Advantages Of ERP

In the absence of an ERP system, a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another. Tasks that need to interface with one another may involve:[citation needed]

* ERP systems connect the necessary software in order for accurate forecasting to be done. This allows inventory levels to be kept at maximum efficiency and the company to be more profitable.
* Integration among different functional areas to ensure proper communication, productivity and efficiency
* Design engineering (how to best make the product)
* Order tracking, from acceptance through fulfillment
* The revenue cycle, from invoice through cash receipt
* Managing inter-dependencies of complex processes bill of materials
* Tracking the three-way match between purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)
* The accounting for all of these tasks: tracking the revenue, cost and profit at a granular level.

ERP Systems centralize the data in one place. Benefits of this include:

* Eliminates the problem of synchronizing changes between multiple systems - consolidation of finance, marketing and sales, human resource, and manufacturing applications
* Permits control of business processes that cross functional boundaries
* Provides top-down view of the enterprise (no "islands of information"), real time information is available to management anywhere, anytime to make proper decisions.
* Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models into a single structure.
* Shorten production leadtime and delivery time
* Facilitating business learning, empowering, and building common visions

Some security features are included within an ERP system to protect against both outsider crime, such as industrial espionage, and insider crime, such as embezzlement. A data-tampering scenario, for example, might involve a disgruntled employee intentionally modifying prices to below-the-breakeven point in order to attempt to interfere with the company's profit or other sabotage. ERP systems typically provide functionality for implementing internal controls to prevent actions of this kind. ERP vendors are also moving toward better integration with other kinds of information security tools.