An organization uses several
resources to deliver its end product/service. Primarily all these resources can
be categorized into following four category (Fig 4.1: Resources) - Employees,
equipment, material and place from which business is carried out.
These resources will differ
depending on business of the organization, for example if it’s a manufacturing
company then the resources will be employees, machinery, plant, raw material,
work in progress, etc. In case of a service provider resources will be employees,
facility from where they provide service and equipment with which they provide
service e.g. computer.
Proper management of all these
resources from start to end is must for smooth functioning of business. There
are several Enterprise Resource Management Systems available in market which
provide one platform to manage all the resources of an organization. I am not
going to do comparison of these systems in this chapter. We will be discussing
whether an organization should implement a single system or different systems
which are specifically designed for each function.
Answer is quite simple, there
should be one single system for all the functions in the organization. Use of
one single system removes chances of errors which could be there if multiple
systems are implemented. Let’s take an example. In an IT organization employee is the
most important resource as revenue generation depends on them only. So for this
type of organization close monitoring of employee count, employee cost, revenue
generated per employee becomes very necessary.
Now consider a scenario where
there are two different systems, System A monitors employees details other than
cost and System B which accounts for cost. These two systems are not connected
to each other. Now if System B needs some inputs from System A then data will
have to be extracted from system A and entered into system B manually. Whenever
there is manual intervention chances of mistake is there. So if any mistake
happens while entering data into system B then there will be difference between
outputs of both systems. Then someone will have to reconcile these two outputs
to do necessary rectification. And rectification is the most unproductive job
as its just matching of two records, there is no useful output from it.
Nowadays it has become a trend in
almost every organization to form a team, start a new project with some fancy
name and output of such projects is usually some new system. This team working
on a project will give a report stating that till now there was something wrong
going on in the system and we can improve it by introducing a new system.
If there is any problem in the
existing system then introducing a new system which will work in isolation is
not the solution to the problem. Multiple systems working in isolation will
only create multiple outputs which will lead to only confusion. Instead of
introducing a new system it is always advisable to include additional features
in the existing system so that it can serve the purpose.
An ERP should be developed in
such a way that it will fulfill any and all requirements of the organization. From booking of a meeting
room to procuring an assets, everything should be done through a single
resource management system.
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