Business Benefits of ERPs

ERPs improve the efficiency and effectiveness of business operations by


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• Integrated information that is consistent across the enterprise and

provides a “single truth” in areas such as

◦ Financial information—There is one set of financial figures that

everyone can use.

◦ HR information—Employees can enter updates directly into the

system, and their skills and experience can be viewed by

managers across the organization.

◦ Order information—Orders affect inventory, accounting,

distribution, and manufacturing, all of which can be updated in

the single system when an order is placed.

◦ Customer information—The same customer information is

available to all departments.

• Best practices—The systems are designed to implement best

business practices for each of the functional areas and streamline the

steps in the process, reducing the time required to complete each


• Standardized business processes—All users of the system perform

the function in the same way, and every process is supported by the

system with a similar look and feel for all users, regardless of their


• Lower IT costs—The use of a single system for multiple functions

reduces total costs associated with acquiring, operating, and

maintaining multiple systems; however, if the ERP is significantly

modified to fit the organization, the cost advantage may disappear.

• Reduced training costs—Employees use a similar interface for all

major business functions.

• Consolidated procurements—The use of a single system for

purchasing products provides opportunities to consolidate similar

orders from various departments to receive volume discounts.

• Improved compliance—Time and effort are reduced in responding to

the wide variety of government reporting requirements, including

financial reporting, human resources and wage reporting,

environmental reporting, etc. Compliance is also enforced through

the standardized business processes implemented in the ERP.


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