What is The ERP system
We finally found the most influential business tool that helps manage all our company’s activities. This great tool is the Enterprise resource planning (ERP) system, once it gets into the company, everything changes to a higher level of organization. Let’s be professional and get to know more about our magical tool for today, the ERP system, through this blogger:
What is an ERP system?
The ERP system is a fantastic software tool in organizing all company’s sections such as Accounting, Manufacturing, Human Resources, Customer Relationship Management (CRM), Analytics, and Reporting. Every single person at the company needs such a tool, to help in the routine tasks and free up the time to focus on more interactive assignments, and also to collect all the different kinds of data in one safe and organized place. The ERP system is undoubtedly a trump card for the progress and development of any company.
What an ERP system does
The ERP system is personal assistance for the company that can do and organizes many tasks for its development. This system can collect all data from different sources to arrange it in one easy to access place; it also removes the duplicated data or tasks to eliminate any mistakes.
With an ERP system, we can have lots of benefits. It can handle the accounting and procurement part; also the project management is one of its features besides the risk management. ERP is beneficial in supply chain operations, where we will find all the needed details accurately through the ERP system.
How do ERP systems work
Simply the ERP system is a way to make the business processes more manageable and clear, as the ERP collects all the data entered by the company in one cloud to access it easier and faster. This process happens in its dashboard where each employee can access and use the entered data from any department in the same company.
Without the ERP System, the company’s database is scattered between all departments. Still, if we use the ERP, we can distribute all the data between employees and each department can reach what they need much easier. ERP system’s primary focus is to develop the business goals and eliminate the time spent on any task to be more productive.
The fundamentals of ERP are straightforward; it is in the shape of one dashboard that holds the common database used by the employees. We start to use this dashboard with the business processes inside our company’s departments, such as the human resources department, marketing, finance, or the operations department.
The primary key of the ERP system is to connect everything inside the organization, the information with the employees in one place. ERP collects the data for more organized distribution as the chaos will never know my company’s path again. ERP gathers all critical data in a safe place where all employees from the youngest to the largest will be able to use it with ease.
What is more comfortable about this system is that everyone is sure that he is using the correct and complete data, as there is no place for expired or wrong ones in the ERP system.
ERP systems business value
Through the workflows of the company, we can experience the values of the ERP system very clearly. Today, our company has so many benefits by using ERP, such as:
- Can provide detailed reports that help to improve the company’s insights
- He helps the company to know the best practices in the company’s departments which leads to reducing unnecessary costs.
- Customer collaboration becomes more accurate and accessible while they are sharing their information.
- It can organize the infrastructure of the company and unites all the similar activities for better performance.
- Risk management is one of the central values of ERP as it can control the collected data and the financial details to get accurate results we can follow.
- It saves a lot for our company in the operational and managerial expenses because it is integrated all these details in one system.
History of ERP
The concept of the ERP system existed a long time ago before the modern version appears now as the primary purpose of ERP is to manage and organize all business activities for better performance.
So in the 1960s, the basics of ERP started to show up and were used only to monitor the inventory or the manufacturing to get the organizing feeling, all these actions happened on papers in a very primitive way.
In the 1970s, they named this process by Material Requirements Planning (MRP) systems as its leading role was to plan the materials used in the operations.
But in the 1980s, the MRP wasn’t just for planning the materials but also for many manufacturing activities. Hence, they named the system by Manufacturing Resource Planning (MRP-II) as the updated version of MRP.
Then the ERP system concept started to appear by adding back-office control like HR or accounting besides the inventory and operational management. This development happened in the 1990s when all these actions began to get updated and hold more operations to control plus doing all this on a software cloud to be more affordable and easy to access for everyone.
Now in 2020, most of the companies of all sizes use the ERP system to get all the benefits from ERP to grow their business in a stable and organized manner.
Which ERP system to choose
Before choosing the most suitable ERP system solution, we have to bear in mind the size of our business, the company’s goals, the system costs that suit our budget, and the functions needed to improve the business. Here are some of the ERP system types that we can choose from:
SAP is the most popular type of ERP which provides two solutions for business processes. The first solution is R/3 which is a software that can handle all company sizes from the smaller to the larger ones, and also, can reach business needs very accurately. R/3 uses more than one of the data packages and runs on lots of platforms like OS/400, Unix, and Windows Server.
But B/1 focuses mainly on the small and medium-sized businesses, the modules it offers can target e-commerce, finance, customer relationship management (CRM), warehousing, or purchasing.
Baan ERP system
This type of ERP system was purchased in 2003 by Infor Global Solutions in the Netherlands.
The Baan ERP system is made for the manufacturing industries that work on products with a complete supply chain. There are lots of manufacturing companies already using the Baan ERP system, like Ferrari, Flextronics, the Boeing Company, and Evenflo. What is more interesting about Baan ERP is that we can customize it especially for each company’s workflow.
Microsoft NAV and AX 2009
We have to check the Microsoft packages for the ERP system, Microsoft NAV, and AX 2009. Microsoft NAV which is targeting small and medium-sized businesses. The modules offered by the Microsoft NAV system go for finance, e-commerce, supply chain management, analysis, CRM, and manufacturing.
But for medium and large companies, Microsoft made the AX 2009 system for them as it can be more customized than NAV. This system is more preferred to the companies that have a business in multiple countries as it focuses mainly on individual performance to improve productivity. Who can use Microsoft AX 2009 system is the manufacturing companies, retail-oriented companies, or wholesalers.
Oracle EnterpriseOne / E-Business / PeopleSoft
Oracle Corporation offers many types of ERP systems to suit all company’s needs and sizes. The first ERP product is the EnterpriseOne which offers pre-designed modules that make a deep understanding of all the different processes and requirements inside an organization. The EnterpriseOne modules can include manufacturing, CRM, human capital management, capital asset management, project management, finance management, and analytics. A very customized system like this should be for very particular industries such as food and beverage, construction, or real estate.
The other two types of ERP systems offered by Oracle are E-Business Suite Financials and PeopleSoft. E-Business system made mainly for the financial industries, as the modules offered are for budgeting, forecasting, and multidimensional profit analysis, financial and operational information, then for dynamic planning. E-Business system is the meaning of a customized ERP system as it focuses only on helping the finance department.
PeopleSoft is also a customized ERP system, but differently, it can work with all other business requirements. PeopleSoft can adapt to all business types and styles because it can work on a wide range of database systems.
Whatever the business type is, we can find a suitable ERP system from all these types. ERP technology’s primary goal is to improve the company’s performance and it will.
Key Benefits of ERP for Business
We start to consider the ERP system as the main asset of our organization because it has a significant role in organizing and improving every action inside the company. ERP systems can unify and protect the most essential information, it gives us detailed reports to follow up on all the business processes. Simply the day-to-day operations are now much smoother and efficient.
Here are some of the main benefits we had from using the ERP system in our company:
Unify IT Costs
Not because the ERP software is a very advanced technology, it will cost so much money. The ERP system’s significant benefit is it can unify the IT costs and improve performance efficiency at the same time. All the wasted costs paid on multiple resources are now focused on one advanced system that does the same tasks but in a much more efficient and accurate way.
Advanced Reporting and Planning
Having advanced reporting and planning leads to better insights. For each process, there will be a detailed report and analysis that helps us to analyze and compare all the actions done by employees from different departments without getting into the hassle of papers and emails.
ERP systems will not only reduce the costs; it will also reduce the time and effort made to complete a daily task to reach performance efficiency. We could leave the repetitive manual tasks to the ERP system and focus more on revenue-affecting tasks. ERP can also lead the company to the best practices methods, so we don’t waste time and get into the needed performance directly.
Not only our employees make use of ERP advantages, but also our beloved clients get some benefits too. ERP systems take the spreadsheet’s role of collecting the boring data of the clients and give the employees the time and effort to focus on the customer relationship more. Our customers will surely get the best customer services when the employees have nothing to do except customer satisfaction and retention.
Data Security and Quality
The prominent role of the ERP system is collecting different data from all company’s departments. Putting all our important data in one place should be risky in standard cases, but with the ERP system, this does not even exist. ERP system is the most secure place for our data as we can quickly know who can access or edit the information inside. This system also ensures the accuracy of data collecting as we will not expect any mistakes.
Who didn’t wish for a more comfortable and efficient way to deal with our business activities, the ERP system came to make our wish real. With ERP systems, we get data collection security and quality at the same time, which gives us time to focus on different and more critical tasks for the company’s progress. As time passes the technology always gets improved, and we have to keep pace with this development to ensure the continued success of our institutions. Choose the most suitable type for your own business and start the advanced level now.
MatixERP is a complete ERP software that is developed with great care to gather everything business managers need in one place, to run their business stress-free. From finances to customer relationship management, MatixERP helps you transform your business processes to meet today’s needs and tomorrow’s challenges.