Answer
An Enterprise Resource Planning system is a fully integrated business management system covering functional areas of an enterprise like logistics, production, finance, accounting and human resources etc.
The benefits of using ERP are:
• It provides the control of invoicing and payments process to the account payable personnel.
• It reduces the paper documents by providing online formats for quickly entering and retrieving information.
• Improves timeliness of information by permitting posting daily instead of monthly
• Greater accuracy of information with detailed content, better presentation, satisfactory for the auditors.
• Improved cost control.
• Faster response and follow-up on customers.
• Better monitoring and quicker resolutions of queries.
• Enables quick response to change in business operations and market conditions.
• Helps to achieve competitive advantage by improving its business process.
The challenges of implementing ERP can be listed as:
• Not proper understanding of the complexity of planning, development and training that are needed to properly implement ERP package.
• Human reluctance to use new system.
• Cost of acquiring or developing the system.
• Cost factors associated with the system reengineering and data conversions.
• High dependency in the Information Technology by completely giving up the existing system.