What is ERP?
Heard about ERP but don’t know what it is? ERP actually stands for enterprise resource planning. In a nutshell, ERP pertains to any business management software that allows an organization to use a system of integrated applications to manage the business and automate back office functions such as accounting, inventory and order management, services, and human resources, among others. Unlike point solutions (which small to mid-sized companies traditionally use), ERP focuses on not just one business process. Some examples of point solutions are accounting systems which automates only your financial and accounting transactions or warehouse management systems which manages only your inventory and inventory processes. The scope of ERP covers far more than just accounting or inventory or both. An ERP system, in fact, covers most if not all of the various processes essential in running a business. Check this brief overview on ERP video.
Common ERP Functions
Although the main function of any ERP system is to automate business processes and integrate them with one another, different ERP systems will have different set of functionalities. However, these are the must-have processes inside any ERP system:
- Accounting and Financials – Handle all your financial transactions, manage budget creation,allocation, and distribution, track all banking processes, and provide easy-to- use financial reports
- Sales and Customer Relationship Management (CRM) – Manage the entire sales process through different sales stages, generate price quotes, enter customer orders, set up deliveries, update stock levels, report on customers’ current balances, and manage all billing and accounts receivables
- Purchasing and Operations – Manage and maintain your vendor contracts and transactions, including the issue of purchase orders, updates to stock quantities, calculations for the value of imported items, returns and credits, and payment processing
- Inventory and Distribution – Handle inventory levels, item management, price lists, special price agreements, transfers between warehouses, and stock transactions — all via integration with other processes like sales and purchasing
- Human Resources and Administration – Capture pertinent information about each employee so you have one place to maintain and manage your employee records and data
The Value of ERP System to Your Business
Here are some key benefits that having an ERP system brings:
- Standardized business processes – Most ERP systems are built around standard processes basedon industry best practices. Companies may adhere to these processes which are time-tested and proven to deliver the best results.
- Improved regulatory compliance – ERP systems are built so that companies can enforce compliance with regulatory standards (such as the Philippine Accounting and Financial Reporting Standards and BIR Revenue Regulations 09-2009). You may also read our article on Compliance with RR 09-2009 (link to BIR Compliant Accounting System blog article).
- Lower cost of doing business – With just a single system and source of data across multiple departments, companies can eliminate redundant processes and systems and minimize errors, both of which are indispensable to lowering costs.
- Enhanced productivity – By automating business processes, companies are set loose to innovate instead of taking a lot of time doing mundane tasks. With ERP, more work gets done in lesser amount of time.
More and more companies are already reaping the benefits of ERP software now. When will you?
The ERP System that Fits Your Business
No two companies are ever alike. Companies are of different sizes, do different processes, and belong to different industries. No single solution fits all the requirements of various companies. It is with this reason that AGS partnered with not just one but some of the world’s top ERP providers to reach out to more companies and help them address their business pain points. Identifying which ERP offering best fits your business is no simple exercise. It takes a deeper understanding of how you do your business today and how you envision it in the future for us to come up with the best recommendation. We usually do this through a series of scoping sessions – sit-down discussions with your team to gather all your requirements.