Enterprise Resource Planning (ERP) refers to software programs used by businesses to understand, automate and streamline operations. ERP applications allow management to integrate operations together in order to save money, improve communication, increase data sharing and reduce unnecessary processes. Depending on the business division or department, professionals who use ERP software and principles may perform very different duties.

ERP Software Basics

The ERP phenomenon started in the 1990s in the manufacturing sector because production companies needed to share data with other departments. There are ERP applications and integrated ERP software suites available for businesses. Most ERP software solutions are scalable and flexible to meet the specific requirements of industries and companies. ERP programs help companies track data across all departments and functional areas.

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ERP functionality covers sales, accounting, marketing, purchasing, shipping, logistics, manufacturing, strategic planning and product design. ERP also covers payment, inventory, supply chain and customer relationship management. There different types of ERP systems. For instance, there are ERP programs that integrate data across all departments. Some of these comprehensive applications include SAP, Oracle and Microsoft Dynamics.

ERP Software Functionality

ERP software will usually offer standard solutions and functionality for specific departments. The accounting system will include payroll, ledgers and accounts receivable. Business intelligence functions will allow management to analyze data to make better and smarter decisions. Business intelligence includes data analytics, mining and reporting. A customer relationship management (CRM) system will be used to manage and track interactions with prospects, clients and partners. This function is primarily used by marketing, sales and customer service departments. Companies that don’t want to buy an expensive human resource information system (HRIS) can use the ERP’s HR function for employee evaluation, talent management and benefits administration. Inventory management functions will help companies track product numbers to maintain optimum stock levels.

ERP – Project Management

Project managers may use ERP technology to develop and optimize quality processes, customer requirements and productivity initiatives. For example, a project manager may be tasked with introducing new ERP software to departmental leaders in order to collect, sync and analyze data. These project managers may be required to cross functionally work with teams in different locations. They may work with IT, sales, operations, purchasing, marketing and customer service divisions in different states. These project managers would introduce and incorporate the ERP software into existing business applications. Before any work can be started, ERP project managers will analyze employee issues, system glitches and customer complaints to understand problems and implement improvements.

ERP – Finance

ERP systems may be used by accountants who work for global corporations. These accountants will provide advice, support and technical assistance for multinational organizations. They may use the ERP system to measure regional performance, assess the effects of policies on ROI and examine budget estimates, proposals and reviews. ERP systems help accountants to assess program tradeoffs, explore alternative funding ways and employ cost-benefit analyses and financial requests. Global companies need ERP systems to research and understand spending, economic and financial developments. Financial data produced from ERP systems may be used to develop guidelines and accounting policies that govern the formulation, maintenance and internal control of budgets.

Enterprise Resource Planning (ERP) software is a favorite among international supply chain managers who use it for cost reduction, mutual efficiencies, consistent high-quality and long-term business opportunities.