What are the ERP Basics?

It doesn’t matter what type of business you are engaged in. It is critical these days that every business implements an ERP solution as this will reduce internal costs, increase efficiency and improve the process in the entire organization. A business that does not have IT departments will have a hard time rolling their head about this concept, but this will help you understand more about ERP.

Basic Information on ERP

Also known as Enterprise Resource Planning, this is a system created to aid companies to manage the key elements of their businesses. Take for example a floor manager at a shop can use the ERP to check the production order’s status. ERP can even be utilized by HR managers to process requests for payrolls and access to employee information. Even truck drivers can update the shipment status using the ERP system while driving. The possible uses of ERP are limitless at this point.

Most of the time the ERP systems are linked to a relational database. It gathers information from business transactions then sorts them out into data tables. When all these data are organized automatically, it gives users the ability to easily pull the information they desire from the system at a very fast rate. It will be faster for them to analyze the data, too, whether the goals are based according to performance or finances. The functionality of ERP is vast and has modules available in almost every department of the company that uses and creates business data.

The greatest benefit of using ERP

Visibility in real-time using cloud or onsite ERP solution is the greatest benefit business will acquire when using ERP. As it provides on time information on resources available, including the progress of initiatives and orders. Using ERP provides businesses to be quick and agile in responding to any requests or changes made. The visibility is not only limited within the confines of business. ERP can share and connect data with carriers, partners, suppliers and other parties that are not part of the business yet are invested with it.

Common ERP system models

The systems associated with ERP are widely known for fostering a wide array of modules. Most of all, various ERP modules often support most of the functionality of every business, which makes ERP a one-stop-shop-kind of IT system.

Every vendor associated with ERP, such as Oracle, SAP, Microsoft, Epicor, Infor and many others, provide their kind of standard system, but you will find a couple of modules appear in almost every suite. These modules include for human capital management and human resources, customer relationship management, accounts payable and financial management, project management, product lifecycle management, order management, inventory management, asset management, and systems that aids in manufacturing organizations, warehouse management, and supply chain management. For smaller vendors of ERP, they provide more specialized systems that are pointed towards specific industries.

Comparison with MRP

Often ERP is compared with MRP or material requirements planning. However, they are different. The reason why they are associated with each other is that MRP is ERP’s predecessor.