Key ERP System Components: Finance, HR, Manufacturing & More
ERP System Components
An Enterprise is a group of people which has certain resources under its control to achieve its goals. It acts as a single entity. This single entity is different from the traditional approach. It is an integrated software that combines many small modules to become a large organization. These small modules are the components of ERP. It manages many fields like finances, manufacturing, customers, projects, and more. With ERP systems, we can adapt to changes, leading to improved and efficient operations.
The main components of an ERP system are:
1. Finance
It tracks all financial data, including accounts receivable, accounts payable, general ledger, costs, budgets, and forecasts. It helps to keep a record of cash flow, lower costs, increase profits, and ensure all bills are paid on time. The growing complexity of business makes it important to have a single system to manage all financial transactions and accounting for multiple business units or product lines.
2. Human Resources (HR)
This software handles all personnel-related tasks for managers and employees. Employees are crucial to any organization; without them, business would not exist. This component is responsible for automated payments to employees, tax payments, generating performance reports, attendance tracking, promotions, and deciding staff working and holiday hours.
Human Resources (HR)
3. Manufacturing and Logistics
This component manages planning, production, order taking, and product delivery. It provides a view of the demanded and achieved levels, which is important to check whether targets are being met. It provides stock summaries and production plans beneficial for the business, including production planning, order entry and processing, and warehouse management.
4. Supply Chain Management (SCM)
Supply chain management is a network of facilities that handle material procurement, transformation into intermediate and finished products, and distribution to customers. Planning, manufacturing, marketing, distribution, and purchasing organizations operate independently through a supply chain, each with its own goals and objectives.
5. Customer Relationship Management (CRM)
This component interacts with customers using data analysis to study large amounts of information. It targets the audience and observes what is beneficial for them. The component gathers customer data from multiple channels. CRM stores detailed information on overall purchase history, personal info, and purchasing behavior patterns. The benefit is keeping track of customer’s buyer history and suggesting additional purchases.