“Most of what we call management consists of making it difficult for people to get their work done”
- Peter Drucker
For those who do not know of Peter Drucker; they have been probably living under a rock for better part of their lives - Peter Drucker was an American management consultant, author and educator who is considered as the founder of modern management practices. Drucker’s books and scholarly and popular articles explored how humans are organized across the business, government, and non-profit sectors of society. He is one of the best-known and most widely influential thinkers and writers on the subject of management theory and practice.
As businesses and organization grow, ‘management’ tries hard to manage the new complexities and improve communications and coordination amongst the departments. The Manager is assigned the unenviable task of conducting overall supervision, improving efficiencies and coordination amongst departments. The manager does not have the required data, reports and resources to be effective at this mammoth task.
Soon the manager enforces cumbersome policies to bring about standardization of processes and generation of data that could assist taking critical decisions and improving efficiencies; without much avail; giving the manager the impression that he or she is in control. Here Drucker’s statements seems to validate itself. Drucker was rarely known to name individuals or organizations, he would rather focus on the root causes namely-structures, processes, norms, and routines. He would remind us that it is the responsibility of executives to challenge that design while being mindful of their companies’ ultimate purpose. This is precisely what an ERP addresses.
Due to increasing complexities of businesses with departments running into double digits and employees running into thousands, managing businesses cannot be physically addressed. Addressing the way critical business processes and functions are conducted is essential towards managing and facilitating growth & development of businesses. This is where I feel that the rise in awareness and acceptance of implementing Enterprise Resource Planning (ERP) software’s has been a positive step in effective management of organizations.
Enterprise Resource Planning are essentially different software modules (corresponding to business processes like accounting, warehousing, production, manufacturing, human resources etc) which are bundled together to form a comprehensive backbone that virtually facilitates every process that an organization performs.
These modules while supporting individual departments in their functions and processes, also support interdepartmental coordination and efficient workflows. Interdepartmental co-ordination is facilitated by bringing processes, workflows, approvals, timelines, transfers and other essential functional attributes under a single window. This powerful system has also demonstrated the potential to disrupt manufacturing processes by giving in depth insight & control into the factory flow.
Data intensive tasks such as Inventory Control and Warehousing can also be effectively managed. Tracking products from its constituent raw materials, its assembling, shipping, warehousing and finally sale can be centrally monitored. This gives business a huge impetus towards quality control and also allows it to effectively track its cost at each process and step. This enables an organization to calculate the true cost of its product and gives insight into efficiency management.
ERP modules also bring you closer to the customer by maintaining detailed records of all your interactions and transactions with your customer and also is used to gain insights into your customers need history, enabling upselling and cross selling. Many processes that involve exhaustive and time consuming manual data entry tasks can be automated as the flow of information within your organization allows individuals to manage their tasks and processes better.
Empowering the human resource of a business to manage their own tasks; rather than having a manager approve everything would bring a certain degree of decentralization in the functioning of the organization; that Mr.Drucker would have vouched for. Improving communication between the different departments in an organization allows for effective workflows and doing away with repetitive data entry and processing tasks.
Seamless flow of data allows for better administration in the organization. One of the biggest strength of ERP implementation is the generation of volumes of data and reports on processes, departments, people, accounts etc that allows for informed decision making, keeping in mind forecasts and trends that can be derived from the data.
Management in organizations are increasingly becoming disruptive and finally attuning themselves to the benefits of a leaner management. Technology is redefining supervision and management processes in organizations, causing the much needed disruption as the world becomes increasingly connected and globalized.
For more information on how ERP could help your business run more profitably and efficiently Contact us at synconics.