Ad verbum, ERP is Enterprise Resource Planning (eng.) – i.e. techniques of effective planning and management of all resources of an enterprise which are required for carrying out sales, production, purchases and accounting to fulfil clients’ orders in the sectors of production, distribution and services. Thus, the ERP-system is a single information system for the administration of the work of an enterprise as a whole, with the diversity of its sections, with all their functions and features. Ideally, the ERP-system allows a manger to start-up an application and to get a “one-window” information on any aspect of the business, whether it be finance, personnel management or sales.
As a rule, the ERP-system consists of several functional modules, each of which is aimed at covering this or that sector of the enterprise activities (finance, assets management, enterprise cost and income accounting, management of materials used in various business transactions, distribution, sales, deliveries, information on sales of goods, works and services, human resources).
The ERP-system is based on the principle of creating a single data storage. This tool is used not only for collection of information in a single point from separate sources. Special technology of data allocation allows also to process information within minutes where a transaction ERP-system needs several hours to produce quarterly or annual reports. Besides, the storage provides its tool for building various analytical reporting, its interface is intuitive and simple in use that allows for company’s analysts to make their own reports not involving services of programmers.
Depending on the company’s size and type of software, the ERP-system can include modules for various sectors of work. For a small business enterprise its contains the accounting module, financial module, modules of sales, purchases, warehouse deliveries, stock data, production schedule planning and compiling, recording of finished products stock and its consumer movement. Large companies and small distributor companies can have separate systems of finished products warehouse management. Other organisations include in the system the engineering module, modules of quality control, main production equipment, personnel management as well as production safety control, working with customers, etc.
Every enterprise has its own model of business with specific features and business processes, and the ERP’s target is to unite all these processes and functions into an integrated system which can meet the needs of all staff members. However, the main dividends of the ERP-system introduction will be gained by the company’s top management who would have an access to any required accounting on all possible indicators of the enterprise work just in several seconds and with a couple of clicks of a mouse.
