Enterprise resource planning (ERP) is a management software platform that companies use to automate their critical back-end business functions. These generally include activities like accounting, financial reporting, manufacturing, material procurement, supply chain operations, and human resource management. The system integrates multiple business processes to streamline workflow between them. It collects transactional data from numerous sources, processes and then distributes it to the end-users. This helps to boost internal efficiency and ensure proper data integrity.
How do ERP software systems streamline business operations?
In most companies, every department generally operates its own independent, standalone business software applications. These applications are made to perform certain specific tasks and are not compatible with those of other departments. There is hardly any data connectivity and exchange between the software applications of these different departments. This leads to the following issues which hamper proper inter-departmental co-ordination:
- The need to painstakingly reconcile the business revenue reports various departments generate,
- A significant increase in data redundancies at the time of recording financial transactions, and
- The top managerial personnel cannot make correct decisions due to the lack of accurate business visibility.
When companies operate an enterprise resource planning (ERP) software system, different department processes enter into its common interface. The central database collects critical information relating to these transactions, executes, and then disburses it to the relevant end-users. If any employee unintentionally enters identical data twice, the system issues the necessary ‘’error-message’’ alerts. This ensures proper data consistency and streamlines business operations.
What are the key features of most ERP systems?
ERP software platforms available in the market have a complete suite of interactive modules sharing a common database. Each of these modules focuses on handling tasks and resolving issues affecting one particular area of the companies’ business. However, there is complete data connectivity between these different modules and the central repository. In every ERP software system, finance, accounting, logistics, sales, and human resources are in-built modules. Fortunately, the enterprises can buy additional industry-relevant modules under a license according to their specific needs.
The salient features of all modern enterprise resource planning software systems are as follows:
- Accurate key performance indicators (KPI) analytics to boost business visibility,
- Real-time information updates and alert generating capabilities,
- Precise visual representation of business information via dashboards for better decision-making,
- Deployable as a cloud-based, independent on-premises or hybrid system, and
- Supports advanced processes like artificial intelligence, the Internet of things, and machine learning,
The advantages of operating ERP software platforms for companies are as follows:
- Boosts internal productivity,
- Accelerates real-time and accurate business reporting,
- Ensures cost savings by eliminating data redundancy,
- Enhances business visibility on commercial operations for better decision-making, and
- Improves business agility and scalability by ensuring easy access to real-time business data.
Operating a suitable cloud-based ERP software solution allows companies to improve internal productivity, data integrity, and decision-making. However, the platform enterprises should integrate and configure into their IT infrastructure. It should even be compatible enough to work seamlessly with their current business software solutions and third-party system. Above all, the reliable service provider overseeing the system needs to ensure it is user-friendly and cost-effective to maintain for a long time.