Information Technology Reference
In-Depth Information
NetERP software from NetSuite
provides tightly integrated,
comprehensive ERP solutions for
businesses, giving them access to
real-time business intelligence and
thus enabling better decision
making.
(Source: Courtesy of NetSuite Inc.)
Advantages of ERP
Increased global competition, new needs of executives for control over the total cost and
product flow through their enterprises, and ever-more-numerous customer interactions drive
the demand for enterprise-wide access to real-time information. ERP offers integrated soft-
ware from a single vendor to help meet those needs. The primary benefits of implementing
ERP include improved access to data for operational decision making, elimination of inef-
ficient or outdated systems, improvement of work processes, and technology standardization.
ERP vendors have also developed specialized systems that provide effective solutions for
specific industries and market segments.
Improved Access to Data for Operational Decision Making
ERP systems operate via an integrated database, using one set of data to support all business
functions. The systems can support decisions on optimal sourcing or cost accounting, for
instance, for the entire enterprise or business units from the start, rather than gathering data
from multiple business functions and then trying to coordinate that information manually
or reconciling data with another application. The result is an organization that looks seamless,
not only to the outside world but also to the decision makers who are deploying resources
within the organization. The data is integrated to facilitate operational decision making and
allows companies to provide greater customer service and support, strengthen customer and
supplier relationships, and generate new business opportunities.
For example, success in the retail industry is determined by a retailer's ability to have the
right products on store shelves and priced correctly when customers come to shop. As a result,
retailers need accurate, current, point-of-sale data and inventory data to match the mer-
chandise assortment in their stores to the needs of their local markets. Tumi is a manufacturer
and retailer of luggage, business cases, handbags, wallets, writing instruments, and watches.
Its products are available at top department and specialty stores as well as over 50 Tumi stores
around the world. The firm replaced its legacy systems with an integrated ERP system and
achieved the following benefits from improved operational decision making: reduced days
of sales outstanding in accounts receivable by 44 percent, increased sales by 100 percent with
no increase in the number of employees, cut inventory levels by 30 percent leading to a
reduction of warehouse space requirements of 38 percent, and sliced its month-end close
process by five days.
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Elimination of Costly, Inflexible Legacy Systems
Adoption of an ERP system enables an organization to eliminate dozens or even hundreds
of separate systems and replace them with a single, integrated set of applications for the entire
