The importance of ERP Systems and their Components
Enterprise resource planning (ERP) is used by an organization to manage its business functions with a centralized and integrated system, creating efficient, accurate, and effective operations. With ERP all existing data are entered into one database so that all departments work with the same information. ERP can reduce the risk of misinformation, can adapt to dynamic market dynamics, increase the efficiency and productivity of the organization because the placement of data in one database allows more accurate information and an efficient work environment.
Typical component of an ERP systems:
1. Human Resources
With an ERP system, the Human Resource component becomes automatic. There is an integrated timer feature, pay workers per hour, automate payments including tax deductions and benefits, without having to enter timesheets manually.
2. Customer Relationship Management
Businesses will not survive without customer management, with ERP customer relationship management being able to track all customer and prospect data in an ERP solution. With that insightful information, it helps in optimizing the company’s marketing and sales efforts.
3. Business Intelligence
With this component, companies can collect, analyze data, and get actionable insights related to the company’s business processes, which are obtained in the form of reports.
4. Supply Chain Management
The existence of Supply Chain Management helps in optimizing the supply chain and collecting real-time data that makes it more effective and efficient. With real-time data,
it helps to fix problems as soon as possible and also helps in planning production against demand.
5. Inventory Management System
Inventory management system components aim to manage demand fulfillment and warehouse storage, this component can work together with supply chain management. With this component, it provides an automatic inventory tracking feature.
6. Financial Management
The Financial Management component relates to all other components because the business process must involve finance. This component stores and analyzes all financial data that occurs, which helps companies to find out about company expenses. By utilizing this data, it influences the process to maximize profits while reducing costs.
Closing
Information systems are very useful in organizations, not as a substitute for labor but as a facilitator. Information systems facilitate the workforce in operations to be effective and efficient, both in terms of time and cost. And produce productive, effective, and efficient productivity so that organizational goals are achieved.
Reference:
https://slideplayer.com/slide/13961782/ https://quizlet.com/147144650/is-book-ch-5-review-questions-flash-cards/#:~:text=Financial%20and%20asset%20management%20information%20systems%20are%20at%20the%20heart,the%20organization’s%20transactions%20and%20assets.&text=For%20example%2C%20exception%20reports%20are,including%20ones%20committed%20by%20employees. https://www.selecthub.com/enterprise-resource-planning/why-erp-systems-are-important/#:~:text=Enterprise%20resource%20planning%20(ERP)%20systems,parts%20of%20manufacturing%20and%20distribution. https://erpnews.com/6-main-erp-components/#:~:text=A%20customer%20relationship%20management%20(CRM,buyer%20histories%20of%20your%20customers