Enterprise Resource Planning (ERP) is a strategic tool which helps an organization to gain and edge over its competitors in successfully integrating its key business operations, synchronizing, planning and optimizing the resources available in the current competitive environment. The integration of the business processes improves coordination between bodies, streamlines workflows and processes and benefits them in terms of retaining and satisfying customers by delivering their orders in the nick of time and keeping them well informed about their orders' current status rather than keeping them waiting for just a small piece of information. The use of ERP has a much broader scope in today's world rather than of just planning the use of the enterprise resources as it also enables an enterprise to be more time-sensitive. Another benefit is of better marketing opportunities because ERP penetrates one segment after the other and addresses solutions to many debacles existing in an enterprise.
ERP enhances the chances of right management decision making by creating future projections about sales during a certain period of a certain product. With that, the management becomes enabled to make decisions whether to increase or decrease production of that particular product which in turn helps in saving resources from being wasted and to be used for other valuable purposes. It also helps managers in making decisions about introducing some new value added features to an existing in-demand product for further enhancing sales and quality of services. Inventory costs reduction must be given a great importance in every organization and ERP helps in reducing inventory costs by better planning and forecasting of requirements. ERP system helps getting higher return on investments (ROI) in a fast manner as well. While there are absolute benefits, an ERP system also poses significant challenges in the areas of information security and business continuity planning. Off all the ERP systems exiting in the market, all seem to be performing the same function but the one best suiting your requirements needs to be picked up in order to achieve required results. The choice depends upon the structure and type of the organization e.g. financial, manufacturing etc. This is why some organizations experience higher benefits as compared to others because they've made the right choice and are able to make the right use of their system
ERP in Pakistan
Different ERP systems have been made to facilitate organizations in Enterprise Resource Planning. Leading ERP solution available are mySAP, Oracle’s JD Edwards, Oracle’s EBS and Microsoft Dynamics. These solutions link the order, inventory, sales, purchase, manufacturing, supply chain and warehouse management modules in an enterprise for better, fast and accurate information availability to every single person which is its 'primary objective' because every single operation and action taken at any place by any person depends on consistent and updated information availability. In Pakistan, Systems Limited, Siemens, Jaffer Brothers, A F Ferguson, Inbox and Abacus are the leading system integrators of respective ERP solutions.
ERP during Recession
With the loaming recession globally, unnecessary IT spending adding billions of dollars annually is no longer an option. This is of great significance for the organizations in the people centric or services sector, where change is frequent and inevitable. With companies contracting up their purse strings all across the globe, selling new enterprise solutions to company prospects is not an easy task. Generally, the IT services growth around the world has slowed down, forcing organizations to move back to basics with an increased focus on cost management and less on business transformation projects.
However, despite analyst predictions that recession will engulf the ERP market, various recent surveys have shown that ERP projects are and will continue to flourish as long as they can show not just return on investments, but the ability to cope with the demands of rapidly changing businesses, and the ability to make significant changes without high programming costs.
In order to have an expert opinion on the current market trends and future prospects of ERP in the recession period, I spoke to Mr. Usman Tariq Sultan, General Manager Sales and Marketing, Systems Limited.
- In today’s world, for a business how important ERP is?
In today’s competitive environment, developing new customers and retaining the current ones has become ever so important. For the purpose, excellent service levels and quality of products or services offered need to be maintained at all times. Businesses want to determine which product or service is providing them profit and which is mere an expense; which office/branch is the most profitable and which is underperforming; which machine is providing maximum efficiency and which needs to be disposed off; what should be the optimal production planning, distribution and quality management schedules; how to optimize the inventory levels; which product needs to be produced more and which less; which product’s price needs to be increased and which product’s needs to be decreased; how quickly they can launch a new product in the market etc. They want to minimize cost, increase productivity and reach global market place. The companies want prudent financial policies and human resources systems. All this can be achieved by implementing the “right” ERP system.
Enterprise Resource Planning (ERP), as we all know, refers to a software system that helps in the automation and integration of business processes of an entire organization. Business, whether big or small, benefit greatly from increased efficiencies resulting from successful ERP implementations. Scalable and robust ERP applications, which can adapt themselves to the changing requirements of the enterprise, are in high demand these days.
The greatest advantage of an ERP system is that they retrieve, organize and store valuable information and help you analyze and consolidate important information from financial, manufacturing, distribution, inventory, sales and HR departments. This information can help you streamline the existing operations by cutting unnecessary costs and spending more on functions which can help organization to optimize efficiencies and grow.
- What prospects do you see for ERP under this global recession period?
Infact, recession is the best time to implement an ERP. Various researches by Gartner, Foresters etc show that the period just beyond a recession is the most aggressive growth phase. Companies that get caught up in the ‘recession obsession’ miss the essential fact that business continues to go on, and those not prepared for the inevitable recession turnaround will lose significant ground compared to those that are prepared. Companies who strategize during the slow times to build their business and prepare for an economic turn-around will be better aligned for growth post-recession. The right ERP system can help companies not only survive the recession period, but come back faster and stronger than their competitors.
- What solutions Systems Limited is offering in ERP?
Systems Limited has partnered with Oracle to promote, sell, implement and support J D Edwards EnterpriseOne and J D Edwards World ERP systems in Pakistan. The said ERPs are globally acclaimed Tier 1 ERP systems which are known for their scalability and robustness and ideal for any manufacturing concern. Its Financial, Supply Chain, Manufacturing and Customer Relationship Management modules are the best in business.
Similarly, Systems Limited has partnered with Microsoft to provide Microsoft Dynamics Navision in Pakistan. Microsoft Dynamics Navision is a Tier 2 ERP system ideally suited for businesses who cannot afford Tier 1 ERP system.
Moreover, Systems Limited has developed and implemented industry specific ERP systems in Pakistan. Some of which are Spinning Unit Management System and Sugar Mill Cane Management. Systems Limited has also developed and implemented customized financial and supply chain systems for many organizations in Pakistan.
Systems Limited understands that Tier 1 and Tier 2 ERP solutions do not come cheap. However, in collaboration with Oracle and Microsoft, Systems Limited is offering all of the above-mentioned ERP systems at very affordable rates.
- In your opinion, what is the future of ERP, particularly in Pakistan?
I believe a very large market segment consisting of small and medium sized businesses in Pakistan have started realizing the potential of the ERP systems and how the “right” ERP can help them grow, optimize efficiencies and increase customer service levels. Therefore, there is a huge potential and a very bright future of ERP solutions in Pakistan. For the purpose, Systems Limited is investing heavily in training the resources to cater to the ERP demand of the said market segment.
ERP systems have great significance as they have become the biggest ingredient in ensuring a constant and consistent survival of organizations in today’s competitive market.
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