ERP (Enterprise resource planning systems) is a type of multi-functional, multi-department management software solution that can be used by an enterprise or an organization to collect, store, manage and analyze data. data from its business, including product planning, costs, production or service provision, marketing and sales, delivery and payment.
The definition sounds very simple and precise. However, ERP is not that simple. Through this article, we together learn and answer questions related to ERP system for business in detail.
What is ERP system?
First, let’s take a quick look at the history of ERP systems. It can be said that ERP was born thanks to the development from a production resource planning (MRP) and computer integrated manufacturing (CIM) application and comprehensively developed into an ERP system; The word ERP first appeared in 1990 when Gartner Corporation used it to extend to MRP.
By the mid-1990s, ERP was being applied to almost every part of a business, not just the manufacturing side. Government agencies and NGOs are also starting to adopt ERP. Around 2000, the term “ERP II” appeared and was used to refer to ERP software that was able to use a web interface to access and use. ERP II allows not only the company itself but also customers and supply chain partners to see the information. In other words, this new generation of ERP supports cooperation between companies, not just internal management.
History of ERP System Development
As we now see; Usually in Vietnamese businesses today, each department will use a different type of software. When using individual software as in the traditional way, it is difficult to connect data together, especially when the volume of data is large or the software of each department is not compatible with each other, so the coordination between multiple departments of a company becomes difficult, expensive and time consuming.
With an ERP system, it is possible to integrate information from all departments and functions across an enterprise into a single system that can serve the individual and diverse needs of different departments. It caters to the needs of HR, finance, warehouse, supply and any other different departments that the business process needs to have. While every department in any company has software that is optimized and meets the needs of that particular department, ERP has the role of fully aggregating and providing information that a system of a particular department cannot do. ERP can be seen as a bridge in providing information and integrating processes to enhance functionality in the most efficient way of all operations. ERP implementation is sure to make a big difference for most organizations and with a small investment. However, when implementing an ERP system, businesses will see the full effect through the results that ERP can bring to their businesses such as increased labor productivity, time and cost savings, increased productivity, and increased productivity. revenue and profit.
And a special thing in large business models like corporations, the use of ERP system will make it easier to manage subsidiaries with many different fields. Because ERP is not merely an independent system of one company, it can connect many data of many different companies of a corporation or improve the need for B2B information sharing today. .
What does an ERP system do?
The ERP system will perform the full range of functions in your business operations, which may have previously been performed by many smaller stand-alone software.
Components of an ERP solution:
An ERP system integrates many applications and business operations allowing the system to cater to most processes and departments if not all. We have taken the liberty of listing the important functional modules of the ERP software. Although it must be made clear, this is by no means a comprehensive list and that the reach of ERP in any organization extends far beyond these critical areas depending on the type of structure.
Accounting and Finance
Accounts can receive
Trial Balance and Financial Statements
Cash management and forecasting
Production and distribution
Buy, track and sell, inventory shipments
Tracked by Lot number and Serial
Quality inspection follow-up
Warehouse management function
Delivery tracking, delivery coordination
Track labor, investment costs and other production costs
Provide total cost of production
Create an order
Follow-up and supervision of after-sales service for products in the field
Product Lifetime Costing has become a standard function in current ERP solutions.