ERP systems serve as an information bank for the companies. Interdepartmental, simultaneous data flow is created and can be accessed anytime. By this way, especially processes that wait for each other or resources that should be used for more than one processes can be planned much more effectively. With the same principal, supply chain management can be done more efficiently, if wanted, firm’s database or parts of the database can be mutually shared with supplier. This flexibility is especially useful for companies whose suppliers/dealers/headquarters/etc. are located distantly. Inventory planning efforts can be reduced this way. Overall optimization can be achieved. Each progress that has been perfected, will lead next one to the same. (Demir & Bahadır, 2006, p. 7, 8; Bayraktar & Efe, 2006, p. 705, 706; Aydoğan, 2008, p. 116, 117; Mansor, 2010, p. 155, 156; Gupta, 2000, p.115, 116)
ERP systems work integrated with the departments. So, every departmants’ every process will be in a specific standardized procedure. Every standardized procedure lead company to reduced cycle times. This is the most wanted outcome for both parties. Company can reduce its costs, schedule and use their resources more effectively, minimize possible errors along the all processes and can respond immediately when an error occurs. Planning can be shaped again immediately, so substitute machinery can be used. Also any kind of inventory oriented problems can be seen from ahead. If needed, ERP system can automatically plan all needed goods according to sales, like production volumes, resource capabilities, good should have been purchased by the latest date, etc. Automatized systems will provide on time delivery to customers too because planning is automatically done by starting from the due date. These advantages that come with ERP, will result in reduced costs and also sales prices. Customers always aim to take higher quality product with lowest price. (Demir & Bahadır, 2006, p. 7, 8; Bayraktar & Efe, 2006, p. 705, 706; Aydoğan, 2008, p. 116, 117; Mansor, 2010, p. 155, 156; Gupta, 2000, p.115, 116).
If a company is growing, its biggest problem is control. Due to lack of control mechanism, performance will decrease. ERP system make firms control their growth steadily. Even with the international ones. It is easier to adopt other countries regulations because most of the ERP’s localized for a significant number of the countries and still can be integrated and managed from a single location. When a firm knows itself, strong and weak points, its limits, that firm starts to gain advantage against its rivals. As you can see, with ERP systems, even the biggest companies can know themselves to stay strong in market. Also ERP systems’ other benefits like integration, process analyses, cost management, etc. will always lead company to better process, more efficient productivity which results in cost reduction – the best competitive advantage. (Demir & Bahadır, 2006, p. 7, 8; Bayraktar & Efe, 2006, p. 705, 706; Aydoğan, 2008, p. 116, 117; Mansor, 2010, p. 155, 156; Gupta, 2000, p.115, 116).
Managers should be able to access any information they wish for healthy decision making. Speed of right decisions determine a company’s place in the market. Changing customer needs, environmental and governmental changes, new regulations, etc. effects companies fast and first. Rapidly blending in to the new circumstances is an elusive ability which can make firms to stay in the market and also step forward from their competitors. Managers should be able to change suppliers anytime they want, control their employees and their performance, evaluate their machinery, etc. All of these actions needs to be done with the most information can be gathered. Because, these kind of ground shaking decisions can be pioneer or devastating. ERP systems can make decision makers see the whole picture. (Demir & Bahadır, 2006, p. 7, 8; Bayraktar & Efe, 2006, p. 705, 706; Aydoğan, 2008, p. 116, 117; Mansor, 2010, p. 155, 156; Gupta, 2000, p.115, 116)
ERP systems are number one supporter of customer oriented companies. Every single purpose that ERP serves will increase customer satisfaction. ERP software make firms to be able to provide right product with right quality expectations, without any mistake, by the right location and the right time to the right customers. Changing market expectations always alter the firms’ production or sales activities according to customer needs. ERP can answer these needs rapidly and easily which will lead company to serve customers with the best effort. (Demir & Bahadır, 2006, p. 7, 8; Bayraktar & Efe, 2006, p. 705, 706; Aydoğan, 2008, p. 116, 117; Mansor, 2010, p. 155, 156; Gupta, 2000, p.115, 116).
ERP systems reduce companies’ overall costs. Synchronized information sharing technology provide firms to control their inventories and safety stock better and reduce inventory costs which is a huge cost item. Processes can run fast and smoothly within the supplier, departments and customers. Additionally, being able to access updated data all the time provides firms to gain advantage of making cost analyses anytime they need. Also any kind of reporting efforts made by employees will be decreased to zero because ERP can automatically create all reports. (Demir & Bahadır, 2006, p. 7, 8; Bayraktar & Efe, 2006, p. 705, 706; Aydoğan, 2008, p. 116, 117; Mansor, 2010, p. 155, 156; Gupta, 2000, p.115, 116). Overall, ERP systems will provide decrease in management and labor costs on operational level; cost control, market sharing, equally distributed capital, and increase in profitability on tactical level; growing to the new markets and an advantage to be a cost leader in the markets on strategical level. (Mansor, 2010, p. 156).
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