Introduction to ERP Software
Enterprise Resource Planning (ERP) is a software application that integrates internal and external management information athwart the entire organization, including manufacturing, finance/accounting, sales and service, customer relationship management, and alike. The ERP systems mechanize this activity with the help of an integrate software application with the key purpose of facilitating the flow of info between all business functions within the boundaries of the organization and administer the associations to external stakeholders.
Characteristics of ERP Software
The key characteristics generally featured by ERP systems include:
- An incorporated system which operates in real time (or next to real time), not relying upon periodic updates.
- A general database that supports all applications.
- A consistent look and feel right through each module.
- Installation of the system without convoluted application or data integration by the IT (Information Technology) department.
Components of ERP Software
The key components that form an integral part of the ERP software are as listed below:
- Workflow management
- Transactional database
- Messaging / chat / wiki
- Management portal / dashboard
- Document management
- Business intelligence system
- Customizable reporting
- External access via technology like web services
Modularity of ERP Software
A good number of systems are modular to allow automation of some functions rather than others. Some common modules, like accounting and finance, are accepted by almost all users while other modules like human resource management are not. Generally, the greater the modules elected, the greater are the integration benefits. However, higher costs, risks and changes are involved.
Implementation of ERP Software
The scope of ERP generally implies significant alterations to staff work processes and practices. By and large, there are three types of services available to help in implementation of such changes –consulting, customization, and support. The time involved in implementation depends upon the business size, number of modules, the scope of process changes, customization, and the readiness of the user to take the ownership for the project.
Benefits of ERP Software
The basic advantage of ERP software is that it helps save time and expense on integrating the myriad processes through which businesses operate. Moreover, it becomes easier to take quick and error free decisions as data becomes visible across the organization.
- Debt ratios
- Liquidity ratios
- Profitability ratios
- Asset management ratios
- Cash Flow Indicator Ratios
- Market value ratios
- Financial analysis
- Business Terms
- Financial education
- International Financial Reporting Standards (EU)
- IFRS Interpretations (EU)
- Financial software