The Importance of the Enterprise Resource Planning for the Firm

Enterprise Resource Planning

Enterprise Resource Planning (ERP), is usually used in ERP systems or software which are involved in managing all the information and all functions of a firm from shared data banks or even data stores (ERPwire, 2010). ERP has been given significant acknowledgment since the processes of ERP are very important in the lifetime of a firm. ERP is given much focus because of the huge investment it is given in monetary terms, human capital as well as time. Its importance is also manifested in the kind of expectation it has from the shareholders, managers, and employees. ERP is a very sensitive practice; therefore, it needs a lot of careful planning and conscious actions. Any small disturbances in the ERP system will affect the entire business operations. Consequently, it is incredibly essential to pursue the best practices of ERP. Some of these best practices are:

Good Start

Before establishing ERP, it is appropriate for a business to do several types of research and have a strong foundation. If this stage is not done well, the business may have future regrets about its defects. This stage itself is very vital as it helps a company to appraise itself if it has done everything in a systematic order. Also at this stage, many vital business decisions are made and it’s only then that it’s proper to follow the best practices. A good start also enables a firm to identify several factors that are linked to the ERP. Consultations and meetings are usually faulted for not doing their rationale. This stage requires a lot of evaluations and analysis, so it is very significant to find out that the critics are correct in faulting these meetings. However, these meetings must come up with real and pertinent details regarding how the ERP can be handled with all efforts. This is a crucial step in the ERP project (ERPwire, 2010)

Change in Business Process

Change in business process is another important best practice method. Most of the time businesses are usually hesitant in changing their business structure to suit the ERP systems. This is very dangerous to the business in terms of completion as well as the implementation of ERP. ERP is very essential to the business process and in streamlining the business to face the existing competition. ERP systems are based on the most recent trend in the industries and will help businesses to compete for both domestic and international. Therefore, ERP practice requires to be at meet the market standards and this should be the main goal of the ERP project. The transformation of an organization is a solitary process with diverse benefits. These businesses are the ERP and business opportunities. However, most businesses cause a lot of damage and disruption in the processes of implementing the ERP systems, which, in turn, damages the key goal of establishing the ERP. This practice is unethical and unprofessional despite the little success a few companies have experienced. Whatever the firm chooses, the final result should be the attainment of the most excellent ERP practices (ERPwire, 2010).

Allocating the necessary Resource

Finally, allocating the necessary resources is also an important best practice that should be considered. Businesses are obliged to supply the required momentum to achieve subsequent results and successful implementation. This enables most businesses to get the maximum standards in the process of ERP implementation. Firms need to ensure that each one of them is contributed to ensure that there does not impede the implementation of the ERP process (ERPwire, 2010)

ERP and Productivity

The implementation of ERP improves the productivity of a business’s workforce. ERP allows employees to focus on their core duties and the firm’s strategy as it takes care of other duties including project management, supply chain management, financial management, and access control among other duties. An increase in productivity improves the system performance and processes as well as reduced costs. It is also reliable, fault-tolerant, and also reduces time wastage (ERPwire, 2010) ERP also automates the business routine which frequently repeats duties that often waste time and energy and leads to errors in work. The impact of the use of ERP has been experienced in the businesses environment with the more efficient completion of daily activities within a shorter time. It has also helped firms maximize the utilization of their resources and reduce the wastage of resources, inventory shortages, and pilferage in delivery as well as improving customer service, productivity, quality control, and the delivery of services. Therefore, the ERP has helped in improving the overall productivity (Eastern Software Systems, 2010).

ERP also enables businesses to comprehend the more effective workflows and the ones that are not, hence enabling them to adopt the ones with the best practices which will improve the productivity of their workforce. There are various types of ERP systems that suit different kinds of organizations, whether multinationals or small and medium-sized enterprises. Then system handles various facilities from customer complaints, human resources, finance and accounting, supply management, sales, and marketing as well as tax. ERP may be costly in the short term since it requires a high level of security; however, in the long run, it enhances an increase in productivity as well as increased profits. ERP also helps in reducing operational costs. It helps in reformatting and reducing the cost of operating the business. This is achieved by better synchronization of various departments in an organization (Eastern Software Systems, 2010).

Human Resources best practices

ERP system can be used by the human resource managers to sort out various qualifications and courses to the resumes’ database. It is also useful in maintaining suitable organization, values, requirements, exams, interviews, and important information of employees. All the major features concerning the behavior of employees are also envisaged. It is also an effective way to oversee the applications, warnings, and suspensions. The foremost best human resource practices are discussed below.

First, there is enterprise planning, this acts as a standpoint for generating job definitions about quality and specific requirements such as education and language. Another best practice is where a company has special features to devise the selection criteria and plan the interview stages according to the project policy. Moreover, it also allows for scheduling and employment advertisements as well as reporting on personnel development. ERP makes increases the efficiency of daily routine as it allows for easier planning of interviews and the sending of interview notifications via mass emails. The third best practice is managing the employment records. ERP allows the HR department to edit employment records as deemed necessary using a single panel for all staff members.

Running a payroll system is one of the most complex assignments to complete to sustain the excellent performance of a business. However, this process can be made easier by the use of ERP as it speeds up the process. ERP makes it simple to follow up the monthly information on a daily or monthly according to the needs of the employees. Training costs are minimized and monitored as employees’ application details are easily saved. The concluding best practice is the production of periodical reports. This is a fascinating characteristic for defining client reports and creating summaries of reports on payroll (ERP Human Resources, 2010).

Turnover of Information Technology

Retaining IT professionals is very significant for firms and institutions due to the challenges firms experience in finding IT talents. Drastic innovations in the IT sector, the expansion of the information economy, and the rise of e-commerce have posed serious challenges for firms that seek to hire and retain skilled IT professionals. Maintaining the technology infrastructure moving forward is a big challenge to IT professionals and IT managers because it’s not easy to get skilled and talented professionals who can keep up with the technological pace. The shortage of IT professionals in the market leads to the shortage of IT services as well as high turnover rates for IT professionals. Firms are therefore encouraged to develop efficient recruitment and retention mechanisms following the structure of the labor market. Turnover rates are also influenced by individual factors like job dissatisfaction, employee demography, or even lack of organizational commitment (Slaughter& Sandra, 2010).


Eastern Software Systems (2010). ERP and Productivity, Web.

ERP HR Module (2010). For the Open Source ERP, Web.

ERP Human Resources (2010). The Key for Success, Web.

ERPwire (2010). How to set ERP Standards,, Web.

Slaughter& Sandra (2010). Turnover of Information Technology Professionals: The Effects of Internal Labor Market Strategies, Database for Advances in Information Systems, Web.

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