ERP for Retail Sector
What is ERP?
Enterprise Resource Planning systems or the ERP systems refer to the software packages that integrate all the data and the related processes of an organization into a unified Information System (IS). An ERP system uses a central database that holds all the data relating to the various system modules. In order to achieve a seamless integration, an ERP system uses multiple hardware and software components. ERP packages are heavily used by larger retail chains. Designed to facilitate the administration and optimization of internal business processes across an enterprise, ERP packages have become the ...view middle of the document...
Enterprise Resource Planning-ERP is, essentially, an integrated software solution used to manage a company's resources.
* Retailers are using ERP for product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders.
* With ERP, retailers can save money in maintaining inventory, reduce the respondent time to the marketing demand, and get competence.
* More and more enterprises in the world are using it since its initial adoption.
* A typical ERP implementation in a large retail organization takes between one and three years to complete and costs millions to billions.
* ERP software packages have an enterprise wide reach that offers cross-functional capabilities to the organization. An ERP package takes care of the various business processes such as order entry, logistics and warehousing. It also caters to the different business functions such as accounting, marketing, strategic management and the human resource management.
Contemporary Challenges in the Retail Industry
In the current business environment, the retail industry faces two major challenges that threaten its profitability and the long-term survival prospects. They are:
Market competition - To beat the competition, retailers have to understand consumer demand at the point of interaction and respond to the various inputs in real time across the enterprise. This calls for a proactive approach on the part of the retail organization to sense the specific requirements of the consumer before other competitors and respond to them in real-time ensuring customer satisfaction in the process.
Moreover, margins in the retail business generally are very low and that removes any scope for waste or inefficiencies in the business processes. Efficiency is critical to survive in the retail industry. A proactive approach on the part of the retail organization requires an enterprise wide monitoring and control of the various business processes that may ultimately lead to the desired efficiencies and long-term customer satisfaction and profitability.
Regulatory pressures - In order to meet the regulatory standards, the retailers require an enterprise wide process visibility, data access and near-instant performance reporting. However, the need for flexibility, process efficiency, reliable information, and responsiveness is very hard to achieve given the existing portfolio of legacy, home grown and packaged software applications used by a majority of the retail organizations.
Therefore, a retail business would benefit immensely from an integrated IS infrastructure which continuously monitors and dispatches the necessary information of the flow of goods all the way from supplier to the cash register and then back to accounting as well as other functions of the retail organization.
Advantages of Using ERP
1. Retail specific...