Enterprise Resource Planning is a well-defined, integrated management process of businesses delivered and meditated by software applications. It is a collection of software that aids the organization to collect, store, manage data of various business pursuits. ERP plans and manages the supply services, the manufacturing tasks, financial checks, HR distribution and inventory. The ERP tools help in resource planning by covering the end-to-end operational process of business activities. They trace and accumulate resources like -cash, raw materials, purchase orders, payrolls, etc. The system shares the database across the departments of finance, purchase sales etc., and ensures a free flow of information.
How Does ERP work?
Enterprise Resource Planning integrates the organizational procedures and pushes an error-free transaction and strengthens the firm's efficiency. The ERP software can collect and compare the data of various departments and generate reports based on the specific needs of the user. The integration of data gives insights into business performance and utilization of resources. Thus, any institute can reduce unnecessary resources, cut costs without compromising the quality, procure information, and make efficient business decisions. This will amplify growth and profitability.
To sum it up, ERP is an integrated process that operates in real-time and provides a common database. It gives consistency. The installation is done by the IT department.
In the 1990s, the Enterprise Resource Planning included the abilities of materials requirement planning, manufacturing resource planning and computer integrated manufacturing. The acronym of ERP was given to the Gartner Group. By the 2000s, many companies started to replace their outdated stems with ERP. Initially, it concentrated on back end office functions. However, with time it began to facilitate the front office functions like supplier relationship management and customer relationship management.
The ERP furnishes with various benefits:
Reporting - There are enhanced reporting tools with real-time information
The single source makes calculations easy. Useful reports and analytics are generated at any time which gives a unified reporting process.
Customer Service - Enterprise Resource Planning provides better access to customer information and quick responses. It also ensures in time delivery and authenticity of orders. Since the information is centralized and streamlined one can maintain a better relationship with customers.
Inventory Costs - the overhead expenses can be avoided and excess inventory can be discarded. There is total visibility of inventory levels, the future consignments to be received, and the inventory currently in transit.
Cash Flow - It facilitates more cash in hand for business and efficacious invoicing makes collection of cash fast.
Cloud Security - It has a security resource, there is no virus affected software and data is on multiple servers.
Improved Efficiency - ERP solutions eliminate the manual process giving the employees the time to focus on other revenue tasks.
Enterprise Resource Planning includes project management, customer relationship management, data services, financial and management accounting and manufacturing. It includes everything a company needs to stay productive. Thus, ERP helps to overcome the big challenges and gives a compatible system which can help the business to grow.