Enterprise resource planning (ERP) is business management software—typically a suite of integrated applications—that a company can use to collect, store, manage and interpret data from many business activities, including: Product planning, cost. Manufacturing or service delivery. Marketing and sales.
An enterprise resource planning (ERP) software package can dramatically improve the way a company runs its entire back office, enabling it to enhance planning, execution, management, and control of a wide range of critical processes. Most of the ERP software suites on the market today offer a wide variety of modules and applications that are designed to streamline and automate activities and tasks in virtually every back-office department, such as:
- Manufacturing
The manufacturing component of an ERP software package includes tools that enhance the entire end-to-end process of designing and building a product. It streamlines product design, engineering, and configuration; improves tracking and management of product parts; automates the scheduling of production activities; accelerates manufacturing; and improves quality assurance procedures. With ERP software and its manufacturing capabilities, businesses are empowered to create the best possible product in the most efficient and cost-effective manner.
- Supply Chain Management
An ERP software suite includes features to support improved inventory management, order management, purchasing and procurement, logistics, supply chain planning, return management, and incentive management, to help businesses more effectively coordinate and control their complex supply chain workflows and activities. With ERP software, companies can better manage all supply chain operations including the sourcing, acquisition, and storage of all raw materials, the scheduling and management of all work in process, and the warehousing and distribution of all finished goods.
- Financial Management
With ERP software, businesses can improve the accuracy and accessibility of vital financial data, while streamlining and automating routine, repetitive accounting processes such as budget creation, allocation, and management; cash flow analysis; accounts payable and receivable; management of capital equipment and other assets; performance management; and financial reporting.
The financial applications within most popular ERP software packages include functionality for general ledger, cash management, accounts payable and receivable, budget management, and fixed asset management.
- Project Management
Features for costing, billing and invoicing, time and expense tracking, resource allocation, and activity monitoring make it easier for project-based businesses to successfully initiate, plan, schedule, and execute their most important projects. ERP software, and its project management applications, deliver integrated management, communication, and control tools that facilitate more strategic project planning and more successful completion of all related tasks and activities.
- Human Capital Management/Human Resources
ERP software includes human capital management or human resources functionality that automates and enhances the entire employee lifecycle. With features to support hiring and staffing, payroll management, training and education, time and attendance tracking, performance and compensation management, and benefits administration, ERP software systems provide all the tools a company needs to minimize the administrative burden placed on HR teams. They also enable HR staff to more effectively manage their workforce, and help each and every employee reach their full potential.
Additionally, a data warehouse or an operational data store is commonly used with an ERP software solution for reporting and decision support purposes. This prevents the generation of reports and data analysis from negatively impacting the transactional database, and helps avoid performance issues in the production environment.
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