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Some
common questions about ERP include the following:
A
business process crosses multiple functions in an
enterprise. For example, you may have a department
called "accounting," or you may have a function called
"payroll." Although each function involves business
processes, these functions themselves are not process
based.
A
business process is broader—for example, "order to cash"
means everything in the path from the customer order
until you have the money in the bank. It is a more
efficient way to think about linkages and how they work
in your organization.
The
beauty of an ERP application is that it is a suite that
all works together—without this capability, you can't
have seamless business processes.
Modularity comes to play mainly in how you purchase and
implement your ERP system. You may not need all
applications at once, or you may want to deploy one
application at a time. They are different from separate
applications in that when more than one is implemented,
they fit together like Legos and work automatically.
Stand-alone applications—sometimes referred to as
"silos"—can't easily talk to one another. A series of
silos does not make a barn.
Research shows that small and middle-market companies
spend a great deal of time doing the same task over and
over—entering the same data in different programs. There
are some identifiable problems with this:
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It is a waste of time to reenter data over again. |
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It is very likely to be entered incorrectly. |
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It may look different in different programs (Why do
I have two companies in my vendor list—one is
International Business Machines and one is IBM? Why
do I have two versions of the same customer—Robert
Smith and Bob Smith—with the same address?) |
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Data that results from very different disconnected
applications is inconsistent, so attempts to analyze
it yields the proverbial "apples and oranges"—a
decision-support fruit salad. |
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With an integrated ERP suite, there is a "single
version of the truth" that only needs to be entered
once to be propagated to all parts of the business
that need it. All business processes, all employees
who touch the application, and all the executives
who make decisions for the company see the same
version of reality, in real time, all the time. |
Your
business is more than internal operations: to be
successful, you need to efficiently manage your own
purchases of goods, services, and raw materials; foster
and control your relationships with your suppliers and
your business partners; and create, manage, and retain
your customer base. All these relationships are more
efficiently and economically managed with business-wide
applications. Look at that "order-to-cash" example;
there are many steps that involve the customer, external
delivery services, and the bank—all external to your
organization.
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Scalability—ERP
solutions are designed to grow with your company.
Unlike some stand-alone applications, they do not
"top out" without transition paths to other
solutions, leaving you to start over from scratch
with a new and different application. |
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Vendor management—Face
it, managing a plethora of vendors with multiple 800
numbers for customer service is not easy. An
integrated suite gives you one solution supplier to
work with. |
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Functionality—Access
to the functionality required to run the business
over time—at an affordable price point. It may not
be the cheapest choice at first—but it will usually
be the most economical in the long run as your
business needs grow and change. |
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Reliable service and support—The
ability to access affordable service and support is
critical. It is easier to support an integrated ERP
environment than a hodgepodge of different
applications. |
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