Enterprise Resource Planning and its Main Components
Enterprise resource planning (ERP) is the software packages, systems, etc. used by organizations to conduct their day to day business. It is a cross-functional software that handles all the process within the organization by integrating each part of the business.
The main components of ERP software are as follows:
Financial Management: A financial management system stores and analyses a company’s economic data. The data includes all the transactions like expenditure, tax management, balance sheet, budgeting, bank statements, payment receipts, etc. The system ensures the company meets all of its financial reporting and tax requirements. Analysis of all these data helps a business to understand the trends of their spending and make informed decisions.
Customer Relationship Management: Customer satisfaction is paramount for a business organization. CRM helps salespersons and marketing people to address a customer’s need and preferences better. Customer Relationship Management also helps to analyze a customer’s spending pattern which allows marketing teams to launch marketing campaigns according to a customer’s demand.
Business Intelligence: BI becomes indispensable for those organizations which rely on data and its analysis to conduct their business. The Business Intelligence component of ERP collects and analyses data which helps to gain insights to run a business. It also helps to monitor key performance indicators (KPI).
Supply-Chain Management: Being a system which mainly caters to manufacturing and distribution companies, Supply chain management becomes the critical component of ERP software. The Supply chain component can monitor demand, supply, manufacturing status, logistics and distribution in real time. The SCM component keeps track of a product for its entire life-cycle.
Human Resource: Employee satisfaction plays a pivotal role in making a business successful. The HR component of ERP helps to handle the employee management. It takes care of all the aspects from compensation to timekeeping.
Inventory Management System: IMS take care of all the orders and ensure its supply using the SCM component of The ERP software. It also keeps track of products available in the warehouse.