THE CONCEPT OF ERP AND ITS IMPORTANCE

The concept ERP which means Enterprise Resource Planning is business software used in the management of an organization resource, financial resources, reports, operational activities, and its supply chains to necessary places. Although, many companies have in place some software used for daily activities, nevertheless, they can’t go beyond day-to-day business activities. This software is not even important for the future growth of the organization. Change is an unavoidable process in human endeavor, as companies expand, there is a need to keep with their database and this is where the importance of ERP comes in.

HOW ERP WORKS

The Modern ERP system is built in such a way that different sections of the resource planning software can interact with one another and also share a database. Each ERP module specializes in one business discipline, and those modules can be used by an organization to meet their daily targets or needs. The popular aspects of this software are logistics, human resources, finance, and sales. In the software are also specialized modules for industries which include manufacturing to retail.

For instance, a car producing company that constructs cars through the procurement of components and parts from different suppliers can use ERP to monitor the transaction. This is done through tracking demand and purchase of goods and also ensures accurate information is connected to the business reports, analytics, workflows, and processes. For instance, if a shaft is bought, with the aid of proper deployment of ERP, there is a uniform identification in the automotive manufacturing components. These components include source, size, materials, lot number, serial number, specification including other descriptive data items. The importance of data in running a company cannot be underestimated and this where ERP helps to make it easier through the effective collection to different sector of a company that needs it to carry out their responsibilities.

TYPES OF ERP

The ERP systems can be classified in different ways either premise, a different hybrid situation that has different areas combined, and in the private or public cloud. Below are some ERP with their various benefits that you can use to exploit your business to the fullest.

Cloud ERP

In this ERP, cloud computing provision is the major focus on the platform and it is handled by a particular provider depending on the brand you are using. It has the option of private or public cloud currently gaining popularity because of cheap advance payment costs.

On-Premise ERP

It is a conventional model where software is deployed and where everything is controlled. You can install it at the location of your choice in your data center. Staffs of an organization are responsible for the software installation and hardware maintenance.

Hybrid ERP

This model of ERP is for companies that want the combination of hybrid and on-premises for the business purpose. In this software, some ERP data and applications will be stored on the cloud, while some will be in the on-premise. Hybrid is often referred to as two-tier ERP.

ERP BUSINESS VALUES

The world has advanced in terms of technology and has been relevant to different industries in which ERP has played a major role. It has so many business values that helped organization run their activities smoothly. Organization processes and data can now be stored into ERP systems, different sectors in the organization can align for the improvement of daily output and workflows. Below are some it business values:

• Lower operational expenses through smoothed out business cycles and best practices 
• Enhanced cooperation from clients sharing information in agreements, orders, and buy orders 
• Improved proficiency through a typical client experience across numerous business capacities and all around characterized business measures
• Improved business understanding from continuous data produced by reports 
• Consistent foundation for the entire office, with all business activities having similar experiences
• Higher client reception rates from a typical client experience and plan 
• Reduced hazard through improved information trustworthiness and monetary controls 
• Lower the executives and operational expenses through uniform and incorporated frameworks.

In conclusion, ERP is a new advancement in technology that can put you ahead of competitors. It also helps to improve productivity in business by aiding employees for better performance. Aside from that, it helps you improve on customer service and satisfaction.