For those of you who are hearing this term for the first time, ERP is a system related to managing business or business data that is widely used by large and small companies. ERP systems are able to collect and organize key business information and help companies run effective and efficient operations. Most business people must be familiar with the term “ERP”, but not a few do not know the exact functions and benefits of this software for their business.
Understanding ERP System
Enterprise Resource Planning or ERP is the process of collecting and organizing business data through an integrated software suite. Basically, ERP is an application that automates business processes, controls, and collects input from various data. The data includes accounting, manufacturing, supply chain, sales, marketing and human resources (HR) data. Once information is compiled in a central database, a company’s superiors can figure out how to empower them.
Starting from analyzing various strategies, finding methods for process improvement, and generating efficiency improvements in order to achieve company goals. It also helps companies save costs and productivity because it takes less time to dig up the data they need. In layman’s terms, ERP is a system that facilitates company operations in every department. By using ERP, the company is able to increase the empowerment of business resources, both for production and staffing purposes.
Initially, ERP was applied to manufacturing, with the Economic Order Quantity (EOQ) model. The scheduling system used is still paper-based. Gradually, the system was replaced by the Material Resource Planning (MRP) system. MRP began to be developed in the 1960s which eventually became MRP II. Modern ERP began to be used in companies in the 1990s as software that is integrated with daily business operations. For further information you can check in this link sap integrated business planning malaysia.
Types of ERP Based on Implementation
There are several types of ERP based on usability or implementation in the company. Each type certainly has its own advantages and disadvantages. The following are several types of ERP systems, including:
- ERP On Premise
This is ERP software that is used directly in devices in the company. The system is designed for companies of all sizes, although it may be more suitable for small and medium-sized companies.
- Open Source ERP
As with other open source software, this type of ERP allows companies to inspect, modify, and improve ERP source code. With open source ERP, companies are able to customize applications to better suit the workplace.
- Cloud Based ERP
This type of ERP is available through Cloud hosting services. This option allows companies to access data in real-time as long as the company has internet access. Cloud-based ERP software is generally suitable for use in large companies.
- Hybrid ERP
This ERP is an enterprise resource planning system that combines on-premise and cloud-based deployment.
