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Enterprise resource planning (ERP) is business management software—typically a suite of integrated applications—that a company can use to collect, store, manage and interpret data from many business activities, including: Product planning, cost. Manufacturing or service delivery. Marketing and sales.
Integration across all business processes - To realize the full benefits of an ERP system it should be fully integrated into all aspects of your business from the customer facing front end, through planning and scheduling, to the production and distribution of the products you make.
Automation enhances productivity - By automating aspects of business processes, ERP makes them more efficient, less prone to error, and faster. It also frees up people from mundane tasks such as balancing data.
Increase overall performance - By integrating disparate business processes, ERP ensures coherence and avoids duplication, discontinuity, and people working at cross purposes, in different parts of the organization. The cumulative positive effect when business processes integrate well is overall superior performance by the organization.
An ERP system covers the following common functional areas. In many ERP systems these are called and grouped together as ERP modules:
Financial accounting: General ledger, fixed asset, payables including vouchering, matching and payment, receivables cash application and collections, cash management, financial consolidation
Management accounting: Budgeting, costing, cost management, activity based costing
Human resources: Recruiting, training, rostering, payroll, benefits, 401K, diversity management, retirement, separation
Manufacturing: Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management