ERP stands for Enterprise Resource Planning. As the name depicts, it is a type of software that helps in managing the resources of an enterprise such as accounting, project management, budget, forecasting, and supply chain operations. It acts as a single source for the flow of data for the organization. It helps in preventing data duplication and maintains the data integrity as it contains all the data of the company. Therefore it plays a critical role in the running of a company. It is a single software that contains all the core functionalities needed by the business.
ERP is a secure, up-to-date, centralized data repository, helps in aligning the workflow of all the business processes. It holds data that is used by all the people from different departments of the organization.
ERP is helpful in increasing the efficiency of the organization as it is useful to manage the day to day activities of small to big companies. The value of an ERP system can be explained in the form of the following points:
1. Low probability of risk - ERP system is designed to automate the workflow of business operations. Therefore it reduces the risk of human errors and helps in maintaining the error-free data.
2. Increase in efficiency - The system helps in accelerating the growth rate of the company, as it is responsible for handling all the core operations in an automated and secure manner.
3. Good business insights - The real-time data in the ERP, helps us in gaining better business insights as the data is up-to-date.
4. Cost-saving - It is a cost-saving system, as it would have cost much more for different software that manages and operates different business tasks. It is the jam-packed system that has low operational costs and has the capability of performing all the activities.
The functionalities of the ERP system is distributed into different modules. These are human resources, finanace, accounting, project management, manufacturing, supply chain operations and customer relationship management(CRM).
Different ERP softwares hold different modules according to the company's short-term and long-term goals.
The different types of ERP systems:
1. On-premise ERP system - is hosted on the organization premises, i.e within the organization's servers. The ownership of such a system lies completely within the company.
2. Cloud ERP system - is a SAAS(software as a service) web-based solution. It works according to the subscription package purchased. The company's data is stored in the cloud and business activities are carried through the internet.
3. Hybrid ERP system - is a combination of on-premise and cloud ERP systems. It provided integrated functionalities of both the systems. Hybrid software provides flexibility with respect to hosting and deployment options to the customer.
You might not be sure what type of ERP software you should choose for your company. We have brought up some basic points that will help you in solving this problem.