ERP is a method of integrating an organization's data and processes into a unified system. To understand ERP systems, we need to examine each component and how modules work.
Simply put:
ERP system is specific software implementing enterprise resource planning strategy. It consists of various functions necessary for uninterrupted business operations.
ERP modules are divided into functional and technical modules
Functional Modules
Financial Module
Generates financial reports.
HR Module
Simplifies hiring and training, includes payroll and benefits.
Production Module
Manages production information.
Procurement Module
Streamlines raw material procurement. Automates supplier selection, price negotiation, purchase orders, and invoicing.
Inventory Module
Manages raw material procurement through storage to finished product shipment.
Sales & Marketing Module
Tracks sales orders and planned deliveries.
Technical Modules
These are application platforms, like an OS for a laptop.
Technical modules integrate with functional modules and facilitate connections between different applications.
ERP - The Bottom Line?
80% of large/mid-sized companies worldwide use ERP systems. ERP software can integrate all processes needed to run a company. ERP solutions have evolved over years, with many now being web applications.