The full form of ERP is Enterprise Resource Planning. This is a collection of software tools that are used by modern business organizations to perform their functions. A company has several departments that are responsible for the various functions. The ERP system software is a tool that collectively performs all the business to enhance functions required to increase brand value.
Previously, the various departments of the companies had their own organized database which was managed individually by these teams. This resulted in a lot of mismanagement and the departments being unaware of the overall development of the company.
In the contemporary times, with the use of ERP Systems, companies are increasingly organizing their capabilities and functions. As a result there is substantial enhancement in the business influence of the user organizations.
What is an ERP System?
The Enterprise Resource Planning system falls under the branch of softwares used for managing business activities. This software assimilates the essential functions of an organization and performs these with increased speed and accuracy. In terms of business management, ERP is considered to be an assimilation of applications which is increasingly becoming popular.
Some if basic functions of this system include acquiring raw data, organizing and managing that data. Later, this is stored in a comprehensible manner and finally used for performing business analytics. The basic business procedures are analysed in details by this system.
The analysis is possible because the user organizations keep a consolidated database. This means that as opposed to keeping separate databases for each of various departments, now there is an assimilated one. The system is made up several applications each of which share the data acquired and stores it in the database.
Currently, the Enterprise Resource Planning software is an industry worth a million dollars. It is dedicated to providing smart and advanced business solutions that transform the patterns of functioning in organizations.
In the beginning of its introduction, the software was being increasingly used by large scale organizations. This was due to the huge amount of data involved in all the processes of their functioning. But, with the change in the working patterns of industries, companies irrespective of their size are using ERP solutions.
The simplified resource tracking feature is another additional benefit of ERP software. This helps companies to monitor the follow of resources and helps in deciding the subjects where resource allocation is required.
Types of ERP System:
Traditionally, ERP systems can be classified into multiple types. These classifications arose from the need of industry specific ERP softwares. Some of these categories can be discussed as follows:-
Supply chain management: This is employed in organization dealing with supply chains. The system helps employees of the company to control and coordinate the functions of the supply chains.
Product Lifecycle management: This specific module of enterprise resource planning is helpful for companies that have their own line of productions.
Supplier Relationship Management: This type of ERP systems can helps organizations to keep track of the activities and payments made by suppliers.
Customer Relationship management: This Enterprise resource planning module is especially useful in performing several functions related to customer management. These functions include acquiring data regarding the changing behavior patterns and trends of customers. As a result, companies can provide their customers with enhanced customer experiences.
Apart from this basically ERP System could be segmented in Cloud, Hybrid & On premise.
Who are the users of the ERP System?
In general, the ERP systems are used by multiple organizations. Although previously, the software was popular among huge organizations, no distinction exists anymore. Companies of all exposures and functions are employing these applications.
One of the biggest advantages of this software is that, it is not industry specific. This implies that the tools are used by various industries in the contemporary times. Among several others, some industries that use the ERP systems are as follows:-
- Building and construction
- Sales
- Production and management
- Whole sale and distribution
- Defense
- Research
The nature of the ERP softwares may seem like these solutions are rigid in nature. But in reality, these applications can be easily customized in order to fit the specific requirements of the multiple industries. For instance, in the production industry, a company may require to keep track of the legal rules and regulations in this context. The applications used in the specific company can be customized to fulfill this individualized requirement.
In the present times, several industries have certain requirements that are specific to their process of functioning. Due to this reason certain ERP systems are being designed to fulfill such personalized needs. As a result, no additional effort is spent in customizing the general ERP applications to suit the specific needs.
How does ERP software work for the business industry?
The ERP softwares have been positively influencing business for quite some time. This can be considered as a completely abled system of applications that assist businesses in all possible ways. Among several others, the most important of these functions include the management of mundane daily operations. Along with this managing the accounts and financial functions of a business are among the second most important functions.
In addition to this the management of the manufacturing and distribution units of a company form the third level of organizational functions. One of the most basic functions is the acquiring, managing, storage and analysis of relevant data. This proves that the Enterprise Resource Planning software performs a complex arrangement of function that is indispensable to organizations.
These applications have contributed in creating collaborative environments in the user organizations. As a result, the departments of companies work in close collaboration with one another. The final outcome of all these functions is the enhanced productivity of organizations that ultimately leads to increased revenue income.
ERP System Features:
The modern enterprise resource planning solutions do a lot more than manage and analyse data. Currently, these help in creating inventories of the derived data, tracking orders and managing the supply chains of various organizations. In addition to this, they facilitate the process of acquiring, producing, distributing and fulfilling the demands of the market.
The features of the software can be enumerated as follows:-
- Assimilating – One of the most basic functions of the ERP system software includes the assimilation of data from various departments if the company into one consolidated database. This provides the management a concentrated and enriched view of the performance metrics of the organization.
- Automating – Certain basic tasks in an organization that are repeated very often become the core of the functions performed by companies. This creates a generalized group of activities that are to be performed at specific intervals. These functions can be performed automatically when the ERP system is deployed and used by the user organizations.
- Analyzing data – Data is presently the basis of all organizational functions. The analysis of raw data by a company helps in coping with the changing business patterns and trends. Enterprise resource planning tools help in performing advanced data analytics.
- Creating Reports – Analysed data is not of much use unless it can be understood by the management and various departments of a company. As a result, post analysis data is organized in various reports and dashboards that ease the process if understanding. The reporting modules provided by the ERP solutions help creating visually attractive datasets that can be shared easily.
- Track resources and functions – The platforms of ERP systems help organizations to track the resource allocation patterns of businesses. Along with this, companies can analyse the acquired data in real time giving them valuable business insights.
- Accounts – The Enterprise Resource Planning softwares can analyse the financial information of a specific organization. As a result, the companies can further generate their budgets or allocate financial resources accordingly.
- Managing Finances – The process of managing finances with ERP system software is complex organizational process. It involves in recognizing the ways in which finances can be invested for better results. Along with this, the process determines whether or not the current use of financial resources is beneficial.
- Customer experiences – The ERP solutions expand the perspective of the organization by providing them with meaningful customer insights. This helps companies to understand the changing behavior patterns and demands of customers. As a result the production and management of the company enhances.
- Increasing Sales – The sales departments of organizations can largely benefit from the deployment of ERP systems. The sales leads can be increasingly materialized with great ease. Along with these business campaigns can be designed and executed with greater efficiency.
- Human Resource Development – Every ERP system has an HR component which deals with enhancing and maintaining the human resource development within organizations. Complex functions like making tax deductions and benefit calculations are made easy by these applications.
- Managing supply chains – The Enterprise resource planning systems are also known to evaluate and create profound supply chains. This is done through a rigorous process of evaluating the demand, production and supply resource patterns of a company.
- Assessing Manufacturing patterns – In the field of manufacturing products, ERP solutions assist with keeping track of the raw materials and the ultimate goods produced. These also manage the order of functions, payment of bills and tracking the distribution patterns.
Conclusion:
ERP software is extremely beneficial for organizations in the modern business arena due to the wide range of functions performed by them.
