Abbreviated as ERP, enterprise resource planning system is software that automatically manages and integrates all business back-office function of technology, human resource and service delivery. An ERP system typically allows an organization to effectively manage all office functions on one general platform.
Instead of maintaining different spread sheets from finance, human resource management, product planning, sales and marketing, manufacturing and development divisions, the ERP system merges all these facets. This allows business owners to efficiently, easily, and automatically generate reports which could otherwise be done manually with a lot of difficulty and time expended. For example, with sales orders flowing automatically to the system, the order management department can process orders quickly and efficiently, while the finance department can close books faster and more accurately. It is good to note that ERP systems consists of modules which are individually purchased depending on the firm’s activities. The common modules include: hr, finance, marketing, distribution and accounting among others. Therefore ERP systems help company workers do their job more efficiently by breaking down the barriers between departments.
This module of ERP software replaces spreadsheets and manual updates with a single source of price management, strategy, and execution. The software manages revenues and financial leakages It also implements price strategies, eliminates pricing errors and enforces pricing policies. Price management software ensures that price is not only optimized for profit, but also considers customers and competitors. This helps in coming up with the best price point to allow the organization to be competitive in the market.
Financial Data Software
This is another component of an ERP system that allows the company or an organization to consolidate financial data. This maintains compliance with accounting laws and regulations in making financial reports. For large companies, financial data includes profits, revenues and expenses throughout a fiscal year. In individuals or small companies, it refers to bank accounts, assets, credits and debts. All these are consolidated and analysed effectively by financial data software to help make accurate reports and hence necessary steps are taken.
Supply Chain Management software
This module of ERP system deals with goods received and warehouse management. It also handles customer order processing, sourcing, sales and distribution, inventory and purchasing order processing. A good software is able to forecast and determine future needs. The software does this by analyzing consumption and balancing any disparity between supply and demand.
This is a module within ERP, which deals with paying a company’s employees. The software automatically calculates and generates salary deductions, tax forms, direct deposits and void payments. This prevents errors that arise from manual muster roll.
Project Planning Software
Project planning involves completing a project within a certain timeframe and with assigned materials. This module within the ERP is able to plan projects automatically by setting measurable objectives, planning the schedule, identifying deliverables and making a support plan.
Benefits of an ERP System
All the above modules are integrated into the general ERP system to ensure efficiency in service delivery. ERP systems can be used by all organizations regardless of their sizes. Its benefit is mostly felt in time management, efficiency and cost reduction. If one implements a good ERP system, they will benefit from the following;
These benefits ensure the organization makes maximum profits and has high quality customer satisfaction.