Enterprise Resource Planning Software
Published November 02nd, 2016 by

How Enterprise Resource Planning Software Help in Business

How Enterprise Resource Planning Software Help in Business

Whether you have a small or medium-sized business, there will always be an imperative demand for an effective method of organization so that you can achieve major competitive advantages for your company.  One of the most efficient tools for doing this task is an application called enterprise resource planning software (ERP).  The difference between this software and other sales and marketing software is that with ERP Software an organization is allowed to use a system of integrated applications in order to manage and automate back-office functions related to technology, services and human resources while the former only automates some aspects of a business.

How do Enterprise Resource Planning Applications and Software Work?

In order to understand how ERP applications work, you need to take into consideration all of the different and important processes of running a business.  This includes sales, accounting, inventory management, customer relationship management (CRM), distribution process management, product development and human resources.  All these various processes and functions of managing activities and information of the entire business and organization are integrated to fill up the primary function of  ERP Software.

An ERP Software typically functions using a shared database by various units of a business or organization.  Through this, synchronization of simultaneous and multiple processes go flawlessly together.  Also, this integrated software system allows streamlined processing and automation to the extent of helping employees to efficiently do their jobs, eliminating manual paperwork and transfer from office to office. When company data are stored in a separate system or offices, the company would depend on people to manage the trade of data and manually create the link between one office to another which are both labor and cost extensive, time-consuming and inefficient, therefore, resulting in low productivity for the entire system.

With the use of ERP Software, the data encoded into the system moves very quickly throughout the entire network and as soon as it appears in the system, the designated recipient of the data can access it keeping the flow of your operation going without a hitch. And the result of this is that every employee in your network can work effectively and can focus on better managing the business rather than waste their time and energy running around and go into the pile of documents and  manually collecting data and delivering it to the right person.

This integration provided by the ERP  Software allowed employees to work closely with different departments on your network by breaking down the information barrier as it provides them with the precise information on the specific job by eliminating the unwanted processes that the old system has and therefore, reducing the overall operational cost. And all these proves that once again, having an ERP Software in the backbone of your network is the effective, efficient and beneficial way of operating a business or organization. Feeling the need for it? How about checking out this review of the best ERP Software in the market.

Modules of an ERP Software

There are multiple ERP modules that can be purchased individually or as a package and could also be built from the ground up depending on what your business or organization requires. Every module gives focus on one area of the business process. Now, what are these modules and how are these modules going to help you run your business? Let’s find out.

Each module is designed to handle specific departments in your entire network. Let’s go through them one by one.

  1. Human Resource Module

This Module is for the use of Human Resource (HR) Department.  This helps in efficiently managing all your human resources. It helps to track down and manage employee records such as employee information, performance, skill matrix, designations, reviews, job description, attendance etc. Human Resource Module has sub-modules and one of them is Payroll System that helps manage salaries, payment reports and it also includes Reimbursement and Travel Expenses. This module can also track Employee Training.

  1. Inventory Module

This is used to track all sorts of items that the company or organization has from the once issued to the employee, properties, items in storage etc. items can be identified using a unique inventory code or serial numbers. And with the help of these unique codes and serial numbers, the inventory system can keep track of items. It can trace its current location or whether it was issued to an employee or where it is currently being stored. An integration of Inventory Module with Purchase Module in ERP Software systems.

  1. Sales Module

Typically, Sales Module includes processes like Sales queries, inquiry analysis, quotation drafting, sales orders, tracking pending sales order, sales invoice drafting with proper taxation, handling, dispatch or shipment of material or service etc. Sales Module manages all these transactions.

  1. Purchase Module

As indicated by its name, the Purchase Module basically takes care of all the processes that are part of the acquisition of every item from equipment and supplies to raw materials. Purchase Module has a lot of functionality such as listings of suppliers and vendor, drafting, receiving and recording quotations and purchase orders, it can also analyze quotations, track down purchased items. This module can also issue Good Receipt Notes (GRNs) etc. And when integrated to the Engineering & Production and Inventory modules, this can update stocks.

  1. Finance & Accounting Module

This Module manages both inflow and outflow of money by keeping track of all accounts related to transactions like expenditures, bank statements, account ledgers, payment receipts, balance sheets, budgeting, tax management etc. Having finance module is essential to a running business or organization to keep track of all financial data specially if you are operating on a national to global scale.

  1. Customer Relationship Management (CRM) Module

This Module helps to boost the sales performance of a company through establishing better customer service and customer relationship. CRM module stores all the gathered information of a customer like communication history, calls, meetings, inquiries, contracts, purchases made by the customer etc. to help manage and track customers for other or for future transactions. And for enhanced sales opportunities, CRM Module can be integrated with Sales Module.

  1. Engineering and Production Module

Essential to the manufacturing industry, Engineering and Production Module is best for any company delivering products. Consisting of functions like preparing a bill of material, raw material usage, production planning, track production progress, equipment preventative maintenance (PM) scheduling, actual production reporting. If integrated to Inventory Module, Engineering and production module will update inventory in real-time.

  1. Supply Chain Management Module

This Module, in particular, manages items and products flow from the manufacturer to market & market to manufacturer. It also involves demand and supply management, transportation and shipping, sales returns, replacement process etc.

What are the Different Types of ERP?

There are different types of ERP Applications that are suitable and appropriate for the kind business that you have:

  1. Web-Based ERP – This type is considered as an alternative to the traditional on-premise licensing model as they are known to be less expensive, easier and quicker to implement, and easier to maintain.  They are typically referred to as Software-as-a-Service or SaaS offerings where the user pays a monthly fee for the hosting of applications and the license to use them. One of the advantages of using SaaS aside from its affordability is you won’t be needing a local infrastructure with trained employees to maintain and support the system.
  2. Small Business ERP – this lightweight business management software is specially designed to cater to the requirements of a small business.  This enables all sides of an operation including development, manufacturing, sales and marketing.

How is ERP Going to Help Your Business?

There are a number of benefits and advantages that a business will significantly gain in implementing an ERP software system.  Aside from these advantages having ERP Software will improve your business’ productivity, efficiency, decrease costs and streamline process.  Below are some of the major factor that you will benefit in using an ERP Software:

  1. Efficiency.  With this, you will be able to eliminate duplication and repetitive processes which significantly reduces the need for manual entry of information.  This will likewise modernize business processes making the collection of data more effective.
  1. Integrated Information.While data are usually distributed through several separate databases, with ERP software every information can now be located and kept in a single location.  Also, data will be more consistent and up-to-date.
  1. This one aids in making the rather tedious task of reporting more easy and modifiable.  It improves your reporting capabilities thus making your company act accordingly to complicated data requests.
  1. Customer Service. In using ERP software, providing excellent customer service, because customer care associates will be able to interact with clients which improve your company’s customer relationship.
  1. This system will improve the accuracy, consistency and safety of data.

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