ERP System: Definition, Function, and Types

understanding the erp system

What is an ERP system? Questions that often arise in today’s technology-based era. ERP software is handy for managing various activities within a company. Yes, companies that have started to develop should implement this system.

Managing a large-scale company requires a reliable method to handle a variety of needs. Because if it is done manually, the planning will be chaotic and not optimal.

Knowing what an ERP (Enterprise Resource Planning) system is, the meaning of ERP uses or functions to the type of ERP software commonly used by many large companies is necessary.

The benefit of an ERP system is that the activities in the company can be well structured. As well as record everything for future review. Therefore, let’s understand what ERP is so that we know the benefits thoroughly and deeply.

What is an ERP System?

In general, ERP stands for Enterprise Resource Planning; this system is commonly applied to planning various things in a company such as finance, logistics, human resources, time planning, payroll, and others.

With this understanding, it is undoubtedly understood what ERP is. Three elements exist in ERP, including Enterprise, Resource then Planning.

Meanwhile, the understanding of ERP is based on experts such as O’Brien, namely ERP is a software that has many integrated functions that are useful for managing manufacturing, finance, human resource distribution, and others so that the company is always consistently efficient, agile, and profitable.

Another question that is often asked by many people what is ERP software? ERP software is an Enterprise Resource Planning application. Usually, this software is website or desktop-based; both versions have their respective advantages.

The advantages of website-based ERP software include no need to install, can be accessed anywhere via a laptop, PC, or smartphone. At the same time, the benefits of desktop-based ERP software include good access speed and a better level of security.

ERP system has been known to various countries with advanced technology. So don’t hesitate to apply this system even though the company is just starting. If you have implemented a reliable system from the beginning, it will also be easier in the future.

ERP system functions

There are many uses or functions of ERP that are useful to help company mobilize. With the implementation of an ERP system, companies will find it easier to carry out decisions so that the results that they will obtain can be optimal.

1. Monitoring is easier

Of course, in a company, many things should be monitored, starting from finance, logistics, human resources, and many more. ERP plays a role to make it easier to monitor everything in the company. So when you are going to make a decision, you can observe the data in the system.

2. Integration

Another benefit of the ERP system is the ease of integration. They can connect various components within the company to make sure everything is synchronized.

3. Automatic

There is no need to doubt the sophistication of ERP software. One of them is for automation matters when carrying out various progress. The existence of automation will also make the data streamed to its destination faster.

4. Planning

ERP is indeed designed to make it easier for companies to carry out planning. This planning can be a strategy that they will use to develop even though competitors already exist.

Types of ERP Systems

Nowadays, there are various types of ERP systems commonly used by companies. Quality is the reason why ERP is widely applied now.

Know the type of ERP so that later you don’t choose the wrong system to be applied to your company.

1. SAP Business One

SAP Business One is widely recognized as a quality ERP system. This system was designed by Sapphire Systems, which is located in the UK.

2. Odoo ERP

This ERP system is also widely used by companies. One of the advantages is that it can manage all the administrative components of the company.

3. NetSuite ERP

They can run various modules such as warehouse management, production, procurement of goods to HR on this system.

Before deciding to use ERP software, first, observe the convenience aspect. So don’t just choose an ERP application. Because many offer this software at low prices but in terms of quality is lacking.

With the explanation above, you must understand what an ERP system is. This software does not only have to be used by large companies. By paying attention to its functions, various companies can apply this software, both small and large.

Adjust company needs with ERP software. Make sure the software used is designed to meet the company’s needs. It will be a shame if the modules contained in the software do not support all processes in the company.

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