What is ERP (Enterprise Resource Planning)?

ERP stands for Enterprise Resource Planning and refers to a type of software used to manage the day-to-day business activities of organizations. ERP helps organizations run the business process in areas such as accounting, purchasing, supply chain, risk management, and project management. It also houses Enterprise Performance Management, which helps to plan, forecast, budget, and report the results of an organization's financial processes. Enterprise Resource Planning is a system designed to use a business' resources efficiently and effectively. Although the concept of ERP was first used in production areas, today ERP systems are spread over wide areas.

A Brief History of ERP System

ERP, which means Enterprise Resource Planning, was not linked to other systems in the past but consisted of single packages. This results in expensive and complex codes being required as each system meets different business requirements. For this reason, business activities became inefficient as new technologies and processes slow down. Today, however, ERP software has become an information system for integrating all data and organizational processes at a single point.

A modern ERP software solution provides organizations with security, enhanced privacy, and distribution options, allowing them to personalize with little code usage. Helping organizations' desire to always improve and change themselves, the ERP system helps businesses to provide sustainability and resilience.

What are ERP Modules?

ERP modules show the business capabilities of an ERP system. These modules include many business processes such as purchasing, finance and accounting, human resources, demand planning, supply chain, and human resources.

Finance and Accounting:

The most important module of an ERP system is finance and accounting. The main purpose of the module is to facilitate the financial processes of enterprises, to provide real-time visibility of financial data, and to analyze financial processes end-to-end.

Procurement

The procurement module, also known as the purchasing module, enables businesses to source the materials they need during production. The purpose of the module is to track and analyse offers and automate purchasing processes. It enables the development of supplier relations.

Production

The production module, the so-called production execution system, is a must in an ERP system. The purpose of the module is to facilitate production planning and to secure the production process. The production module provides real-time data. Thus, businesses can see the status of ongoing or finished goods.

Sales

The main purpose of the sales module is to establish healthy communication with existing customers and potential customers. It provides insights to teams for processes such as increasing sales, offering customer-specific offers, and making data-driven decisions.

Customer Relationship Management

The CRM module stores all kinds of information about customers such as e-mails, purchase history, and calls, and enables businesses to better serve existing and potential customers.

Human Resources Management

The HRM module collects, stores, and protects all employee-related data.

What Does ERP (Enterprise Resource Planning) Do?

ERP is a structure that brings together software modules that enable the management of an organization's business process and activities under a single database. There are many independent applications within ERP software. Some of these applications are as follows:

• Budget Management
• Finance Management
• Production Management
• Business Mind

Businesses need to recognize and simplify their business processes before changing to ERP software. While ERP makes an organization's business process efficient, it also simplifies that process. In this way, it is seen that the costs of the organizations are reduced and time is saved. At the same time, ERP software integrates all departments of the enterprise under a single structure and achieves harmony between business processes. Thus, when a business comes to the decision-making stage, it can have an objective point of view and make the right decisions.

Sectors Using ERP Software System

Modern ERP systems benefit many areas of an organization. Here are some examples of how well-defined ERP systems make the common areas of the business more efficient and convenient:

Finance

By ensuring compliance with the business intelligence generated by well-defined ERP systems, profit is increased, errors are identified and duplications are eliminated.

Production

Enterprise Resource Management Systems that accelerate product delivery and production provide a unified solution for manufacturing. By monitoring, planning, and optimizing product manufacture and delivery, the benefits of ERP systems provide support from product to customer and at every level in between.

Retail

ERP systems provide a unified retail experience to create smooth and error-free transactions. Product information, stock, customer promotions, and sales data are centrally managed, making both in-store and online purchases more efficient.

Supply Chain

It increases visibility by supporting improvement and makes the supply chain more efficient from sales to fulfillment. ERP systems help you optimize logistics in production facilities, warehouses, facilities, and transportation.

Human Resources

Human capital management systems that provide centralized data on a single platform are often integrated with ERP systems. Benefits management enables employee success through absenteeism and leave management, options to attract and hire top talent, and tools used to ensure compliance.

Why is ERP Important?

ERP technology brings all business processes together and provides integration. By making business operations sustainable, facilitates access to needed information and provides dominance of compatibility between operations. There are some advantages that ERP provides to improve institutions. Let's examine together what is ERP, its importance, and its advantages for companies.

Maximizes Efficiency

Enterprise Resource Planning helps to maximize efficiency by improving operational performance in the future by accelerating the decision-making process with the solutions it offers. In this way, organizations can achieve the best performance by discovering new ways to streamline business processes with ERP technology. 

Accelerates Business Processes 

ERP systems provide the connection by acting as a bridge between transactions. This link between processes and data offers employees flexibility and visibility. Thanks to these features, employees take action quickly, accelerating the operational impact across the organization and maximizing the business process. Thus, business operations are accelerated while employees provide more value to organizations.

Need-Oriented ERP Solution

Enterprise Resource Planning software is adapted to the needs of organizations and contributes to growth. In this way, it quickly responds to any operational disruption or changes. In addition, need-oriented ERP solutions provide corporate agility and improve institutions. 

Benefits of ERP Software

Increased Productivity

ERP applications facilitate business processes by automating them. It enables all employees across the enterprise to work much more efficiently with fewer resources.

Fast Reporting

With ERP solutions, you can speed up your financial reporting and easily share the results with the relevant people. You have real-time data between different departments and make informed decisions.

Simplified IT

Using integrated ERP systems that share a database helps you simplify the IT environment. The working environment becomes easier and more efficient for all employees.

Increased Agility

By accessing real-time data, you can make your operations more efficient, seize new opportunities and make informed decisions.

What Should You Consider When Choosing an ERP Vendor?

• The ERP system should be scalable as the business grows or shrinks, that is, as the needs of the business change.
• The ERP solution must be customizable. Thus, you can create customizable workflows, forms, reports, and fields to adapt to your business processes.
• The ER system should seamlessly integrate with the existing systems you use. For example, e-commerce platforms, CRM, and business intelligence tools should be able to communicate with your ERP software.
• ERP software should have a user-friendly interface.
• Mobile accessibility offers more flexible working. It helps you do important work and access the information you need.
• The ERP solution should have data security and compliance features. Strong security measures, access controls, and encryption capabilities are very important to protect your data.
• Consider the support and maintenance services of the ERP vendor. Software updates, technical support, etc. are very important.

Frequently Asked Questions About ERP