ERP Software

ERP Software Systems

ERP is the acronym of Enterprise Resource Planning.  ERP utilizes ERP software applications to improve the performance of a business’ resource planning, management control, and operational control.

ERP Software Systems are systems with goals, components, and boundaries.  Simply put, the goal an ERP Software System is to improve and streamline the internal business processes of a company. The components of these systems are: ERP Software made up of modules that automate the activities within a functional area of an enterprise; Business processes such as strategic planning; ERP users or the employees of the business who will use the software system; and the Hardware and Operating Systems that run the Software. The boundary of ERP Software Systems can fluctuate.  For example, an ERP system for a small company has a boundary that is within the business itself while one for a manufacturing company tends to have a boundary that includes suppliers, distributors, and customers. When put into operation, however, an ERP Software System is not just the different segments.  The three segments work together for the purpose of helping a business run more efficiently and more effectively.

The software of an ERP system is an amalgamation of numerous modules. An individual module imitates one of the key functional areas of a business. Some of the more widely used modules  are those that handle product planning, parts and material purchasing, inventory control, product distribution, order tracking, finance, accounting, marketing, and Human Resources. It is not unusual for a business to pick and choose which modules it actually needs and implement solely those.

A production planning module makes full use of data from manufacturing capacity, parts, components, and material resources and helps predict future sales and earnings when comparing these to past history. A purchase module automates the processes of classifying suppliers, negotiating price, awarding purchase order to the supplier, and billing processes. The inventory module is used to approximate how much stock is going to be needed at any given time.  The goal is to have enough to fill orders, but not so much that the company loses money on materials no one wants. A financial module is at the heart of most ERP Software Systems because of its ability to collect data from every department and turn it into valuable information for budgets, balance sheets, and financial statements. And the last module that is commonly purchased is the HR module. This module makes the process of managing company employees much more professional and economical.

Written by :

Amy Cruz