ERP System
Term from the CRM Lexicon
Definition
ERP is the abbreviation for Enterprise Resource Planning. It is a type of software that connects different areas of a company and thereby optimizes business processes. An ERP software thus helps in planning, controlling, and managing processes and monitors them. An ERP software can, for example, map financial management, production, warehousing, and customer relationships. By using ERP software, companies can streamline their business processes and increase their efficiency. The predecessor of today's ERP was software for material requirements planning and for the timely completion of goods. Over time, more areas were added before a fully integrated ERP software finally emerged.
Which areas does ERP cover?
An ERP software is modular in design and divided into various areas: These include financial accounting, human resources, purchasing, marketing, CRM, sales, warehousing, production, and service management. All these areas are connected via a common, central database.
Goals
The main goal of an ERP system is the integration and optimization of all central business processes and company resources in a single, central software solution. This leads to higher efficiency, cost savings, improved transparency and data quality, better competitiveness, and the ability to make informed decisions based on current data.
- Increased efficiency
- Improved decision-making
- Enhanced competitiveness
- Reduction of errors
Functions
| Integration of all business processes | An ERP system connects various company departments, so that, for example, an order from sales directly flows into production and warehousing. | |
| Central Database | All relevant operational and company data is stored in one place, which reduces the need for multiple storage and data inconsistencies. | |
| Automation | Processes in areas such as finance, human resources, logistics, and production are automated and optimized, which increases efficiency. | |
| Reporting and Business Intelligence | Integrated functions for data analysis and reporting provide managers with an up-to-date and comprehensive view of the company's situation to make informed decisions. | |
| Modular Structure | ERP systems are often modular, allowing companies to add modules for finance, human resources, merchandise management, CRM (Customer Relationship Management), or production planning as needed. |