Enterprise Resource Planning (ERP) is an integrated process that helps an organisation to manage diverse functions. ERP manages financials, supply chain, operations, reporting, manufacturing, and human resource activities. ERP software integrates these functions into a complete system to streamline processes and information across the whole organisation.
Effective ERP management allows various departments to communicate and share information effectively in real-time. ERP application uses a centralised database for various processes to reduce physical work and simplify existing operational workflows. ERP application displays control panels/dashboards where clients can see information gathered continuously throughout the organisation to gauge efficiency and financial performance.
Components of ERP
In an ERP application, there can be multiple components/modules, with each of them focusing on one specific process or business function. Some of the most common and critical components of ERP are-
- Finance & Accounting
- Research and Development (R&D)
- Sales & Marketing
- Inventory Management
- Quality Control
- Customer Relationship Management (CRM)
- Human Resources Management (HRM)
- Supply Chain Management
- Product Life Cycle etc.
Need for ERP
ERP is a set of organised modules, mainly beneficial in large enterprises with complex, cross-functional organisational processes. It provides an integrated view of data from multiple sources so that organisations can get the up-to-date, precise status of information and participate in ongoing business processes at the optimal time.
Benefits of ERP
ERP benefits an organisation in many ways, some of the major advantages are as follows-
- Proper and predefined process
- Higher productivity
- Better insights
- Quality control and accelerated financial reporting
- Maximised process visibility and lowering risk
The objective of ERP is efficiency. Organisations can gain a good return on investment if management takes the right actions at the right time. ERP application assists in managing diverse procedures. Continuous developments in ERP process can put the organisation ahead of competitors.