FAQ About Enterprise Resource Planning

Enterprise Resource Planning
one year ago | gizem

How does ERP software work?

ERP software works by centralizing and integrating various business processes and data from different departments within an organization. It uses a common database and a unified platform to ensure that all the information is up-to-date and accessible to authorized users in real-time. Here's a step-by-step explanation of how ERP software works:

  • Data Collection: ERP software gathers data from various sources within the organization, such as finance, human resources, sales, manufacturing, procurement, and more. This data collection can include transactions, inventory levels, employee records, customer information, supplier details, and more.
  • Data Integration: The collected data is then integrated into a single, central database. This integration eliminates data silos, ensuring that all relevant departments have access to the same up-to-date information.
  • Process Automation: ERP systems automate routine and repetitive tasks, reducing the need for manual intervention. This automation streamlines workflows and reduces the chances of errors or delays in data processing.
  • Real-time Information: Since all data is stored in a centralized database, any update or change made in one department is reflected throughout the entire system in real-time. This ensures that all users have access to the most current information.
  • Cross-Functional Visibility: ERP software provides cross-functional visibility, allowing different departments to access data from other areas of the organization. For example, the finance team can view sales data, and the sales team can track inventory levels.
  • Reporting and Analytics: ERP systems often include reporting and analytics tools to help users gain insights from the collected data. Users can generate various reports, dashboards, and charts to analyze performance, identify trends, and make informed decisions.
  • Customization and Configuration: ERP software can be customized and configured to meet the specific needs of the organization. Different modules can be activated or deactivated based on the organization's requirements.
  • Security and Access Control: ERP systems incorporate robust security measures to protect sensitive data from unauthorized access. Access to certain data and functionalities is restricted based on user roles and permissions.
  • Scalability: ERP software is designed to accommodate the growth of an organization. As the business expands or evolves, the ERP system can be scaled up to handle increased data and user demands.
  • Integration with External Systems: ERP systems can integrate with other external systems, such as customer relationship management (CRM), supply chain management (SCM), or business intelligence (BI) tools, to further enhance organizational capabilities.