Enterprise resource planning, or simply ERP, plays a crucial role in the development and continuous operation of countless companies worldwide. Some consider it an essential workplace component that ensures the smooth workflow of day-to-day operations. Indeed, using smart ERP solutions has paved the way to the success of several enterprises.
Despite ERP’s significant contributions, not everyone is aware of how it works. If you are considering implementing it in your company, you must first have a good idea of what it does and how it can help your business. In doing so, you can find the right ERP software for your enterprise. To get you started, here is a quick rundown of ERP and how it works.
What is ERP?
There are several technical ways to describe ERP. At its core, however, it simply refers to a consolidated process where different people and departments can accomplish their tasks using a single, integrated system. Several back-office processes—such as entering data and counting inventory—are automated, which helps avoid mistakes and saves time, money, and labor.
Programs specially designed for ERP are commonly called ERP software suites. These suites are made up of modules, which you can customize and purchase separately. Thus, you don’t need to buy a complete suite when installing an ERP system and only buy those that can address your company’s needs.
How Does ERP Work?
ERP is a highly complex system. It has numerous modules, functions, and features that can differ from one company to another. That said, you can break it down to some of its core features: a centralized database, automated processes, and company integration.
Try to visualize a business that does not use ERP. In such a company, different departments have their own programs and data centers to accomplish their tasks. Hence, the information that one department gathers is limited to its staff. When another group needs the information, however, they either need to call or visit the department. The limited access to information is a significant barrier to smooth workflow, especially for enterprises with international branches.
In an ERP system, all of the data is stored in a centralized database. It includes the information of employees, customers, finance data, and other relevant figures. Depending on their authorization, employees from different departments can access the data they need to perform their duties. For example, people from manufacturing can immediately receive an order for a new batch of products instead of hearing about it first from sales.
Another key feature of ERP is the automation of many back-office processes that are often repetitive and sometimes tedious. Re-entering data from orders, receipts, sales, and so forth is one example of a repetitive task that’s prone to human error.
In an ERP system, once an order comes in, the information is automatically sent to relevant departments for faster processing. Spreadsheets are updated, employees are notified, and products are shipped as soon as possible.
Automation is particularly handy in managing inventory and accounting. In inventory, you need to keep a close watch on stocks and expiry dates. With an ERP system, you can receive notifications on these items, so you can take the necessary steps to address these concerns. Meanwhile, in accounting, the automated calculating of several figures helps generate more accurate data and reports.
A company is a busy place. Different departments have a job to do, and to accomplish that job, they often need information from other departments. An ERP system connects these different elements to help them function more efficiently. Some of the ways it does this are through:
- Easy access to relevant data
- High visibility of daily operations, even in other departments
- Effective monitoring of the order pipeline
- Real-time updates of purchases, orders, and revenue, among others
Using ERP leads to increased collaboration, better communication, and streamlined workflows. All are crucial to the continued operation and growth of an enterprise.
Indeed, a business using ERP is like a well-oiled machine, where the various parts and cogs work in sync for a common goal. It is especially useful to large enterprises with branches or partners stationed overseas. With ERP, you can efficiently manage and monitor daily operations through a single system.
Overall, there are several benefits to implementing an ERP system. Bear in mind that it is not limited to big corporations. Many programs cater to small and medium-sized enterprises that business owners can check to improve daily operations.
To find the best ERP software for your company, it is vital to find and partner with a professional systems provider who can take into account your company’s specific needs. Aside from helping you find the right ERP software, they can also assist in implementing it, training your staff, and choosing the ApTest deployment method. By doing so, installing a complex ERP system becomes more achievable within a given timeframe with your resources maximized.