Enterprise Resource Planning – ERP
To answer the question “What is ERP system or software” I prepared an easy to understand explanation for you. Short for Enterprise Resource Planning, ERP system assists companies reaching business process automation.
The software consists of several modules or sections. Each module is focused on one area of business and proposes administration of process or group of processes; stock management, supply chain management, accounting (administrative or industrial), purchase, sales or CRM.
Each module is operated alone but together they make a whole and work as a unit. In this way the ERP System integrates the different business entities with one single application. While operating the different modules the ERP software facilitates the flow of information from one area to another.
The output of this integration is the data bank; a single relational database repository that enables communication between the modules and transfer and exchange information.
ERP Effects of the Organization
After establishing a stable database the users my analyze the data using analysis tools and an executive information system (known as business dashboard or business intelligence).
Another important aspect is the automation of back office functions. The effects on the organization: cutting down costs, eliminating mistakes, improving the reporting, better control of inventory, reducing purchase costs, and increasing the work efficiency. But most important is the transparency.
These effects lead to increased profitability (which is the main goal when implementing ERP software).
The main Strategy of ERP system
The main strategy of ERP system is suggesting for each business area a basic workflow for managing the processes; these processes are than combined from more sub processes.
For example the Sales process is combined from several sub processes: offer, order, delivery and invoicing. These processes are all managed with the sales module.
The main areas that are managed by the software are financial management, supply chain management, manufacturing, customer relationship management and sales and marketing. Each will usually use a specific module.
The different modules of the ERP software are purchased based on what best meet the business needs of the organization. Each module has unique functionalities for core business processes with all the required features.
The modules can be customized – depends on the software. The effects of implementing an ERP system are enormous; it will improve both external customer relationships and internal collaborations
ERP System for my Organization
But the real question that you will need to ask yourself is: what is the right ERP system for my organization and my business needs?
In depth most of the system are one solution industry oriented; ERP for automobile industry, ERP for medical de vice industry, ERP software for the food industry and etc. Such ERP systems contain very similar functionality, features and capabilities that suit these industries.
Comments are closed.