What are the Main Characteristics of ERP System?

Enterprise Resource Planning (ERP) systems integrate all your business operations into a single, centralized system and meet the challenges of the fast-paced IT world. By developing an ERP solution, you can work to scale your business. However, selecting the right ERP solution for your business requirements is tricky business.

With so many types of ERP systems entering the market and striving to become more and more inclusive so they can fit in multiple niches, that range from finances to customer relationship management to human resource management, the selection process has become very difficult. 

Some important factors to consider while on the hunt for the right ERP solution fit for your company are the ERP goals and requirements of your organization, and the basic characteristics, ERP features and benefits of a particular software. Therefore, while browsing through ERP options, you must carefully analyze each option over these lines. Once you’ve selected an ERP software, you must carefully implement it and use it for optimizing your business operations.  

With the correct ERP implementation and usage, irrespective of the size of your business organization, you can greatly benefit from it. With lower costs of such applications these days, cloud backup and data security, the ERP benefits are undeniable and more and more companies are choosing to undertake an ERP implementation. 

Moreover, a true ERP nullifies the concept of virtual, cross-departmental borders, by integrating all operation on one platform that is available for access to the whole staff. ERP provides an interface that notifies the employees of their tasks and enables them to cooperate with their colleagues. Through automation of business operations, ERP software makes them easier, faster, and less prone to human error.

You can set the ERP according to your business requirements and work on controlling and optimizing the following domains:  

• Budget Forecasts
• Employees and Staff
• Enterprise Resource Planning
• Finance
• Logistics
• Order Processing
• Production
• Project management 
• Procurement
• Remuneration

Business organizations in the manufacturing sector are using ERP systems as a necessity to maintain their position against competitors. If lately, you have been falling behind your business rivals, and haven’t been satisfied with the outputs of your business activities, are facing higher costs or deadstock, lesser profits and/or your organization is failing to meet production timelines, then these are symptoms that you too need to invest your resources into selecting and implementing an Enterprise Resource Planning system. ERP can be challenging to implement but the benefits far outweigh the time it takes to implement ERP when you take the time to vet systems and select the best one for your business.

Research studies show that owing to its availability in multiple languages and industries, ERP enables businesses to keep their competitive edge and survive in the rat race.  

The four main characteristics of an enterprise resource planning system are:

• Automated Information Generation

Business intelligence tools such as decision support tools, executive information systems, and easy warning systems etc. are provided with ERP systems. These BI tools enable data-driven decisions and facilitate businesses in their manufacturing processes and improve overall production outputs.

• Common Database

Implementation of a DBMS, better known as a centralized Database Management System, is an integral characteristic of advantageous ERP systems. All business data is entered in the software a single time, stored and utilized by employees in all departments simultaneously. This centralized data approach used in ERP helps in mitigating data-entry errors that are otherwise common in a distributed database.

• Flexibility of Database

Good ERP systems support connectivity to other business entities and allow organizations to evolve and adapt to the changing needs of the enterprise to support various stages of resource planning. With their open system architecture, ERPs enable the attachment or detachment of modules without affecting other modules.

• Modular Design

A range of distinct business modules are the essential part of an ERP system’s modular design. These modules include accounting, distribution, finances, and manufacturing among others, with each catering to the various departmental requirements. All these distinct modules are centralized in an ERP system to enable seamless data flow. This modular design comprising of separate modules operating in real time, allows operational transparency provided by the standard, centralized interface.

Now that you know what characteristics to look for while on the hunt for an ERP system, let’s look at how these main characteristics are advantageous for the manufacturing industry.  Benefits can vary by ERP vendor, so it's important that you compare multiple ERP vendors like SAP (like Oracle vs. SAP, SAP vs. ServiceNow, etc.)

• Customer Relationship Management

A successful implementation of an advantageous ERP system will both be noticed and appreciated by your customers. With easy access to centralized information, your employees will be able to focus on creating and maintaining relationships with the customers, thereby gaining their loyalty, and keeping their business through improved interactions. 

• Data Security

Data Security is one of the biggest ERP advantages. From customers’ order details to your finance reports, your ERP software is loaded with confidential information. By utilizing the option to limit data access and saving it on cloud, you can make it more secure. Enterprise leaders like SAP ERP tend to offer more security controls for business data protection and secure integration. 

• Enhanced Visibility

ERP ensure access to all business activities for all employees who are allowed access, thereby improving operational visibility, removing cross-departmental virtual borders and increasing productivity. Through better communication, your business will experience a consistent and improved workflow very soon after the ERP implementation.

• Flexible Modules

The flexibility of the modular design enables the implementation of multiple system parts to better cater to the requirements of the organization. You can choose and add only those modules that suit your business operations.  

• Increased Efficiency

By removing redundant tasks, your employees will be able to focus their resources onto improving the efficiency of the business operations. Better demand forecasting, digital tracking of items from production to delivery stage, and greater order accuracy will lead to higher profitability. 

• Unified Reporting System and Reduced IT Costs

By utilizing a single, unified platform and through the removal of redundant and unnecessary steps from your business operations, you will no longer need to use extra IT tools and software. This will lower the IT costs. 

Despite the many benefits of an ERP system, the best approach for a manufacturing facility for improving its operational transparency and efficiency would be to pair up an Advanced Planning and Scheduling software with its choice of Enterprise Resource Planning System.