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ERP systems, or “enterprise resource planning” systems, are holistic computer programs designed to stitch all the actions of a corporation together using a centralised database. The idea is that a large organisation ru
ns the risk of duplicating its resource use, sometimes quite seriously, by simply not knowing that certain tasks have already been performed by other departments or offices.
The effects of non-ERP situations can vary. At best, they cost money that does not need to be spent. At worst, they can devalue the customer experience. For instance, when a customer is contacted by several different people within an organisation it do not just become poor use of resources, but it is also annoying for the end user, whose overall confidence in the brand diminishes as a result.
ERP systems are designed to stop this happening. Their actual architecture varies, both from supplier to supplier and from user to user. You can purchase different levels of ERP systems designed to cope with differing intensities of resource availability and use. Throughout all ERP systems, though, a few traits remain constant.
The primary trait associated with all resource planning and management, which is echoed in the ERP software used by large companies, is the early warning. Whenever a department uses resources that have already been used to perform the same task somewhere else, a warning message will appear designed to stop resource use duplication.
ERP systems also commonly have a simplified, identical look and feel across all departments. This makes it easier for individual members of an organisation to learn how to use different departmental parts of the system. So if you get transferred from one to the other, you find that you are still working in a familiar environment.
The overall purpose of ERP systems is to allow management to control the resources of a corporation in the most effective manner. To this end, some heavy duty reporting functions are required. Top ERP systems, designed to supply enterprise class resource management to multinational companies, are able to interrogate resource use data in hundreds of useful ways, allowing management to deliver coherent reports from which future resource use may be planned.
Commonly, ERP systems are split into a number of overall functions, within which you will find sub headed functions similar to the split-out within departments. The overall functions are roughly analogous to the main departments in a large organisation, while the split-out functions are designed to address specific tasks operating within each department.
Included in these functions, you may find both financial and management accounting, human resources, manufacture, supply chain, project management, customer relations management, data services, and overall access controls. Subheadings of these departments may include various ledgers and/or specific functions. For example, engineering and product life cycle management within the overall manufacturing category.
The type of ERP systems used by a business will be dictated by the nature of the business. That is to say, if you are building a product you will activate the manufacturing tab in your ERP, while if you are providing services you may be more interested in the CRM tab.
ERP systems help in proper usage of resources deciding which sort of resource is best suited to which action. It also identifies any duplication in the resource usage that prevents overuse of any resource.