What is an ERP system? The right company and everything you should know
What is an ERP system?
ERP (Enterprise Resource Planning) system is Computer systems used in businesses and organizations to manage and control the organization's various resources as an all-in-one system. This system helps in managing human resources, finance, purchasing, production, and warehousing. and all other business processes in a systematic and integrated manner across departments in the organization.
This makes it possible to track and control business processes effectively. And it is a system that helps organizations work more efficiently by reducing the use of resources and time for various operations, which helps in the development and sustainable growth of businesses in the long term.
ERP systems often have multiple modules designed to support individual business needs. such as warehouse management Accounting and Finance Production management Sales and marketing management and others related to business processes in the organization
What is the ERP system used for?
ERP (Enterprise Resource Planning) systems are used to do many things in an organization, including:
- Human resource management: ERP systems help in managing employee information such as personal information, work, finances, leave, and personnel development. Makes it possible to manage human resources in the organization effectively.
- Accounting and Finance: ERP systems help in managing the finances of an organization. Including income-expense accounts Daily finances, quotes and financial report summaries For accuracy and cost control.
- Production management: ERP system helps in planning and controlling the production process. Including warehouse management Ordering raw materials and product quality inspection.
- Warehouse management: ERP system helps in controlling product stock. Receive and pay products Ordering and storing products in inventory Makes it possible to reduce costs and increase efficiency in storing products.
- Sales and Marketing Management: ERP systems help manage customer information, orders, sales, marketing, and shipping planning. Makes it possible to increase sales and customer satisfaction.
- Including managing other business processes in the organization : such as project management Manage customer service and others according to the needs of the organization.
Including saving time and necessary resources. and helps in planning and making decisions with accurate and complete information in managing the organization.
What does the ERP system consist of?
An ERP (Enterprise Resource Planning) system consists of several modules that support the needs and processes of an organization. The main modules of the ERP system include:
1.Human Resources Management: Used to manage employee information such as personal information, work, finances, leave, and personnel development.
2. Accounting and Finance (Financial Accounting): Used to manage the organization's finances. Including income-expense accounts Daily finances, quotes and financial report summaries.
3.Production Management: Used to plan and control production processes. Including warehouse management Ordering raw materials and product quality inspection.
4. Warehouse management (Inventory Management): Used to control product stock Receiving and paying products Ordering and storing products in warehouse.
5.Sales and Marketing Management: Used to manage customer information, orders, sales, marketing, and product delivery planning.
6.Project Management: Used to plan and control various projects in the organization such as research and development projects. production project or customer service projects.
7.Customer Service Management: Used to manage customer service, such as contacting customers. Troubleshooting and tracking service status.
8.Delivery Management (Supply Chain Management): Used to manage the shipping process. Including planning and tracking the delivery of products to customers.
9. Reporting and Planning System (Reporting and Planning): Used to create business reports. and business planning.
10.After-Sales Service Management: Used to manage after-sales services such as maintenance, insurance services. and customer care after purchase.
ERP systems often have the ability to integrate data between different modules so that business data can be viewed in a consolidated view and updated at the same time across the organization.
Types of ERP systems
There are many types of ERP (Enterprise Resource Planning) systems, each of which can be modified and customized to suit the needs of the organization. Some ERP systems may have specific capabilities in certain areas. In general, ERP systems can be divided into the following categories:
1.On-Premises ERP:
This type of ERP system is installed and deployed on servers and inframe structures within the organization. The organization must take care of and maintain the server itself. They are often durable and cost-effective in the long run. But there is a cost to purchasing the software and it can be expensive to maintain.
2.Cloud ERP:
This type of ERP system is hosted on the cloud. This means that the software and data are stored in the ERP provider's data center and can be accessed over the internet. There is usually a monthly or annual fee. Flexibility and good security.
3.Open Source ERP:
This type of ERP system has free open source software and open source code for the public to download and customize according to the organization's needs. There are often costs for customization and maintenance.
4.Industry-Specific ERP:
This type of ERP system is developed to support businesses or industries that have special needs. Have specific abilities in one or more areas of the industry. This allows organizations to modify their ERP systems to suit their needs.
5.Small Business ERP:
This type of ERP system is designed to support small businesses and is simple. They are often affordable and small business friendly.
6.Enterprise ERP:
This type of ERP system is designed for large organizations. They often have extensive business capabilities and sophistication. Has the ability to customize and expand the organization in the future.
Difference between ERP and CRM
ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) are two systems used in organizations to increase efficiency in managing and managing resources and customers. But there are some differences as follows:
The main goals of ERP and CRM
:
- ERP (Enterprise Resource Planning): Focus on managing internal business resources This includes financial data management, production, warehousing. and human resource management In order for the organization to work efficiently.
- CRM (Customer Relationship Management): Focus on managing customer relationships This includes managing customer data. Customer contact, sales and customer service To increase customer satisfaction and durability.
Collected data of ERP and CRM:
- ERP: The ERP system collects information within an organization, such as financial, production, warehouse, and human resource information.
- CRM: CRM systems collect information about customers. This includes contact information. Purchase history and customer needs.
Use of ERP with CRM:
- ERP: Used in business processes within an organization to control and manage various resources in the organization.
- CRM: Used in the process of building and managing customer relationships to increase sales and customer satisfaction.
Related systems of ERP and CRM:
- ERP: It is often connected to the accounting system. Warehouse management system and human resource management system.
- CRM: It is often connected to the sales system. Customer service system and marketing systems.
Benefits of ERP vs. CRM:
- ERP: Helps reduce losses in business processes. Manage resources systematically and increase efficiency in production and distribution of products.
- CRM: Helps increase sales Create a perfect fit for customers and increase customer satisfaction.
Organizational use of ERP and CRM:
- ERP systems are often used by departments involved in production, finance, and resource management.
- CRM systems are often used by departments involved in sales, marketing, and customer service.
In summary, ERP and CRM are systems with different uses and goals. But able to work together to increase efficiency in managing the organization's business for the better.
Companies suitable for ERP systems
ERP (Enterprise Resource Planning) systems are suitable for companies with different work characteristics and business needs. Specifically, organizations that have the following characteristics:
1.Large companies:
ERP is suitable for large companies with diverse business resources. Including working in a wide scope, it helps to control and manage all integrated resources in the organization effectively.
2. Companies with complex business processes:
If the company has complex business processes, such as producing many types of products. Worldwide shipping or a trading process that has many steps, the ERP system will help to control and manage these processes systematically.
3. Companies that have a need to work together:
ERP helps companies work together more efficiently. By dividing data and system information efficiently Makes it possible to create better communication between departments and teams.
4. Companies with reporting and business planning needs:
ERP provides a quality reporting and business planning system. It helps in analyzing business data and making decisions in organizational management.
5. Companies that have expanded their organization:
If the company tends to expand, the ERP system is flexible and can be expanded and improved to accommodate the expansion of the organization.
6. Companies with high data security audits:
ERPs often have high-quality security systems. To protect important information of the organization This is important for companies with business information that must be kept confidential.
7. Companies that want to improve business processes:
ERP helps in improving business processes and increasing work efficiency. Allows the organization to increase productivity and reduce costs.
8. Companies that need human resource management:
ERP has a human resource management module that helps in managing employee information, leave and personnel development efficiently.
Using an ERP system will help companies manage resources and processes in the organization efficiently and systematically. But the business needs and maintenance of the system should be considered appropriately in the organization for effective use.
Ready-made ERP VS ERP created for business
Ready-made ERP (Enterprise Resource Planning) and ERP built for business (Custom ERP) are two forms of ERP systems that differ in some aspects as follows:
Availability ERP :
- Ready-made ERP: Ready-made ERP is usually software developed by the ERP manufacturing company and is available as standard. which can be used immediately after installation.
- ERP built for business: ERPs built for businesses often have to go through a process of development and customization for each organization. This may take more time and budget than a ready-made ERP.
ERP customization:
- Ready-made ERP: Ready-made ERPs often offer some degree of flexibility in customization to suit an organization's needs. But there are limitations to deeper customization.
- ERP built for business: An ERP built for business has the ability to be customized to suit every organization's needs. But it needs more development and improvement.
ERP value:
- Ready-made ERP: Ready-made ERPs often have a lower starting price than ERPs built for businesses. This is because needs are shared among many customers.
- ERP built for business: ERPs built for businesses tend to be more expensive than ready-made ERPs due to the increased budget required for development and customization.
Time to use ERP:
- Ready-made ERP: Can be used quickly after installation This helps in getting started quickly.
- ERP built for business: It takes time in the development and customization process. This may cause it to take longer to use.
ERP maintenance:
- Ready-made ERP: They are often maintained and upgraded by the ERP manufacturer, which reduces maintenance complexity.
- ERP built for business: Organizations will be responsible for maintaining and upgrading their own ERP, which may require more resources.
All in all, the difference between a ready-made ERP and an ERP built for businesses lies in their availability. Usage time Availability of customization, price and maintenance. Organizations should consider their own needs and budget to choose the most appropriate option for your business.
