What is ERP Software System and How Does it Work

Understanding the Features of ERP Software System in Detail


With the expansion of business functions, every company needs a software solution that can manage its operations with a centralized system. This can be only done by having an advanced ERP system in place. Well, those who do not know what is ERP software system, must need to read this article in detail. It is basically a powerful platform that allows administrators to create, modify, monitor and delete different management functions that fall under the business domain. The system certainly offers indefinite management benefits while allowing administrators to create their own modules effortlessly. 

Those businesses that are still using the old school approach of spreadsheet management must need to optimize themselves using an ERP system. It is indeed a revolutionary platform that eases tons of management operations. Though the development of these software systems is costly, but they offer value for the money. Today, many businesses have already moved towards ERP solution to modernize their operations. They know that the resource management will always remain complicated, hence a software must be put in place to handle all these hassles on the fingertips.

This article will also look into the details of ERP software. It will let you know what is ERP software system and how does it work to manage different business functions. For beginners, this will definitely be a good read because it will help them to understand the core concept of ERP software.

Let’s first start from the basics understanding what is ERP software system and why businesses really need it.

What is ERP Software System?

ERP software system

ERP stands for Enterprise Resource Planning. It is a type of software system that helps organizations to manage all of their resources from one place. This brings a huge advantage to them in terms of adding, modifying and deleting different management functions just from a single platform. These systems store all the information inside a centralized database. Therefore, it becomes easy for the administrators to call and access those details on the go, that too without doing any manual programming.

Nowadays, many businesses are using ERP software systems to streamline their management hassles. They understand the challenges in handling different types of resources simultaneously. Hence, they are effectively easing out that job by using ERP software system in their offices. Those organizations that have got multiple branches, take software development services to deploy the ERP systems at their main headquarter. It provides them a centralized platform to control and manage resources of all the branches from a one single platform.

With the help of ERP systems, business administrators can compile all the data to take quick decisions. The data and information obtained through ERP systems can also be shared with all the departments to form a mutual consensus. This way every department can become interconnected, precisely by using information coming from a centralized database.

Why Businesses Need ERP Software?

The rising challenge of managing company resources is taking a lot of toll on many businesses. This is something that should be done internally rather than taking any business process outsourcing services. However, many companies often find it difficult due to not having any advanced system. This lack of technical expertise has failed many businesses, especially the ones that came as startups. It can be only handled by having an advanced system that can track and monitor every resource properly. That is where the need of ERP system arises.

It is certainly the best solution that allows companies to manage all of their internal resources easily. From generating reports to executing analytical operations, the ERP system fits best for all types of business functions. They are deployed as a complete package in the computer systems of Human Resource (HR) or Finance department. Most of the time, additional authorities are allotted to them to create, edit and manage different roles inside the ERP system. This makes them a center point in the overall ERP system where everything is given under their control.

What is Cloud ERP?

Cloud ERP system

Looking at the recent history of ERP software systems, we can see that it has only been opted by big businesses. This could be due to multiple reasons in which software costing is likely to be the biggest reason. However, this trend is now starting to change, thanks to the cloud ERP systems. It is basically an advanced version of ERP that runs on cloud network. Though it also offers similar resource management features, but its cost scalability makes it a better option than the conventional ERP software.

As we all know, cloud network gives huge liberty to the users to easily scale up or down their requirements. The cloud ERP also follows the same model in which companies are allowed to scale their ERP systems based on their needs. It is also beneficial in terms of reducing the dependency of on-site management. This means the cloud ERP are totally based on the cloud network, hence they do not depend on any physical machine or system whatsoever.

Comparatively, the cloud ERP systems run more fast as compared to the conventional software. That is because the infrastructure used in cloud network is more powerful. It cannot be compared to the systems that are deployed on on-site locations. This is also the core reason why many companies are now preferring to use cloud ERP systems to further modernize their resource management and planning effectively.

How Does ERP Software System Work?

The working process of ERP software system is quite simplistic. It is a platform that unifies all the company data into one place. Depending on the given roles, administrators can access this data fully or partially to perform different types of operations. They have the authority to create, edit and modify user roles within the ERP system as well. All of these tasks are done by accessing a dashboard where different platform functions are already defined.

Talking about the interconnectivity, all the company departments feed their data inside the ERP system. A particular representative or lead from each department is given the task to perform this job weekly or monthly. This sequence can change depending on the urgency to require company data. The ERP system then stores all this data inside a centralized database. This is where everything is stored, hence it is the responsibility of administrators to properly update and maintain the database to keep the ERP functions streamlined.

The major benefit of ERP system is that company leadership can always look into the system to check the performance of every department. They can do that by generating reports which are compiled from the data fed by various company departments. All of this can be done within just a few clicks, as ERP software system come up with several premade features.

Core ERP Modules

ERP modules

ERP software system is designed to perform different type of operations. It is scalable and flexible, made to benefit every type of company that is looking to automate its operations. Being a system administrator, you must need to know about different modules of ERP software system. These modules help to execute different tasks that fits best to the company’s functional requirements.

Here are some of the core ERP modules defined below.

Inventory Management System

Many companies prefer to build ERP software systems for inventory management. It is the common demand of different businesses due to facing lot of difficulties in the handling of inventory. They basically want a streamlined system where data can be stored and accessed efficiently. The ERP built for inventory management generally comes up with a dashboard where particular users can enter inventory data. It is then further compiled to generate reports to help business owners analyze the given metrics.

This type of ERP system is generally used by retail store companies. They regularly deal in purchasing products from the market, which is why they need to keep a proper record of all the data. This system comes very handy for them in terms of feeding and maintaining every data efficiently.

Warehouse and Shipment Management System

Those companies that are related to the warehousing and shipment industry also use ERP and SaaS software systems. These software products provide them great ease in managing the data of shipments and warehousing products. It could be said that ERP systems are most required by the cargo companies because they need to track and monitor every shipment data precisely. These companies generally do not outsource data entry services, hence these ERP systems comes very handy for them.

The cost of ERP system for warehousing and shipment management is relatively high. The reason is that these systems are quite advanced and they are specifically made according to the requirements of each company. Furthermore, many software companies provide maintenance support for these ERP systems, which is why their overall cost becomes a bit bigger.  

Procurement and Accounting System

ERP software system is also used for procurement and accounting services. It allows business administrators to keep track of everything that is being purchased or sold. Earlier, companies were used to enter all these data into spreadsheets. This was really a cumbersome process because it required hard manual data entry efforts. It used to take a lot of time, which is what something businesses were looking to square off.

With the help of ERP system, the feeding and management of every data became simplified for the procurement companies. It allowed them to enter every product name, vendor details and more others quickly into the system. This not only saved a lot of their time, but also plenty of hard efforts in the process. That is what makes the procurement and accounting module of ERP system very beneficial and handy for all the retail store companies.

Final Words

That concludes our entire article in which we have discussed what is ERP software system in detail. The main aim of this blog was to educate people about the core features of the ERP application. This will give them a better understanding how does ERP software system work and function in the real world. The development of the ERP software system is therefore a bit hard. It cannot be developed by a beginner software engineer, however an experienced professional would be able to create it perfectly.

If you are looking for a company that can help you to create quality ERP software systems, get in touch with us today. We have plenty of experience in developing ERP systems, precisely according to the requirements of every company.

Frequently Asked Questions (FAQs)

What is ERP software system?

Enterprise Resource Planning (ERP) is a software system that helps organizations to manage all the data and company resources from one place. It is a highly advanced software that makes data management easy for administrators.

How does ERP software system work?

The working process of ERP software system is very simple. It offers a streamlined process to store all the company data in one platform. The administrators are given the authority to collect and manage all data from the given modules in the system.

What is a cloud ERP?

A cloud ERP is a system that purely runs on cloud network. It is similar to the conventional ERP systems, however its features and functions can be scaled according to the given requirements.

How many types of modules an ERP system have?

ERP software systems are created with different modules. This is precisely done to cover the needs of every unique organization. Some of the popular ERP modules include inventory management, procurement and financing, production management and more others.

What are the benefits of ERP software system?

ERP software systems come up with different types of benefits. They offer great ease to the business administrators in terms of managing resources. Furthermore, they provide automated reports to better understand the data which is compiled in a meaningful format.