Before & after Implementing Enterprise Resource Planning - Essay Example

Before & After Implementing ERP (Microsoft Dynamics GP) In Our Company Introduction Enterprise Resource Planning (ERP) is a software package that enables the flow of accurate information within the organization for effective management. The system also facilitates sharing of information within and outside the organization with efficiency and effective planning. The software provides the organization with continuous information which supports the decision making process. The system is developed in such a manner that the data are recorded only once and is stored for long term use. The use of ERP and its relevance in a company can be witnessed through citing the example of International Petroleum Investment Company (IPIC). The company is located at Abu Dhabi employing 500 employees and utilizing the energy resources for the betterment of the people. The objective of the paper is to study the reasons behind the implementation of the ERP software and its impact before and after on the company to increase its efficiency (Zykov, n.d.). Before & After implementing ERP ERP software system is preferred by the company because it enables the reduction of costs. A well developed ERP solution results in improved operations and so increases profit margin of the company. Various functions of an organization that is planning, finance, human resources, and many more utilizes the software package for maintaining the essential records of the company. In this regard, it is essential to state that before the implementation of ERP, each department maintained its own software system and so the departments were unable to maintain its information records effectively. Moreover, the chances exists that the differences in the information may create disturbances in the decision making process. Therefore, the operations without proper planning were causing issues in the effective performances of the business. Moreover, the process of effective decision making was causing issues for the growth of the company. Also before the implementation of ERP every department maintained an isolated software system and so this resulted in lower productivity and the performance of the employees also reduces. This leads to the overall loss of the organization. All these problems hampered the communication flow of the organization and its effective planning process which implied less cleared objective among the personnel’s. This created problems for the finance department of the organization as the heads were unable to coordinate with the team members and it directly slowed down the purchase process. Therefore, implementing an ERP system was an effective decision taken by the management. It is worth mentioning that ERP implementation leads to better performance of the organization and it also assists in proper workflow and so results into standard work. It is essential for the company to decide whether to buy or to develop their own Enterprise Resource Planning software package. In case of buying the ERP system it can cost more to the company as they are to pay the amount for the licensing as well as it also includes the cost of installation and providing training to the personnel for operating the system. It can also be beneficial to the company in the sense that the software is already developed and needs to be implemented only and so it is time saving for the company. It also provides monetary benefits to the company as the maintenance cost and updating the software is done by the supplier. Therefore buying the software can be cost effective for the company (Umble Haft & Umble, 2003). On the other hand, the company can also develop the information system within the organization by utilizing the knowledge and skills of the personnel also with the help of ERP. A single software system is maintained for all the departments and so it integrates all the functions of the organization in a single software package without any haphazard. It also reduces the overall costs involved in maintaining the data manually and so reduces the workload of the employees. It becomes easier for the top management of the organization to look over the issues of the business at a time and all the problems can be tracked easily. ERP can be applied in all the departments of the organization; IPIC has implemented the software mainly in finance and procurement department to enhance the efficiency (Umble et al., 2003). Thus, with the implementation of ERP the flow of information and the management within the organisation have become more efficient. The use of this software in this department helps the company in maintaining the accounts in a defined and accurate manner. IPIC is a petroleum company and so requires high amount of efficiency in finance in order to maintain its resources so the company decided to apply the ERP system. Microsoft Dynamics GP is designed in a manner that it maintains all the laws and regulations of the country in which it is applied. Microsoft has incorporated the features that help the company to keep the records of the taxes required to be paid by the company and maintain the financial reports of various companies for the requirement of the country. This has helped the company to increase its efficiency and effectiveness to a greater extent. The software is so designed that it can be translated according to the language requirement of the country where it is adapted and hence it makes the task easier for the management to manage its resources. The system has proved to be very useful because the software allows the auditors to keep a record of who made the accounts entry and specifies the time and date when the software was last accessed. This also minimizes the chances of misrepresentation and fraudulent activities. The software does not require closing the accounts separately and it assist the IPIC in maintaining the accounts of several years online and so reduces the time involved in maintaining the records manually. Being an investment company it is vital for the organisation to maintain its records and accounting updated without any errors. In this context, the use of ERP software has helped the company in managing its resources effectively. The internal and external audit data available due to proper resourcing makes the work easier for the research department of the company. The implementation of this software package allows the company to engage in business activities of the particular country and makes the transaction process easier. The software also assists in improving the business process and so helps in attaining competitive advantage. It also improves the business of IPIC with the other countries as the software developed by Microsoft permits the translation of the language that avoids any miscommunication between the countries and so the transaction process becomes easier (Mishra, 2008). Conclusion The ERP software package developed by Microsoft helps the organization in fulfilling the increasing the challenges of other competitors. The implementation of Microsoft software package by IPIC is also responsible for the success of the company in the global market. All the financial information’s of the company is managed through online so it reduces the work of the employees of the finance department and so they can focus on the other activities of the departments, which are to be handled manually. Moreover, the software has also reduced the chances of communication barriers between the departments as all the data are recorded for long term use and can be accessed whenever required effectively. References Mishra, A. (2008). Achieving business benefits from ERP systems. Retrieved from http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fwww.researchgate.net%2Fprofile%2FAlok_Mishra5%2Fpublication%2F259486796_Achieving_Business_Benefits_from_ERP_Systems%2Flinks%2F0deec52c3122b5634e000000.pdf&ei=M73UVPWNIMKhugT_lIIg&usg=AFQjCNEqHMOiXlBZ5V-acMtTC-oOo-XN3Q&sig2=RJRY9iRkUDmNfNTxkcREKg Umble, E. J., Haft, R.R., & Umble, M. M. (2003). Enterprise resource planning: Implementation procedures and critical success factors. European Journal of Operational Research, 146, 241–257. Zykov, S.V. (n.d.). Enterprise Resource Planning Systems: the Integrated Approach. Retrieved from http://arxiv.org/ftp/cs/papers/0607/0607129.pdf. Read More