In short, by integrating all the departments and functions across entire organization, increasing communication, accountability and responsibility ERP software improves company's business performance. With ERP the information from one department to another passes at lightning speed and after logging onto the ERP one can see whatever information he seeks. How ERP improves company's business performance can be understood with an example. Previously if sales person takes an order he may not have any information about the warehouse or customer's history but with ERP customer service representatives have all the related information on their screen like payment performance of the customer and his credit limit from finance department, stock position of the desired product from the warehouse, shipping schedule from the logistics and he has access to even more information at just click of a button.

On the other hand, customer gets entire information from one single point and without any delays, like exact bill amount, mode of payments available, other products or services, offers and delivery date. This was not possible through manual working or while working with disintegrated systems installed in each department performing their specific tasks. Since ERP brings all the departments under single software and stores all the data in a single repository granting access to see the information to every authorized user it enhances functioning of organization immensely. This is how ERP software can improve company's business performance.

Enterprise resource planning brings change; implementation of ERP is not just deployment of the software which will work as company works right now. ERP will work only with efficient and productive present processes and will vanquish redundant and unproductive processes replacing them with efficient ones. It is not like accounting software which follows rules and regulations of accounts to generate the desired reports, it changes the working of the company to do the work in better way. It does not allow different departments to relax thinking if there is a problem beyond their department's wall it is somebody else's problem, it brings in responsibility and accountability for every action and decision. These changes enable ERP improve company's business performance.

Enterprise resource planning improves project management; it covers all the functional areas of any organization like manufacturing, sales and distribution, accounts payables, receivables, inventory, human resource etc. Thus it improves coordination between departments for executing any project. Another advantage with ERP is its capability to help management in better decision making. Reporting through business intelligence tools like decision support system, executive information system, data-mining, early warning system enable management to make better and timely decisions.

Compliance of policies and good practices becomes easy and smooth, even in case of organizations working with many business units at distant locations management can check any non-compliance or bad-practice immediately. This maintains uniformity in entire functioning and improves credibility of the company. Strict policy compliance and following good practices makes ERP improve company's business performance. Though enterprise resource planning does not help bringing in more business upfront but by improving internal functioning and enabling correct and timely decisions it certainly contributes in a big way to increase flow of business and profit margins.

Author's Bio: