Using a spreadsheet is diminishing, and companies are moving towards using resource planning software in their daily activities. The Enterprise Resource Planning system is a software or system used by organizations and businesses to collect and organize important information and data about the organization to operate efficiently and cost-effectively even when the business keeps expanding. Business professionals are turning around to this new approach for business (Sutduean et al., 2019). However, most of them still need to leverage the system’s use fully, and they are still to discover what it can do for the business. It will only last for a while before it becomes a must-have commodity. The ERP has different solutions for the business, and the business need to learn to use the solutions that suit the business needs depending on the structure of an organization.
Different characteristics of ERP make its usability suitable for different activities in an organization. ERP has a modular design, which is a characteristic that allows the systems to incorporate different business modules such as manufacturing, accounting, and logistics. Each module is assigned to different functions of a given section or department within the company. While these modules can operate independently, they are attached to an ERP system to offer seamless sharing of data and flow of information across all these modules. There is Central Common Database, a characteristic in which the data can be managed from a common central point when implemented. The data is stored and released once to be used by the respective groups, which helps reduce the errors caused by the data entry and other common flows related to the data entry (Langenwalter, 2020). The ERP also has a flexible and open database which is an important characteristic that allows the business to cope with the changing dynamics that occur in the business. This is enabled by the fact that the ERP has open system architecture which offers the advantage of attaching and detaching any form of modules when it is required. The last important characteristic is the automatic generation of information which acts as an intelligence tool, such as the executive information systems and systems that support important decisions.
The Global ERP systems market size was valued o be $45.82 billion in 20221, and it has been projected to keep rising to $90.63 billion come 2029 and has a market share of 9.1%, as the forecast suggested. ERP is positioned at number 2 after SAP, the biggest competitor in the market (Hayes, 2022). The competitive advantage of ERP compared to other resource planning systems is that it can automate the business process, giving insights and offering internal control. The leading vendor of ERP systems is Micro Dynamic 365 Business, with a market share of approximately 28.3 % and a market size of about 870,000 companies using its solutions for business operations with $98 billion and is expected to grow at a rate of 4% to reach about $200 billion by 2025. Oracle ERP cloud is one of the leading markets in offering software for cloud enterprise resource planning, it has a market share of 2.7% with a market size of more than 94,000 companies using its services with $237.3 billion but all combined with other services offered by the corporation the company is expected to hit $400 billion by the end of 2028. The other popular vendor is Workday, with approximately 13.05% with a market size of about$49.32 a billion making it one of the most powerful companies globally (Crouse, 2022). The company has more than 95,000 companies using its solutions across the world. The company is expected to grow at a rate of 3% and reach approximately $120 billion by the market size approaching 2029.
Hospitality is one industry that uses ERP systems to optimize most processes. For example, Starbucks is a company in the hospitality industry offering coffee and snacks and has been able to use the ERP in its administrative functions. The company uses Oracle ERP automation through making the business process operations like collecting information about the market in different chains across the regions, looking at the aspect of business, and seeing how it performs for the particular food items and menus in a given region. The company also uses the systems to automate administrative functions and all daily business processes, including but not limited to the supply chain, accounting and procurement, and project management (Alomari et al., 2019). The company, having scattered operations and having to make the collection of all these activities, has been able to automate the major processes using the systems to have centralized data that can be used to decide on human resources, sales, marketing, and sourcing materials.
Industries have used the technology for various value chain creations. Inbound logistics, the industry can realize where the supply of a particular material for raw materials needs to be transported to and engage sourcing through the systems. The operational industry benefits from the systems in getting information about the operations and where the items produced can be gotten in real-time, for example, by delivering daily operational reports and revenue data for sales. With ERP systems, the company can save about 20% of the cost, which could be used to run daily collections of reports by individuals. The company has cut the cost of human employment, reduced the time consumed to get to the analysis, and dropped information for the various departments for consumption. The Oracle ERP also has accommodated other integrated systems to offer more inputs for the business (Bischoff, 2022). In outbound logistics, the industry can focus on the demand and supply of the season and make the right decision of sourcing materials and stock based on the decision. For instance, the hospitality industry executes seasonality for tourism and gets ready during peak and off-peak.
Business process for ERP System
The business interaction using ERP will start with a customer making an order, for example, a lunch box. The company will create delivery notes and start the shipping process. Once the goods have gotten to the client, the invoice will be produced to the customers, and after payment, a receipt will be generated to complete the transactions.
Alomari, I., Amir, A. M., Aziz, K. A., & Auzair, S. M. (2019). Enterprise resource planning system business process attributes: A research note. Int. J. Appl. Res. Stud, 5(3), 111-115.
Bischoff, B (2022). Examples Of Big Companies Using ERPs. https://peoplemanagingpeople.com/topics/3-examples-of-erps/
Crouse, J (2022). Top ERP software vendors for 2023. https://www.techrepublic.com/article/top-erp-vendors/
Hayes, K (2022). ERP Market Share and Buyer Trends for 2023. https://www.selecthub.com/enterprise-resource-planning/erp-market/
Langenwalter, G. A. (2020). Enterprise resources planning and beyond: integrating your entire organization. CRC Press.
Sutduean, J., Singsa, A., Sriyakul, T., & Jermsittiparsert, K. (2019). Supply chain integration, enterprise resource planning, and organizational performance: The enterprise resource planning implementation approach. Journal of Computational and Theoretical Nanoscience, 16(7), 2975-2981.