How ERP improves decision making in Business?

Decision making is an important function in business. The capacity of a business firm to make the right decision at the right time in the right place is extremely essential. ERP is a tool which facilitates this function of business. It helps to accumulate heaps of raw data in a composite manner and compiles it in a meaningful and suitable manner to make sure decisions can be made based on the data collected. 

         The ERP tool saves time. All the work of compilation which would otherwise require extensive personnel is avoided. This helps the company to make quick decisions which is important to gain advantage in this competitive business world. Awareness is another important aspect in business. An integrated end-to-end ERP system helps to get immediate notifications about any business activity of the firm. Any activity in any department of the company is instantly shared with the entire system. This helps the top management to detect any present or potential problems which are or might occur in the future. It also helps them identify shortcomings in any department which may lead to hindering the progress of the company. ERP is a good way to bridge the gap between office and field work. It is a universal storehouse for data.

 The following represent some of the basic function of how ERP can improve in the decision making process of business:

• Track and Report Business Financial Performance: ERP helps people understand the stage in which the business currently operates. It doesn’t have to wait for the books to close to judge whether the business is doing well or not. This function can help taking decisions beforehand.
• Efficient Planning: The plans and policies to be made and implemented can be done using the most up-to-date data. An end-to-end integration of ERP gives one the access to all the data from all the departments and summarizes their transactions.
• Explore Alternatives: Since ERP stores all the information regarding business, it allows managers to choose from a variety of choices and make the most appropriate decisions which would result in maximum efficiency and benefit the company.

However, ERP decisions vary from organisation to organisation. Every organisation has a separate set of needs. It is very much possible that the decision taken by one organisation may not suit other organisations. ERP may be a pervasive tool but proper analysis is necessary to make sure that the decisions made suit the organisation as a whole.

 

Contributor: Sidhanth