What is ERP?

All You Have to Know About ERP

It is known that the business and industry world uses various systems to manage and integrate business processes even before digital tools such as computers were discovered. If you want, let's take a brief look at how this process came to be before answering the question of what is ERP. In the early 1900s, Ford Whitman Harris developed a production management system with the method known as EOQ. This manual system, which was brought together with computers in the 1960s, is transformed into automatic systems called MRP in response to the needs of the rapidly growing industry. In the next three decades, enterprise resource planning systems begin to become more and more popular with the ever-evolving technology. By the 1990s, ERP was widely adopted as the system of the 21st century for managing business activities. In today's world, the relentless rise of the internet and the necessity of organizations to keep up with this digital world reveal cloud ERP systems. Now, let's look for answers to the questions of what is ERP, how to use it, what is it good for, what are the benefits.

What is ERP?

ERP stands for Enterprise Resource Planning. ERP, which is shown among the contemporary management practices of the 21st century, means managing the business processes of an organization together and in an integrated manner. ERP programs, on the other hand, refer to the software used to manage different businesses and activities, from supply chain to project management, from purchasing to accounting, from human resources management processes to customer relations, and to ensure the integration of these processes with each other.

ERP software, which was originally designed for manufacturing companies, has attracted the attention of many organizations serving in different sectors with its functionality today, and it has made companies often ask the question of what is an ERP system. ERP applications that offer flexible solutions and meet the diverse needs of an organization are used in many different sectors from energy to manufacturing, from education to financial services, from software and technology to healthcare, from media and publishing services to transportation and logistics services.

ERP software acts as the central nervous system of a business. Just as the sense organs in the human body send the senses they perceive to the brain, and the brain takes certain decisions and takes action with this data, here is an ERP program that covers all units and ecosystem of the business, where each employee in different units can manage their own operations, but data flows throughout the organization from start to finish. It is an information system in which the information created in a unit can be accessed and used efficiently by other units and it is transformed into reports that make it easier for managers to make predictions about the future and make decisions.

What Does ERP Do?

While Enterprise Resource Planning (ERP) was widely used by multinational manufacturing companies in the past, today it appears as an integrated system needed by companies of various sizes in different sectors. ERP is seen as an ideal software for managing and interpreting data from different departments in the organization with a single system. This causes not only international companies but also other organizations to come  the question of what is ERP and what is it for.

With the ERP system, the data flowing from the organization becomes more visible throughout the organization, making it easier to monitor, organize and manage the data. In this way, organizational managers can make strong decisions in a much shorter time. Expressed as the place where the heart of the organization beats by many experts, ERP systems make it possible to predict the wishes and expectations of users. ERP applications, which facilitate fast output and reporting, prevent data loss and automate many administrative and operational business processes of the enterprise.

What are the ERP Basic Principles?

Due to the structure of the ERP program, it may differ according to the company, the expectations of the organization as long as the organization owns it, and the sector in which the business operates.

However, we can list the basic principles of ERP systems as follows:

• ERP software has the option of being customized to meet the different needs of different sectors.
• It is system software with analysis and management functionality that allows real-time data access and data storage within the organization.
• ERP programs offer multi-language and currency support.
• It supports many unique sectors such as education, health, aviation, petroleum, chemistry, banking.
• It allows the central and coordinated management of the units of the organization located in different geographical areas, in the country or abroad, and all their functions.
• ERP appears as an application software rather than database management, an operating system, or middleware. This system works on a system architecture consisting of three pillars: application, server, and database.

How to Use ERP?

ERP systems address business processes in different parts of organizations and form a single whole. In this respect, some difficulties may be encountered during the installation and implementation phase of the system. In order to minimize the difficulties that may be encountered in the installation of ERP systems and the operation of the process, following certain basic principles during the installation process provides benefits for organizations to develop a healthy system.

Selection and training of the project team, needs analysis, system selection, system tests and corrections, user training and correct management of support processes facilitate the transition to the live use of the ERP system. Businesses can adopt the gradual transition method in order for the personnel to keep up with this new system, or they can run the old system and the ERP system simultaneously with the parallel use method for a while.

Why is ERP Necessary? What are the Advantages of ERP?

The constantly escalating competitive environment among businesses, the changes in the corporate governance approach that comes with digitalization, make integration with technological innovations and transition to contemporary management practices mandatory. This causes the question of what is ERP to come up again and again. In order for businesses to continue their existence in this strict competitive environment, it requires fast and correct decision making, maximizing their quality and efficiency, reducing their costs, and using their resources in the most effective and efficient way. ERP systems enable rapid decision making, planning and control activities, resource planning processes by using today's technologies, in the most effective and correct way. If we list the main benefits and advantages of the system;

• It ensures that the data flowing from different departments is synchronized.
• It facilitates the interaction with internal and external stakeholders with the standardization it provides within the institution and organization.
• One of the answers to the question of why ERP is needed will be low inventory costs, efficiencies in purchasing, and production costs. ERP systems increase profitability while reducing operational costs.
• It facilitates the traceability and controllability of the product from the raw material stage until it reaches the user.

How to Learn ERP?

Today, when ERP systems have become a field of expertise in their own right, it is of course very difficult for employees to use the system without receiving training on the ERP program. In this respect, many companies in our country and in the world increase the operation and efficiency of the system by providing orientation training to the people and units that will use this system before and after the installation of the ERP system. Today, the question of what is ERP software is addressed so much that there are many studies on ERP systems in the literature. When these studies are examined, it is seen that the training received before and after the installation of the ERP system ensures that the system is used more effectively and efficiently, while at the same time making a great contribution to the achievement of the installation goals of the system.

What is the Difference Between CRM and ERP?

CRM stands for Customer Relationship Management. As can be understood from this meaning, CRM enables communication with customers in an organization and allows the management of the customer relations process. ERP, on the other hand, is expressed as "Enterprise Resource Planning" as described above and refers to the software used to manage different businesses and activities, from supply chain to project management, from purchasing to accounting, from human resources management processes to customer relations, and to ensure the integration of these processes with each other. Although CRM is now an integral part of corporate processes and ERP in new generation ERP systems such as Workcube. ERP Solutions that are obsolete and eclectic do not perform all the operations in which the CRM system is carried out.

The digital transformation, which is advancing at a tremendous pace, and the increasingly competitive environment force companies to take advantage of technological opportunities in order to survive and develop. This makes ERP software investment inevitable. Considered one of the most important and innovative technological applications, ERP programs have a great impact on businesses and organizations around the world.

ERP applications, whose scope and functions are developing day by day, go beyond just managing an organization's internal resources such as financial, workforce, and physical assets in today's world. It becomes solutions that cover all the players and components in its ecosystem, perceive the customer, suppliers, dealers and business partners, social media, e-commerce, production machines, and IOT devices as a resource and manage them by bringing them together in a common information system. These systems, which form the basic informatics backbone of digital transformation, allow organizations to manage all processes within the business while maintaining the connection with their external stakeholders.

CONCLUSION

Although the concept of ERP has had definitions that express a narrower framework, we, as Workcube, have answered the question of what is ERP since the first day: “All information flowing in the whole of an organization and its ecosystem is fully integrated and with each other in 100% integrity and real-time recording and processing. ". Workcube does not limit the resource concept in the standard definition of ERP to finance, production, and human resources with the integrated functions and modules it offers. According to Workcube, an enterprise's customers, suppliers, dealers, project stakeholders, subcontractors, digital assets, physical assets, machines, sensors, even social media followers are all resources and must be managed holistically.

If you want to realize the benefits of ERP in your business and to realize your digital transformation at once, you can contact Workcube right away.