Essay on The Outcomes and Impact of ERP on the Enterprise and its Profitability

The introduction of ERP may have a considerable impact on the performance of the enterprise, although all benefits and positive outcomes may not be seen to the full extent in the course of first years after the introduction of ERP. In this regard, the experience of Ikea has proved the effectiveness of ERP. After the introduction of ERP in Ikea, the company has managed to make a considerable progress in its business development. At this point, the improvement of the customer relationship management and internal business processes along with the rise of sale rates of the company may be viewed as the major advancements achieved by the company with the help of ERP.

In fact, shortly after the introduction of ERP, Ikea faced certain problems with the adaptation of employees to the new system, which required certain skills and experience. However, all employees as well as customers of the company and other stakeholders accustomed to ERP as an integral part of Ikea. In such a way, Ikea has integrated ERP successfully and stakeholders adapted to ERP fast. After that ERP has started to bring positive effects and stimulate the further progress of the company.

The analysis of the first three years after the implementation of ERP by Ikea reveals the fact that the company has managed to increase its sale rates significantly. At first glance, the direct correlation between the introduction of ERP and the rise of sale rates may be unclear, although it is evident that the company has progressed steadily since the implementation of ERP due to qualitative changes that have occurred not only within the company but also in regard to customers of the company. The rise of sale rates naturally stimulated the further development of Ikea and its market expansion. The company increased its sales and became capable to offer more diverse products to its customers.

In this regard, the improvement of the customer relationship management due to the introduction of ERP is one of the major effects and benefits of ERP. ERP contribute to the introduction of new communication style the company used in relation to its customers. Ikea offered customers the better quality of services and the new way of informing them setting them information that may interesting for customers automatically. In addition, the company provided customers with information they were interested in using ERP. As a result, the company did not waste the time of its employees for the direct communication with customers. Instead, the company has started to use the automation of the company-customer communication brought by ERP.

In addition, the company has improved internal business processes consistently. As a result, ERP brought consistent improvement due to the automation of internal business processes. In such a way, ERP contributed to the improvement of the efficiency of employees’ performance and to the higher productivity of employees because they had not to perform many business processes anymore since they were automated in terms of ERP. Hence, Ikea has managed to improve its performance due to the rise of the employees’ efficiency.

Thus, Ikea enjoyed the improvement of the company-customer relationship due to the improvement of the customer relationship management. Furthermore, the company increased its sale rates. Finally, the company improved its internal business process. All these improvements were brought by ERP.


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