Enterprise Resource Planning (ERP) can be defined as a system that helps organizations automate and manage their key functions like financials, supply chain, manufacturing, operations, reporting and human resources. These systems can be either deployed on-premises or in the cloud.
ERPis designed to be used by big enterprises and requires exclusive teams to handle the management, customization and deployment. Whereas smaller ERP applications are lightweight solutions customized to automate your businesses as per your requirements. The whole idea is to integrate all the main business functions at one common place so as to manage them effectively and easily.
For Example, if an order is placed by a customer, only an ERP system can successfully let you know transparently all the stages it will go through before finally reaching in the hands of the customers simply because it’s one common system that is accessed by all the departments.
The data is shared amongst all the departments like Finance, Marketing, Sales, Purchase, Accounting etc.
ERP Software consists of multiple modules that are purchased based on a specific set of requirements. Each of these modules would focus on one of the business functions like sales, HR, accounts etc.
ERP has helped a great deal in eliminating the need to have standalone computers in each of the departments like Finance, Sales, and Accounts etc. and instead integrate them all at one place. These departments still have their own software’s but they are all connected to one another so that any department knows what is happening in the rest of the departments. Therefore, depending upon the requirement a company can go for only an ERP finance or HR module and add on the rest later.
ERP modules help to improve the data flow across the organization with the help of a central information repository.
ERP field has witnessed many changes from last couple of years. In fact, it has evolved to a great extent. Following are the categories:
Nowadays everyone from executives and employees need information anytime and everywhere. So in the coming times , they would need a mobile ERP for reporting and managing the processes.
The cloud’s demand has been steadily increasing from quite some time considering the advantages that come along with it. Earlier users were a bit reluctant but now they are becoming quite acceptable about it.
Social ERP as the name implies is certainly related to social media which has captured the market and holds a crucial value. So vendors have been quick in this regard to add social media packages to the ERP software’s.
The enterprises tried to build one big ERP taking care of all the functions of the business, but there have been some very expensive and big failures which resulted in adopting two-tier ERP. In this, one system is deployed at the corporate level and the other one is managed at the subsidiary level. This system is often preferred by big organizations with multiple branches in different locations.
The right ERP software for your business will help you keep all your business functions aligned leading in profitability and efficiency. ERP was traditionally meant to be used by big players only but then with time and demand vendors came up with ERP software’s for small and medium scale companies too. Following are the categories:
ERP systems for big organizations are usually built from the ground up to suit your specific needs. Whereas, for a small business, one from the existing range would work fine. All these are mostly grouped into three categories: Manufacturing, Finance or Logistics based companies.
ERP systems are complex programs which require high-end computers to run them. So instead of buying the software to run them in your offices, there are options to access these software’s and data over the internet by paying a subscription fees. These are termed as Software as a Service (SAAS). Since its running on a remote server, you can access it from anywhere by using an internet connection.
This is usually a light-weight versions of the ERP software designed to meet the needs of small businesses. You need not go for complete ERP software, instead opt for modules which fit your business model. For Eg. Your business may require automating only the sales and order management modules but not the warehouse management. Therefore these are basically the scaled-down versions at lower and more cost effective prices involving comparatively less data and less complex screens and dashboards.
ERP is often referred to as “Back-Office Software”. It doesn’t handle the front-end selling part, rather handles the process of automating the different steps involved right from receiving a customer order till its delivery. This ERP system tracks and records all the information like customer’s credit rating, order history, inventory levels, shipping schedule etc. Whole credit goes to the ERP software for improvising the order fulfillment process. People in all the departments see the same information and can update it as the order passes from one stage to another. People from the respective departments can track where the order is at any point of time with the help of ERP system. This speeds-up the order delivery and minimizes the scope of error.
With the right ERP software, all your business processes are aligned resulting in effective decision making to enhance the team’s overall productivity. Below are some major benefits of why companies undertake ERP:
Financial Management – Each Department has their own set of numbers to present when it comes to the company’s overall performance whether it be Finance Department, Sales Department, Purchase Department etc. It is the system of ERP which creates a single version of the truth that cannot be denied as every department has access to this one common system. It also takes care of the organization’s assets, cash flow and accounting aspects.
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