Why ERP act as a Catalyst for an Organization ?

Last Updated : 25 Nov, 2020

According to Deloitte Consulting, an ERP is a packaged business software system that allows a company to “Automate and integrate the majority of its business processes, share common data and practices across the enterprise, produce and access information in Real-Time Environment”.

Why ERP is a Catalyst or an Activator :

It improves the integrity and flexibility of an organization. Like if an organization set up its ERP then the Employee, Managers, HR, Accountant, etc. access the same platform with details and functionalities of each user is different.
It Improves Speed and Efficiency where every user access modules which is assigned to them and they work efficiently without any difficulty.
It provides more reliable delivery and higher services to customers and both ends (Customer and Service Provider) workers work flexibly on that system.
It sustained involvement and Communication of Management.

An ERP system shorten the throughput :

Throughput = processing time + wait time + move time

It improves reporting and planning time . Implementation and ERP suite across the department means the Organization has a single unified reporting system for every process. By having a single source, it generates useful reports and analytics at any time.

All the above points show that ERP act as a catalyst for an Organization.

This can also be explained with an example :
An ERP act as a Catalyst this can be explained by comparing a system before ERP and With ERP system.

Before ERP : The below picture describe System before ERP.

In this scenario, all the departments of this system have a separate database. in this, it is very difficult to contact other Department, it means it is a very time-consuming task because one department has to wait until other department does not acknowledge the query.

With ERP :The below image describes System with ERP.

In this scenario, all the departments have a common database. It forms an integrated system through which different departments can easily contact each other without wasting any time. So from this following benefits are obtained.