ERP Explained

Enterprise Resource Planning (ERP) is a type of software used by companies to manage day-to-day business operations. Such as accounting, procurement, project management, risk management, and compliance, and supply chain operations.

The complete ERP suite also includes software that helps enterprise performance management, planning, budgeting, estimating, and reporting on a company’s financial results.

ERP systems connect multiple business processes and enable data flow between them. By organizing the company’s shared transaction data from multiple sources, ERP systems eliminate data duplication and provide the integrity of the data with a single truth.

Today, ERP systems are very important for the management of thousands of businesses of all sizes and all industries. For these companies, ERP is as essential as the electricity that keeps the lights on.

The video below clearly explains ERM just go through the video below.



ERP Fundamentals

ERP systems are designed as a single, defined data structure (schema) that contains a common database for firms. It helps to confirm that the information used in the enterprise is generalized and based on general definitions and user experiences.

These key structures are associated with business processes driven by workflows in the business sectors (such as finance, human resources, engineering, marketing, operations), liaison systems, and the people who use them. Simply put, ERP is a tool that integrates individuals, processes, and technologies into a modern organization.

For example: Consider a company that makes cars by buying parts and components from multiple suppliers. an ERP system helps to track the need and purchase of these items and to ensure that every part of the entire buy-from-pay process is consistent and integrated into the organization’s workflows, business processes, reporting, and analysis. Uses clean data. When the ERP is properly implemented

In the example of an automotive manufacturing company, a component, for example, “front brake pad”, is identified equally by part name, size, material, source, lot number, supplier part number, serial number, cost, and specification. , Along with an abundance of other detailed and data-based items. Since data is the lifeblood of every modern company, ERP makes it easy to collect, organize, analyze and distribute this information to each individual and system.

ERP ensures that these data fields and properties go to the appropriate accounts in the Company General Ledger so that all expenses are properly tracked and represented. If one software system (or perhaps a set of spreadsheets) has front brake pads called “front brakes”, another “brake pads” and a third “front pads”, it is difficult for the automotive manufacturer to identify the front brake pads. Find out how much the front brake pad costs per year and whether it should change suppliers or negotiate better prices.

A broader ERP principle is the central collection of data for wide distribution. Instead of multiple independent databases with an endless list of disconnected spreadsheets, ERP systems can be confusing, with customers ranging from CEOs to account payment clerks creating, storing, and accessing the same data obtained through simple processes. Whether you have a secure and centralized data repository, everyone in the organization can be confident that the data is accurate, up-to-date, and complete. Data integrity is guaranteed for every work performed throughout the organization. Click here for email marketing tools.


enterprise resource planning


Advantages of Enterprise resource planning (ERP)

Businesses use enterprise resource planning (ERP) for a number of reasons, including expanding the business, reducing costs, and improving business operations. The benefits sought and perceived by one company may be different for another company; however, some are noteworthy.

Integrating and automating business processes eliminates redundancy, improves accuracy, and improves productivity. Sections that have interconnected processes can now synchronize work to achieve faster and better results. Learn about AI implementation in digital marketing.

Some businesses benefit from advanced reporting of real-time data from a single source system. Helps accurate and complete reporting agencies and interested parties such as planned shareholders to report appropriate planning, budgeting, forecasting, and operating conditions.

ERP allows businesses to quickly access the information customers, sellers and business partners need, contributing to better customer and employee satisfaction, faster response rates, and increased accuracy rates. Affiliate costs are often reduced as the company operates more efficiently.

Departments can do well to collaborate and share knowledge; A new synergistic workforce will improve productivity and employee satisfaction because employees will be able to see how each functional group contributes to the company’s mission and vision. Also, manual tasks are eliminated, allowing employees to devote their time to more meaningful work.

ERP applications help the corporation gain more self-awareness by combining information about the production, finance, distribution, and human resources. Because ERP combines different technologies used by each department separately, thus ERP applications can eliminate expensive duplicates and inconsistent technology.

The video below explains how does the typical ERP system work?



Functional areas of the ERP

The ERP system covers the following common areas of operation. In many ERP systems, these are called and grouped into ERP modules:

  • Financial Accounting: General ledger, fixed assets, vouchers, reconciliation and payments, receivables and collections, cash management, including financial consolidation.
  • Management Accounting: Budget, Expenditure, Expenditure Management, Operational Expenditure;
  • Human Resources: Recruitment, Training, Rostering, Payroll, Benefits, Retirement & Pension Plans, Diversity Management, Retirement, Isolation
  • Manufacturing: Engineering, Materials Bill, Work Orders, Schedule, Capacity, Workflow Management, Quality Control, Manufacturing Process, Manufacturing Projects, Manufacturing Flow, Product Life Cycle Management
  • Order Processing: Order in Cash, Order Entry, Credit Checking, Price, Available Promises, Inventory, Shipping, Sales Analysis & Reporting, Sales Commissioning
  • Supply Chain Management: Supply Chain Planning, Supplier Schedule, Product Configurator, Order for Cash, Purchasing, Inventory, Claim Processing, Warehousing (Receiving, Keeping, Picking, and Packing). Click here to explore the best CRM tools
  • Project Management: Project Planning, Resource Planning, Project Casting, Task Analysis Structure, Billing, Time and Expenses, Performance Units, Activity Management
  • Customer Relationship Management (CRM): Sales and Marketing, Commissions, Service, Customer Contact, Call Center Support – CRM systems are not always considered part of the ERP system, but the Business Support System (BSS)
  • Data Services: Various “self-service” interfaces for customers, suppliers, and/or employees
    Management of schools and educational institutions.

Hope! You like the content. Don’t forget to like, share, subscribe, and leave your comment. Thank You.

2 CommentsClose Comments


  • giesen
    Posted October 15, 2021 at 3:08 pm 0Likes

    The ERP topic is well explained

Leave a comment

Subscribe Don't Miss!!!

Don't miss out on this amazing opportunity - subscribe now and start enjoying all the benefits!!!

Newsletter Subscribe

Get the Latest Posts & Articles in Your Email


We Promise Not to Send Spam:)