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Process integration - ERP systems integrate various functions of your business.
For example, purchase-to-pay or order-to cash cycle involving several activities
and departments/individuals can be tightly integrated and harmonized. The need to
wait
for information or discontinuities between departments can be eliminated.
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Process standardization - ERP helps you achieve process standardization.
Everyone
in your organization using the system will follow the same process. It helps you
reduce variability and achieve higher quality levels. Training and induction of
new employees becomes easier.
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Process institutionalization – If your company opens new sites or acquires
other companies, the new entities can adopt your standard process easily as the
processes are codified by the ERP system. No need to reinvent the wheel.
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Process automation – ERP helps in the automation of repetitive activities
resulting
in greater speed and accuracy. For example, using min-max the system place orders
for C class items automatically. Your purchasing department can just focus on higher
value items. By automating processes, the system helps you reduce your operating
cost.
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Process optimization - ERP systems hold a lot of valuable data. The data
can be used to optimize your operations. For example, inventory levels can be optimized
based on actual usage, cost and lead time captured by purchasing, costing and manufacturing
transactions. Lead time for purchasing can be reduced based on vendor performance
data. Based on customer demand pattern, you can perfect your forecasting methodology.
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Process differentiation – A firm that has the best process differentiates
itself from the competition. Many ERP systems can be modified to incorporate proprietary
business logic. For example, if your pricing strategy is key to winning business,
you can build a custom quotation module which will help you succeed consistently.
By codifying your expertise with the base transaction system you can create a powerful
combination which will provide competitive advantages.