ERP SYSTEMS: DEFINITION AND FUNCTIONALITY

The acronym ERP stands for Enterprise Resource Planning. It is a management system that integrates all the relevant business processes of a company, including administration, accounting, supply of resources, production, logistics, purchases, sales and much more. This system allows you to control and manage all the organisational and operational flows of a company. An ERP is able to integrate all the business processes into a single system, thus allowing work to be optimised in terms of efficiency and profitability. With a classic management system every single sector of the company works independently, with ERPs it creates a sort of IT interconnection between all the sectors.

HOW DOES AN ERP SYSTEM WORK?

The fundamental principle of the ERP systems is the centralised collection of data from multiple departments and company activities. In this way, the problem of duplication and misalignment of data is eliminated and the company can count on a single and complete database, capable of updating itself in real time whenever a user of any department and hierarchical level performs an operation within the system.

In general, an ERP system is divided into suites, modules and functions:

  • The suite is the ERP management global structure: the information system composed of the modules selected and configured according to the specific needs of the company;
  • The modules are the different software applications that manage a specific business process: accounting, production, warehouse, purchases, sales, etc;
  • The functions are the individual operations that the users can perform within each module and correspond to the different activities that each company department must perform.

IN-CLOUD ERP

When an ERP system is received “in service” in the cloud, it runs on a network of remote servers, rather than within a corporate server room. The cloud service provider adjusts, manages and updates the software several times a year, instead of applying an expensive update every 5-10 years (or more) locally. The cloud offers significant advantages, in fact, it is able to reduce operating and capital costs, eliminating the need to purchase any software and hardware or to hire additional IT personnel. These resources can rather be invested in new business opportunities and the organisation is always updated on the most recent ERP software. Employees can focus on more valuable activities, such as innovation and growth, and spend less time on IT management.

THE ADVANTAGES OF AN ERP SYSTEM

It is impossible to ignore the impact of ERP in today’s business world. Since data and business processes are integrated into ERP systems, companies can align the different departments and workflows, with significant savings in terms of profits. Examples of business advantages include:

  • Better efficiency of managerial structure and processes;
  • Lower operating costs through simplified business processes and best practices;
  • Increased collaboration between the users who share data in contracts, requests and purchase orders;
  • Better efficiency of the activity flow obtained by minimising the number of operations required for each task and standardising their duration;
  • Single database to work on even in the case of multinational companies or companies with different locations;
  • Risk reduction, through greater data integrity and financial controls;
  • Lower management and operating costs through uniform and integrated systems;
  • Better allocation of human resources through the evaluation of personnel based on specific and measurable results.

The implementation of an ERP management system is now crucial for every large company that wants to be competitive and wants to develop its business properly. The positive aspect of adopting an ERP system is not only related to the speed of communication between the company departments (that visibly improves), but rather linked to the quality of these communications. Targeted, rapid and effective.

To learn more about the business solutions offered by HT Apps, like our management software JO Hall, please fill out the contact form and we will contact you shortly.

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