Enterprise Resource Planning refers to the management software used by companies that enables them to incorporate a unified/integrated software structure to handle and automate different business processes related to infrastructure, human resources and services. Apparently, the program integrates all aspects of processes, including banking, inventory planning, engineering, sales and supply chain, in a single database and user interface, using a single framework. ERP is perceived to be a form of a corporate program intended to be used by larger business organizations and mostly requires a dedicated team of staff to configure and review data or manage updates and improvements. However, there are also small business ERP programs, which are lightly weighted management software solutions in customized forms for a particular business industry.
Nevertheless, choosing the right ERP solutions is an essential step for a firm concerning its efficiency and profit maximization. The world’s leading independent ERP consulting firm, Panorama Consulting Solutions, releases annual reports of the best four ERP vendors in the market. These vendors include the SAP, which is the world leading enterprise on the application programs and software-related service revenue. According to Bradford (2015), SAP leads the major ERP suppliers with an overall market share of 19%. Another company is the Microsoft Dynamics 365, which offers ERP tools for business operations, providing digital intelligence and global scalability that allows firms to grow at their pace. The company appeals to small enterprises, the midsize and largest firm due to a suite of the products they develop.
Oracle is also another cloud that provides a complete, innovative ERP solutions for companies of all sizes. The company has an overall market share of 13%, which is slightly behind Microsoft Dynamics. Among the top ERP vendors, Infor is the last supplier, which specializes in the healthcare industry, hospitality, public sector, distribution, and service industry. The company has the same market share of 13% with the Oracle. Other providers are the Lawson software, Sage, Net ERP for NetSuite, among others (Bradford, 2015).
As stated by Bradford (2015), the cost of implementing the Enterprise Resource Planning software depends on the size and the type of the business, the country, the number of users, and the vendor. However, there can have some general estimations, such that smaller enterprises need to have $10,000 – $150,000, middle-sized firms require $150,000 – $1 million, and large organizations need $1 million – $10+ million. The breakdown of the budget allocation can be; 5%-10% for Database management system, 10% to 20% for Infrastructure, 15% to 30% for software, and 40% to 60% for human resource and training (Bradford, 2015).
The advantages of ERP software include; the system has many software components within it, which can be used to forecast data competently. Again, the ERP acts as a medium through which proper communication between business units is made (Bradford, 2015). The application also assists in making improved design engineering, which aids in the better shaping of the product. Another advantage of ERP is providing the tracking service and fulfilling the customers’ requirements (Duan et al. ,2013). The application helps to track the entire financial information of an organization from the invoice to the cash receipts. Finally, the software eliminates the risk of losing valuable data and reduces the production and delivery time at a higher level.
On the other hand, insufficient funds for providing the training and maintenance services is one of the major cons of implementing the ERP software. Again, there are the limited customizations options in ERP. The application is too expensive, and after implementation phase, the migration to the new system might cost the firm a lot of resources (Duan et al. ,2013). Finally, essential and sensitive organization’s data cannot be shared efficiently with the ERP software.
Based on the personal opinion, companies should invest in ERP system. The primary reason being, the advantages associated with the software outdo the disadvantages. Again, due to the advancement and revolution of technology, for the firm to remain competitive in the current business world, it should invest in technology. The ERP aim is to integrate all the business operations under a single roof, which improves the customers’ service, who are the determinant of the business continuity.
Bradford, M. (2015). Modern ERP: select, implement and use today’s advanced business systems. Lulu. com.
Duan, J., Faker, P., Fesak, A., & Stuart, T. (2013). Benefits and drawbacks of cloud-based versus traditional ERP systems. Proceedings of the 2012-13 course on Advanced Resource Planning.