ERP Systems

What does ERP mean?

ERP (Enterprise Resource Planning) is an integrated platform providing effective management of all company activities related to finance and accounting, sales and marketing, manufacturing, purchases, warehouse, planning, human resources, business analysis, etc. ERP represents a software system which combines all business processes in a single database and a tool for all employees to be more effective and successful.  

Initially, the term ERP was associated with the way in which corporations plan their resources. Thus, until recently only large business organizations with complex processes were supposed to use ERP systems. Due to the dynamic development of business software over the years, today ERP systems are applicable to all variety of companies.  

The main characteristics of the ERP systems are:

• Common database
• Single work environment
• Integration of all modules and real-time operation
• Flexibility, broad applicability and global focus  

ERP systems are based on standard business processes that deliver the best world practices to the companies. The different ERP providers approach the diverse processes in different ways but all of them use similar business logic. With the implementation of an ERP system every company has two alternatives: either to deploy an ERP system and adapt the business processes to it or to modify the ERP so it fully corresponds to the processes occuring in the organization.

ERP systems include different functional modules but companies rarely use all of them. This is why it is of extreme importance to determine which of them will be deployed as soon as the analysis of the business processes start. Functional modules such as Accounting and Financial  Management are used by almost all companies; however, others such as Production and Service, are not needed in trade companies for instance.   

ERP systems are significantly different from the rest of the business software. Functions such as human resource management (HRM), supply chain management (SCM), customer relationship management (CRM), finance, production, warehousing and logistics are usually managed by separate software applications with different databases and networks. Besides, every one of them is set in a way that corresponds to the needs of the respective department. An ERP solution integrates all processes and software and it uses a single database so that different departments can easily exchange data among each other. The ERP system is fully integrated software where data is entered once only. With no need for additional treatment data finds its way to all relevant modules and becomes immediately accessible to all users authorized to access it. Thus, users form different departments see one and the same data which, if necessary, could be updated in a timely manner. By using an ERP solution every employee appointed in the Financial department, for instance, can track whether a given order has been shipped from the warehouse or not. To find out the location of a certain order, you only need to log on the ERP system and check its status.

Today, ERP solutions are used by a wide range of companies which employees work more effectively and with less mistakes. ERP allows real time access to the data needed. The integrated systems facilitate the overall activity of the company, reveal new opportunities and guarantee gain of competitive advantage and business prosperity.