Should companies adapt to ERP's ?

What is enterprise resource planning (ERP) ???

ERP is a software architecture that "attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs. Each of those departments typically had its own computer system optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that the various departments can more easily share information and communicate with each other." Source

Why ERP? 

"ERP systems are cross-functional and enterprise-wide. All functional departments that are involved in operations or production are integrated in one system. In addition to areas such as manufacturing, warehousing, logistics, and information technology, this typically includes accounting, human resources, marketing and strategic management." Source For example, if you call customer service to buy a computer, the customer service reps use their ERP system to see if inventory is available which was previously updated by people in the manufacturing units. Depending on the level of inventory, they can respond immediately thereby speeding up the process. By integrating these two different departments, the company can provide better and faster service to its consumers, thereby saving a lot of costs involved previously.
When used effectively, ERP can be very useful within a large company. Different departments share information on a regular basis. Without ERP, every department is standalone and lot of resources are wasted on storing the same redundant data in multiple servers. For example with ERP, the employee appraisal can be directly linked to payroll.

Some more advantages (Source):

• "Eliminates the problem of synchronizing changes between multiple systems - consolidation of finance, marketing and sales, human resource, and manufacturing applications.
• Permits control of business processes that cross functional boundaries.
• Provides top-down view of the enterprise (no "islands of information"), real time information is available to management anywhere, anytime to make proper decisions.
• Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models into a single structure.
• Shorten production leadtime and delivery time
• Facilitating business learning, empowering, and building common visions.
• Some security features are included within an ERP system to protect against both outsider crime, such as industrial espionage, and insider crime, such as embezzlement. "

Some possible disadvantages:
But the grass is greener on the other side. Not everything is so great about ERP.

• Implementing ERP for a small company can take from 3-9 months, while for a large organization it can take years.  
• It could be very expensive and is limited in customization.
• Also, technology changes are so fast that while you keep updating, there is another new technology available in the market. 

Lets consider the previous example of calling the customer service to buy a computer. "With ERP, the customer service representatives are no longer just typists entering someone’s name into a computer and hitting the return key. The ERP screen makes them businesspeople. It flickers with the customer’s credit rating from the finance department and the product inventory levels from the warehouse. Will the customer pay on time? Will we be able to ship the order on time? These are decisions that customer service representatives have never had to make before, and the answers affect the customer and every other department in the company. But it’s not just the customer service representatives who have to wake up. People in the warehouse who used to keep inventory in their heads or on scraps of paper now need to put that information online. If they don’t, customer service reps will see low inventory levels on their screens and tell customers that their requested item is not in stock. Accountability, responsibility and communication have never been tested like this before. People don’t like to change, and ERP asks them to change how they do their jobs. If you simply install the software without changing the ways people do their jobs, you may not see any value at all—indeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does." Source


So should companies adapt to ERP?
This decision lies with the management of the company. If the usage of ERP is meaningful to the operations of that specific company, if its benefits can be reaped and employees can switch to it easily, then it should be implemented. It is powerful tool which can be used to the benefit of a few companies but it can also slow down a few businesses if its disadvantages outweigh its benefits.