||As a result of globalization, today's firms have become increasingly geographically diverse. As a result, many companies are looking for new ways to organize what can often amount to numerous overseas operations and involvements. Though advances in technology have given way to many valuable functional software developments, the challenge becomes coordinating the information between the numerous departments of an organization that are often located hundreds or thousands of miles away from each other.
1. New Opportunities Bring New Challenges
The effects of globalization can be seen everywhere in society today. It is a rare occasion for products to be contained within one office complex, or even one country anymore. Rather, the design, manufacturing and production, administrative support, and the marketing and selling of the final product take place in a variety of geographic locations. While this provides an enormous opportunity in terms of an increased market, it adds complications that must be addressed by an organization.
2. A Solution Is Needed
In particular, the geographic diversity of firms that operate within a global economy gives way to communication issues between the functional groups of the organization. These functional groups (i.e. administration and human resources, manufacturing, sales and marketing, accounting and finance, etc.) often end up independently utilizing their own, unique software, designed specifically for the particular tasks associated with the line of work. However, communication processes easily become disrupted between these numerous applications, contributing to communication breakdowns within an organization, and issues such as increased operating and administrative costs in an attempt to resolve these issues. Clearly, a more effective system must be employed if a business wishes to operate at an efficient level.
3. The Advantages of Enterprise Systems
An enterprise system (ES) is an integrated system that supports all of the applications required by a company and allows for the ease of communication between functional departments because all of the data is stored in one, unified database. Through providing a common interface with which to document and retrieve information, communication difficulties between the functional groups are greatly reduced, increasing the efficiency of the organization.
Perhaps one of the most important advantages of enterprise resource planning (ERP) is the cost savings from the simplified process of communication between the functions of a firm. This is manifested in three key areas.
First, the utilization of an ES reduces delays in the business processes as a result of the nearly real time communication provided. Secondly, it allows companies to avoid costly miscommunication errors, such as tying up resources in extra, unnecessary inventory.
Lastly, the lowering of the communication barrier results in increased visibility throughout the organization, allowing employees, managers, and executives a greater perception regarding the overall state of operations within the company.
In conclusion, the increasing need of businesses to expand geographically in order to achieve the greatest profitability presents great opportunities in terms of increased market share, but unique communication challenges as well. The most effective way to coordinate and disseminate information throughout an organization is through enterprise resource planning, which allows a firm to store data in one, unified method and share it through a common interface that supports all of the company's functional needs.
At the end of the day, it is within a company's best interest to be as efficient as they possibly can and avoid costly miscommunication errors, and ERP is the most effective way for a company to do so.