Enterprise systems also known as enterprise resource planning (ERP) systems, solve problems by collecting data from various key business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources and storing the data in a single central data repository. This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for different parts of the business to work more closely together.
Enterprise systems speed communication of information throughout the company, making it easier for businesses to coordinate their daily operations. When a customer places an order, the data flow automatically to other parts of the company that are affected by them. The order transaction triggers the warehouse to pick the ordered products and schedule shipment. The warehouse informs the factory to replenish whatever had depleted. The account department is notified to send the customer an invoice. Customer service representatives track the progress of the order through every step to inform customers about the status of their orders.
Enterprise systems give companies the flexibility to respond rapidly to customer requests while producing and stocking inventory only with what is needed to fulfill existing orders. Their ability to increase acurate and on-time shipments, minimize costs, and increase satisfaction adds to firm profitability.
Enterprise systems provide valuable information for improving management decision making. Corporate headquarters has access to up-to-the-minute data on sales, inventory, and production and uses this information to create more accurate sales and production forecasts. Enterprise systems provide company-wide information for managers analyze overall product profitability or cost structures.