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What is ERP and How Does It Work? A Simple Guide
Are you wondering “What is ERP and how does it work?” If so, you should check out our guide here to learn more about Enterprise Resource Planning.
It’s no secret that technology has touched every facet of a business’s operations.
In the modern world, most companies rely on various software systems in order to keep their daily operations up and running.
In this article, we’ll take a look at one of the most powerful business software options on the market: enterprise resource planning.
You’ll learn the answers to the questions of “What is ERP and how does it work?”.
Contents
What Is ERP and How Does It Work?
Enterprise resource planning is a bit of a complicated name. It doesn’t shed too much clarity on what the actual purpose of an ERP tool is.
One of the reasons why it’s hard for the name of the tool to peg exactly what it does is because the functions of an ERP tool are not set in stone.
Indeed, the tool is so versatile that it could mean one thing for your business and something completely different for another.
It all depends on what features of the ERP tool that you use.
But as a general rule, ERP tools have to do with the management and optimization of your business’s resources.
What resources are referred to specifically depends on what functions of the software you want to take advantage of.
What Functions Does ERP House?
One of the many functions of an ERP tool is financial management. With the right software, you can manage all of your financial needs right from your ERP.
This includes building accounting statements, recording expenses, documenting journal entries, and compiling financial metrics for shareholders.
If you’re a manufacturing company, then one of the potential functions of ERP for you could be inventory management.
You need to track how much product you’re creating and how much you’re delivering every day.
There’s an ERP system that exists to house that information as well.
Yet another purpose of ERP could be project management.
If you’re a contractor trying to meet project deadlines, then the scheduling functionality of an ERP tool could be exactly what you need to better satisfy clients. View this link to learn more.
The main concept behind ERP is that it houses all of these systems under one umbrella.
Instead of you having to waste time toggling back and forth between different systems and transferring data from one digital warehouse to another, you can do all of your day’s work out of one system.
There is great value in that. Not only do you optimize on your time, but you can also build better security measures for your data since you only have to build firewalls around one software instead of a full stack of different technologies.
Does Your Business Need ERP?
Now that you know the answer to “What is ERP and how does it work?”, all that remains is for you to decide whether your business needs ERP.
If you wish to optimize the use and management of your resources while improving efficiency and security, the answer is certainly a resounding yes!
For more business advice, check out the rest of the articles on the website!
