ERP Systems Demystified: Understanding Core Functionality

Enterprise Resource Planning (ERP) systems have become the norm in a modern business environment. These platforms are very complex and have multiple modules that can be implemented. A successful ERP implementation requires very intentional management of change. Without this, a new ERP can create chaos in your order to fulfilment process.

These software systems are designed to help businesses manage their resources in a more effective fashion. This article will give an overview of how an ERP can help your business and what to think about when choosing to implement a new ERP.

What Role Does an ERP System Play?

An ERP system can perform a number of very important functions in the day-to-day running of a business. They are used to enhance core functionality in order to centralize and streamline many of your most vital operations. These can include everything from conducting inventories to handling your weekly payroll.

ERP integration tools can also be extremely useful in overseeing other aspects of your business. If you are involved in purchasing, you can use the system to keep track of all of your outgoing expenses and incoming payments. You can also make use of an ERP setup to manage shipping operations in order to guarantee fast deliveries to your clients.

The basic idea that underpins an ERP system is centralization. The program gives you instant access to data concerning all of your basic investments in your business. You will know exactly how much you have spent, where your money is going, and what you need to do to maintain a smooth operation. All of the guesswork is removed from the equation.

Using an ERP system also allows you to communicate on a more effective level with the people who work for you. You can use the system to function as a single source of information for your employees. This way, everyone has access to the same data. The system thus acts as a centralizing agent that keeps each department on the same page.

Common Examples of ERP Systems

There are various types of ERP systems available on the market. However, most of them share common traits that emphasize their easy integration into a modern business system. The most common ERP system examples include the following:

  • Manufacturing Execution Systems (MES)
  • Financial Accounting & Reporting (FAR)
  • Procurement
  • Customer Relationship Management (CRM)
  • Asset Tracking
  • Supply Chain Management (SCM)
  • Project Management
  • Human Capital Management (HCM)
  • Inventory Management
  • Warehouse Management
bullpen full of IT workers helping businesses with their software and troubleshooting needs
Photo by ThisisEngineering RAEng on Unsplash

The Most Common ERP System Modules

ERP systems tend to come complete with a full set of modules. These are designed to maximize the efficiency and cost-effectiveness of the system. Depending on the industry you work in, you can make use of several or all of the included features. The most commonly included modules in an ERP system can include:

The Main Benefits of an ERP System

ERP systems come with a wide range of benefits that are well worth looking into. Perhaps the main benefit that they offer is complete centralization of all of your various systems. This offers you the ability to oversee each aspect of your operation from a single vantage point. You can pilot the program on-site or remotely.

Another major benefit comes in the form of system automation. You no longer have to take hours out of your busy day to oversee processes that are tedious but necessary. The ERP system you employ for the job will do the work for you. This will also free up many of your employees to concentrate on tasks that require more of their focus.

There is also the fact that your level of productivity is bound to increase. An ERP system will enable you to create more products at a higher level of quality. Best of all, you will be doing so in a much shorter period of time. The more products you create, the more you can sell. The result can be a windfall of profits.

ERP systems have become increasingly sophisticated and accurate over the past decade. These are systems that promise to become even more efficient and vital to the success of businesses all around the world.

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Craig Zedwick
I'm a chemical engineer and operations leader, but in my spare time I love technology, building computers, and DIY projects. I like to dive deep into researching new topics, so my articles tend to focus on that same level of detail to help others like me to learn as much as they can.