Enterprise resource planning: business needs and technologies
| DOI | https://doi.org/10.1108/02635570010286078 |
| Pages | 81-88 |
| Published date | 01 March 2000 |
| Date | 01 March 2000 |
| Author | Siriginidi Subba Rao |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Enterprise resource planning: business needs and
technologies
Siriginidi Subba Rao
Central Leather Research Institute, Adyar, Chennai, Madras, India
Introduction
The difference between a successful and
profitable organization and an average one is
the quality of service. The quality comes
when companies undergo a ``metabolic
change'' in the way they manage customers
and potential prospects. The smart
organizations today could anticipate and
exceed customer expectations that are
evaluated on the basis of quality, time,
service, availability and efficiency. The one
tool that innovative and progressive
organizations have come to increasingly
depend on in this endeavor is enterprise
resource planning (ERP) solutions. ERP has
been a software solution integrating the
various functional spheres in an
organization ± a link through the entire
supply chain, aimed at adapting best
industry and management practices for
providing the right product at the right place
at the right time at least cost. Over the last
decade, there has been a significant shift in
business models from hierarchical line-of-
business-oriented activities to more process-
driven models that is motivating a
re-examination of enterprise applications
software. The challenge for ERP systems is to
set up and integrate information resources
across geographically spread business units
to enable optimization across the
organization.
The objectives of ERP systems include:
1 provide support for all variations of best
business practices;
2 enable implementation of these practices
with a view towards enhancing
productivity; and
3 empower the customer to modify the
implemented business processes to suit
their needs.
Building a customer process
through ERP
To understand how an ERP could help build
world-class customer process, it is essential
to examine the following:
1 The benefits that accrue from a customer
centric system include:
.Loyal customers cost less and buy
more year after year. The time lost in
recouping the cost of acquiring a new
customer is saved.
.Referral revenue ± which occurs when
the satisfied customer refers his
associates to the firm, is increased and
subsequently, the longer the
relationship with a customer, the more
new customers are referred to the firm.
.The premiums by way of loyal
customers who would pay more for the
products because of satisfaction with
the quality delivered and do not want
to risk trying another product. Loyal
customers will not be tempted to defect
by the competitor's discounts and they
would not require discounts to stay
with the firm.
.The loyal customer also grows into an
experienced customer who has learned
the product line and processes there by
supporting self in a number of
transactions when the firm work
together that further brings down
costs. Organizations can also increase
customer inventory by taking the
customer reuse in the form of referrals,
thereby almost doubling the customers
in half the time.
2 What tools, techniques and analyses that
an ERP would incorporate, in order to
make it customer-centric:
.Data needed to improve customer
profitability.
.How do the firm provide the data
needed to improve customer
profitability?
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Industrial Management &
Data Systems
100/2 [2000] 81±88
#MCB University Press
[ISSN 0263-5577]
Keywords
Resource management,
Customer orientation,
Small- to medium-sizedenterprises,
India, Computer software
Abstract
Presents briefly ERP as a software
solution integrating various func-
tional spheres in an organization.
Highlights its role in building a
customer process, ERP technolo-
gies, available systems, viz. data-
base systems, communication
protocols and user interface fra-
mework. Details organizational
preparedness for embarking and
evaluating the investment on ERP.
Discusses its application, selec-
tion criteria for small and medium
organizations and a case study in
Indian context. Concludes that
ERP is the tool for an integrated
information system to stay com-
petitive and customer-oriented for
all organizations.
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