmad and Cuenca 2013)
ERP has helped in connecting the business organization with the cloud computing services. Therefore, there are various facilities that the ERP software packages provide to the business organization. Different companies have started using the ERP systems for managing the business operations in the market (Ram, Wu and Tagg 2014). For example, Cisco Systems have harnessed the ERP system in their business to become a leader in the global networking industry. The ERP systems of the Cisco has proved to be the backbone for the business in the market and helped in growing in the market (Nour and Mouakket 2013). The Global business network has been created by the Cisco Systems with the help of the ERP systems. In this process, the Cisco Systems has doubled its business in the market of the networked architecture. The cost benefit ratio of the Cisco systems have been in control that helps in maintaining the cost revenue of the company in the market (Almajali, Masa’deh and Tarhini 2016).
The competition in the enterprise software business has been continuously increasing in the market that is causing a better development of the Internet technology in the market. The use of the ERP systems have helped in the development of the company in the market. Many companies have tried end-to-end solutions for the enterprise in the market. The delivery time of the products produced by the company, have to maintain under the ERP systems that helps in enhancing the efficiency of the company in the market. For example, Siebel Systems produces software packages with the help of the customer support (Galy, and Sauceda 2014). The customer relationship of the company has been maintained by the ERP systems of the company. This help in enhancing the services provided by the company in the market. The supply chain management helps in channelizing the supply chain of the company in the market. It also helps in maintaining the supply logistics of the company in the market. On the other hand, Hunton, McEwen and Wier (2015) argued that small companies are not able to involve in the ERP systems, as it is costly to implement and require a lots of resource.
Growth of the Enterprise Industry
The enterprise industry has been continuously increasing in the market that is helping in maintaining the revenue of the company in the market. The adoption of the enterprise software in the business operation helps in maintaining the proper business solutions to the challenges that re prevailing in the market (Jinno, Abe and Iizuka 2017). The use of the ERP system have been increased in the business organization with the increasing the advancement in the information technology in the market. The outsourcing of the products of the companies are done with the help of the ERP systems in the market. The outsourcing of the products helps in enhancing the sales of the companies in the market (Almajali, Masa’deh and Tarhini 2016). The competition in the market has been increased due to use of marketing strategies in the business organization.
The increase in revenue of an enterprise depends in the accounting software used by the company. For example, Oracle is the second largest software company in the world. The ERP system of the Oracle has helped in increasing the revenues of the company from $2.5 billion to $9.3 billion in five years of span (Nguyen et al. 2016). Oracle has been a leader in reinforcing the ERP solutions around the internet. The internet based business-to-business software helps in maintaining the business operations in the market. The online marketing of the products and services have maximized the use of the ERP systems in the company. There are various elements in the ERP systems have helped in performing the online marketing in the business scenario.
The implementation of the ERP packages is a major effort made by the companies. A Gemini Consulting survey of 220 companies have found that most of the company have SAP R/3 implementation effort consumed 141 person per month costing $7.5 million (Hong et al. 2016). The use of the SAP in the ERP has enhanced the database storage of the data and information.
The integration of the ERP system in the business scenario has enhanced the business scenario in many ways including the business strategies. Various factors are driving the ERP systems in the business adoption. These factors are discussed below:
Reduce Cost
The ERP systems have able to provide various functions to the business as discussed earlier. These functions have provided essential strategies to the business firms for maintaining the operations in the business scenario (Ganesh and Mehta 2016). The ERP systems helps in minimizing the cost of the various software used for different purpose. The ERP system can alone perform all those functions of different software. Therefore, it helps in minimizing the cost of the software in the market. It helps in minimizing the cost with maximizing the production of the firm.
Manage growth
The ERP systems helps in creating new opportunities for the business organization in the market the use of the ERP system in the market have helped in making the mission and vision statements for the business organization (Jinno, Abe and Iizuka 2017). The goals and objectives of the companies have been maintained by the ERP system.
Innovation
The ERP system of the business organization helps in creating new ideas and thoughts for the future aspects of the company in the market. The ERP systems helps in channelizing the innovative ideas if the employees and other staffs in a business organization in the market (Leu and Lee 2017). The ERP system have enriched different strategies in the business organization that have helped in maintaining the business operation in the business organization.
|
Process |
Description |
|
Forecasting |
Shows sales, Fund Flows etc over a long period of time say next two years |
|
Fund management |
The necessity of funds and the way to raise these funds |
|
Price Planning |
Uncertainty and Risk factors to be considered. Simulation with “What if” type analysis Determines the price at which products are offered. Involves application of technology to pricing support such as commercial database services. Also feedback and sensitivity analysis |
|
Budget Allocation |
Using computerised algorithms to estimate desirable mix of funds allocated to various functions. |
|
Material requirement |
Process of making new products from raw materials and include production scheduling, requirement planning. |
|
planning |
Also activities for monitoring and planning of actual production. |
|
Quality control |
Takes care of activities to ensure that the products are of desired quality. |
Table 1: Process and description in ERP
There is an increase in the competitive advantage in the market. Therefore, the small business have to compete with the large companies in the market. The use of the ERP systems in the company’s have helped in gaining the competitive advantage in the market fir the small businesses. A well-constructed ERP system helps in minimizing the cost and maximizing production of the company in the market. An effective ERP optimizes the business scenario in the market related to the financial standards of the company.
The proper capital investment and labor manages the resource planning of the company in the market. A proper maintenance of the resources help in the progress of the company in the market (Fischer et al. 2017). Therefore, the ERP system helps in the development if the company in the market. The SMB industry have shown a continuous growth in the market by the use of the ERP system in the operations of their business model. It has also helped in competition in the market with other companies. On the other hand, Garg et al. (2017) argued that the SMBs have unable to implement the ERP system properly that has caused in the degradation of the growth of the company in the market. Many small businesses have closed down due to the financial loss in the market.
The implementation of the ERP system controls the inventory module of the business that helps in discovering new technology that will be beneficial for the growth of the company in the market. The ERP module helps in maintaining the production of the small business in the market. This improves the planning prices of the company in the market and analyzed the demands n the market by initializing with the expectation of the customers (Li et al. 2017). The development in the robust software helps in maintaining the manufacturing capacity of the business in the market. Therefore, the production of the company in the market has been properly maintained by the ERP systems. This help in enhancing the services provided by the company in the market. The ERP purchasing module has helped in identifying the potential suppliers, awarding the purchase order of the supplier and negotiating the price of the products in the market. Therefore, this helps in maintaining the production of the products according to the demands of the customers (Jagoda et al. 2017). The ERP Hr module streamlines the human resource department of the company that helps in managing the human resources in the company. The proper allocation of jobs to the employees of the company helps in maintaining the success rate of the company.
|
Countries |
Employee Size |
Revenue |
|
Australia |
<200 |
$20 million |
|
Canada |
<500 |
$25 million |
|
China |
<2000 |
CN$300 million |
|
European Commission |
<250 |
$50 million |
|
Germany |
Follows EC |
Follows EC |
|
India |
<1000 |
Rs.25 lakh- 10 crore |
|
Japan |
<100 or <300 |
$50 million |
|
Singapore |
<200 |
$100 million |
|
USA |
NA |
NA |
Table 2: Definition of an SME by employee size and revenue.
In context to the larger organization, SMEs relies on other firms for the training and marketing purpose. Around 2,132,412 actively trading businesses as of June 2011 are there in Australia with an increase of about 8000 actively trading businesses from the previous year (Ali and Miller 2017). Almost 96% were small businesses (2,045,335), 3.8% were medium businesses and less than one percent was large businesses (Ghosh and Biswas, 2017). 10 years back, Australia had approximately only 10,000 SMEs representing about $5 billion of the Australian market (Carvalho and Guerrini 2017).
|
|
Number of Businesses Operating in June 2007 |
Number of Businesses that Continued to Operate to June 2011 |
“Survival” Rate (%) |
|
Small (0-19) |
1,985,822 |
1,185,997 |
59.7 |
|
Medium (20-199) |
82,071 |
62,243 |
75.8 |
|
Large (200+) |
5900 |
4386 |
74.3 |
|
Total |
2,073,793 |
1,252,626 |
60.4 |
Table 3: Business “survival” rates by employment size between June 2007 and June 2011
The implementation of the ERP methodologies have evolved in the small business enterprises that have helped in maintaining the sales of the products and services in the market. The implementation, presentation, planning and the factors and steps that are included in the ERP methodologies. This ready-to-go software implementation includes detailed, step-by-step implementation procedures, extensive, reusable documentation for scope evaluation and end-user training (Peng et al. 2017). The delivery time of the products produced by the company, have to maintain under the ERP systems that helps in enhancing the efficiency of the company in the market (Zerbino et al. 2017). The customer relationship of the company has been maintained by the ERP systems of the company. The supply chain management helps in channelizing the supply chain of the company in the market. It also helps in maintaining the supply logistics of the company in the market.
The strategies implemented by the ERP modules helps in meeting the resource, time and cost of the small business enterprise. The slow implementation of the ERP adoption in the SMEs is done due to different context of the operational nature in the business organization. The life cycle of the ERP module have faced different challenges in the market. These challenges have mitigate the reasons for the implementation of the ERP systems in the business organization. The different challenges in the ERP implementation are mentioned below:
Lack of Organizational Leadership
The leadership management in the business organization helps in maintaining the employees and other staffs in the company. Therefore, the lack in the leadership in the company decreases the performance of the employees and other staffs (Lee et al. 2017). The commitment of the employees in the company is diluted.
Availability of skilled resources
Small business enterprises do not have skilled and technical resources in their account that causes less productivity in the company. There is a lack of experience in the staffs of small business enterprises (Jinno, Abe and Iizuka 2017). Therefore, the demand and tendency of the resources in the company increases that leads to a challenge in the company.
Figure 2: Challenges faced in implementing and maintaining ERP
(Source: Jinno, Abe and Iizuka 2017)
Inefficient Communication
Communication plays an important role in maintaining a transparent environment in the company. The management level of the company is able to communicate with the ERP vendor that helps in maintaining the communication with all the others levels of the company in the market. This helps inn understanding the condition of the organizational structure of the company. The failure in the communication causes failure in the implementation of the ERP system in the organisation.
|
Targeted Success Factors |
Actual Outcomes |
|
Software alignment with the SME’s business processes |
Through internal and external integration, the ERP solution provides various online functionalities and reporting tools customized to provision for the SME’s business processes |
|
Improved data access to franchises |
Franchises have access to a robust, integrated business management tool for managing their complete business cycle, including sales, customer relationship management and finances |
|
Increase in new customers |
New customers doubled per month within the first three months without any changes to their sales strategy |
|
Reduced conversion time for prospective customers in placing customer orders |
Conversion time reduced from two months to one week |
|
Increase in yearly revenues |
Revenues doubled at the end of three months |
|
Savings in recurring costs |
Recurring costs reduced by one-fifth because prospect information and tools were available on smartphone or tablet devices |
|
Savings in maintenance costs |
Maintenance and repairs were reduced due to the smart predictive reporting features of the ERP system |
Table 4: ERP implementation outcomes of the SME.
The optimization of capability in all regions of business helps in maintaining a consistent service in delivery of cloud services in business organisation (Ghosh and Biswas, 2017). The quick delivery of the parcel with the help of cloud services helps in maintaining the real time analysis of the real time and device linking of the departments. The decision making of the departments have helped in enhancing the quality of the services provided by the company in the market. The customer relationship management (CRM) of the company have to be enhanced with the help of the ERP system in the company (Jinno, Abe and Iizuka 2017). The ERP systems have helped in engaging the employees and customers of the company in the market.
Conclusion
It can be concluded that the enterprise resource planning is an important part in the development of the organization. The ERP systems have helped in maintaining the simplicity of the business strategies in the market. The use of the ERP systems have helped in minimizing the risks involved in the business strategies in the company. Therefore, the use of ERP in the small business enterprise have helped in minimizing the cost and maximizing the production of the company. An integrated ERP helps in optimizing the efficiency of the production of the business in the market. The use of the different ERP modules has been discussed in the report that helps in understanding the different arena of the ERP systems in the business organisation. The case studies of different companies helps in understanding the practical use of the ERP systems in the business organisation. The systematic enquiry of the aspects of the ERP has provided guidelines for the use of the ERP in the business.
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