ERP is an acronym for enterprise resource planning. It mainly refers to software packages and Systems used by different companies to manage their daily activities. It is used to manage activities such as procurement, accounting, manufacturing and project management. ERP systems are known to work together in order to aid various business processes. Not only that, but it also enables the flow of data between the various business processes. ERP system aids in eliminating duplication of data by gathering a company’s transactional data from various sources. In addition, it also provides Data integrity.
Today, the ERP system has emerged to be one of the greatest necessary for every business and organizations. Thousands of business houses are known to make use of ERP systems for their benefit. For these companies, it can be said that ERP has become completely indispensable.
Fundamentals of ERP
ERP system is known to design around a defined data structure that usually has a common database. ERP systems make use of common definitions and constructs and common User experience in order to provide access to the company’s data from various activities.
One of the key principles of ERP systems is the collection of data for wide distribution. With the use of ERP systems, you can have a single database. This allows in eliminating all the chaos involved. With the ability of a centralized and secure data repository, everyone in the company will be confident about the fact that the data is up to date, correct and complete. It also ensures Data integrity for every single task that is performed throughout the organization.
Business value of ERP
As already mentioned earlier, ERP is one of the most important systems that is required by business houses. That’s because, with the use of the ERP system, businesses can avail several benefits.
1. It improves business insight:
2. It helps in reducing the operational costs of an organization.
3. With the use of an ERP system, an organization can promote enhanced collaboration.
4. ERP systems are also known to improve the efficiency of business processes.
5. The system can also cut down on the risk factor by the process of data integration.
6. The system also provides a consistent infrastructure to an organization.
Different types of ERP
ERP can be of various types. It can be grouped by business size, deployment, and functional levels. Here are the main types of ERP.
1. Generalist ERP: these solutions are known to come with powerful integration and customization to meet the various requirements of the industry.
2. Vertical ERP: this type of ERP is mainly used by small-sized businesses that focus on a particular niche.
3. Small business ERP: this type of ERP solutions can be described as on-premise or off-the-shelf cloud ERP solutions.
4. Open source ERP: open source ERP solutions are mainly beneficial for developers as it can increase user adoption and usability because of the highly customized processes.
To conclude, it can be said that ERP is very crucial for the smooth flow of business processes. This is why every organization needs to be smart enough while choosing an ERP system for their business.