ERP or Enterprise Resource Planning is a software that is used by companies to integrate the work of different departments within the company and provide easy work flow between the same. These departments could be Finance, Human Resources, Marketing & Sales, Procurement,Manufacturing etc. It solely depends on the day to day operations of the company and how it is structured.
ERP systems essentially helps an organisation easily manage its supply chain and be quick in responding to the changing customer needs. Through ERP system, different departments get to access each other's information, data and collaborate in a more efficient way.
Example
For e.g. lets take the case of global retailer like Walmart. Walmart is known for its ability to continuously implement new technology in its daily operations, making its supply chain more lean and agile.
An ERP system will help Walmart manage its supply chain more effectively. The same system will link it with its suppliers, warehouses, delivery heads and retail stores. Ultimate goal for Walmart should be to reduce its inventory cost, know which products are selling quickly in which stores and being able to order those products to its suppliers for quick delivery to it's respective warehouses and then later to retail stores.
ERP system will help each department in Walmart access real time data, that a customer in Chicago picked up a blue polo shirt, the supplier in China will automatically get new order for blue polo shirt to be replenished. Warehouse department will know when it arrives and delivery heads will know which retail store to ship it to. So, it has reduced costs for Walmart and made its supply chain more agile.
Microsoft is a global multinational, and to know as such which particular ERP it uses is very difficult. Organisation of its stature might be using multiple ERP systems to keep operations smooth. On the contrary, Microsoft itself is an ERP system provider for mid size companies called Microsoft Dynamics 365.
SAP and Oracle are also some of the other leading ERP solutions provider to businesses across the globe.
Risks Associated:
1. Poor Implementation: Installing an ERP system in a company can be long, complex and cumbersome process. It is considered as major overhaul of IT infrastructure and if not handled properly can lead to negative results.
2. Employee Acceptability: Employees are the key stakeholders within this process, because after all they are the end users of the new system and lack of motivation on their part towards the same could really hamper the success of ERP. Proper training and briefings should be given to employees on the new system.
3. Infrastructure Maintenance: Like any IT system, ERP system will need to be maintained, bug fixed and even audited by respective professionals to keep the operations in check and avoid any failure.
4. Financial Risk: ERP installation is usually a major dent on company's balance sheet, hence if project management is not done optimally or bungled by supervisors, then economic benefit of ERP might never be realised. And overall operation might be a heavy loss to the company and its shareholders.
How does Microsoft use ERP software and what particular value these processes provide to the company?...