Planning is the latest high-end solution, information
technology has lent to business application. The ERP
solutions seek to streamline and integrate operation
processes and information flows in the company to synergies
the resources of an organization namely men, material,
money and machine through information. Initially implementation
of an ERP package was possible only for very large Multi
National Companies and Infrastructure Companies due
to high cost involved. Today many companies in India
have gone in for implementation of ERP and it is expected
in the near future that 60% of the companies will be
implementing one or the other ERP packages since this
will become a must for gaining competitive advantage.
In the present business environment, role of a Chartered
Accountant is considered to be very important and inevitable.
Chartered Accountants as managers, consultants, advisors
or auditors play an important role in controlling, managing,
and supporting the business.
As the business needs are very complex in nature, the
implementation of an ERP package needs Chartered Accountants
with functional skills for evaluation, Business Process
Reengineering (BPR), Mapping of Business requirements,
Report designing, ensuring Business controls, customization
of the package for the specific requirements, Documentation
Sooner or later a Chartered Accountant without the
knowledge of ERP may feel as if he is a fish out of
the bowl. By this article it is attempted to highlight
various aspects of ERP and specific areas of ERP that
are relevant for Chartered Accountants.
EVALUATION OF ERP
In the ever-growing business environment the following
demands are placed on the industry:
|| Aggressive Cost
|| Need to analyze costs / revenues
on a product or customer basis
||Flexibility to respond to changing
|| More informed management decision
|| Changes in ways of doing business
Difficulties in getting accurate data, timely information
and improper interface of the complex natured business
functions have been identified as the hurdles in the
growth of any business. Time and again depending upon
the velocity of the growing business needs, one or the
other applications and planning systems have been introduced
into the business world for crossing these hurdles and
for achieving the required growth. They are :
Information Systems (MIS)
|| Integrated Information
|| Executive Information
|| Corporate Information
|| Enterprise Wide
|| Material Resource
|| Manufacturing Resource
Planning (MRP II)
|| Money Resource
Planning (MRP III)
The latest planning tool added to the above list is
Enterprise Resource Planning.
All processes are categorized into Grades according
to the nature of operation.
NEED FOR ERP
Most organizations across the world have realized that
in a rapidly changing environment, it is impossible
to create and maintain a custom designed software package,
which will cater to all their requirements, and also
be completely up-to-date. Realizing the requirement
of user organizations some of the leading software companies
have designed Enterprise Resource Planning software
which will offer an integrated software solution to
all the functions of an organization.
FEATURES OF ERP
Some of the major features of ERP and what ERP can do
for the business system are as below:
facilitates company-wide Integrated Information
System covering all functional areas like Manufacturing,
Selling and distribution, Payables, Receivables,
Inventory, Accounts, Human resources, Purchases
|| ERP performs core
corporate activities and increases customer service
and thereby augmenting the Corporate Image.
|| ERP bridges the
information gap across the organization.
|| ERP provides for
complete integration of Systems not only across
the departments in a company but also across the
companies under the same management.
|| ERP is the only
solution for better Project Management.
|| ERP allows automatic
introduction of latest technologies like Electronic
Fund Transfer (EFT), Electronic Data Interchange
(EDI), Internet, Intranet, Video conferencing, E-Commerce
|| ERP eliminates
the most of the business problems like Material
shortages, Productivity enhancements, Customer service,
Cash Management, Inventory problems, Quality problems,
Prompt delivery etc.
|| ERP not only addresses
the current requirements of the company but also
provides the opportunity of continually improving
and refining business processes.
ERP provides business intelligence tools like Decision
Support Systems (DSS), Executive Information System
(EIS), Reporting, Data Mining and Early Warning Systems
(Robots) for enabling people to make better decisions
and thus improve their business processes.