What Are the Functions of an ERP System?

by Ray Jaeger ; Updated September 26, 2017
With ERP your business data is integrated and readily available.

An Enterprise Resource Planning (ERP) system is a purchased software platform that integrates multiple business functions so they operate collaboratively instead of independently. An ERP system is a foundation tool, providing management with panoramic visibility and control of all business activities.

Key ERP Features

An ERP system is software purchased by module or as a complete package. Some vendors specialize in a particular module, like manufacturing, and others, such as Oracle and SAP, offer an enterprise-wide set of modules. ERP modules are integrated via a unified single database that allows non-IT specialists, the primary users, to request and retrieve information on a near real-time basis.

Manufacturing Management

This module handles a product's life from inception, through station-to-station floor manufacturing, quality assurance, material resource planning and send-off to inventory.

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Financial Management

The financial module maintains not only the general ledger and accounts payable-receivable, but also amortizes fixed assets, does billing and manages assets.

Supply Chain Management

Typical duties of this module include order data entry, oversight of the order-to-fulfillment cycle, supplier chain planning and scheduling, and calculating sales commissions.

Other Modules

The customer relations management module administers sales and marketing, customer contact and after-sales customer support information. The human resources module maintains demographic, benefit, training, performance evaluation and payroll data for all hired personnel, such as employees, contractors and consultants. The data warehouse module is an information repository that customers, suppliers or employees can access for product or company information.

About the Author

Ray Jaeger has been publishing technical material supporting high-tech companies, from main frames to chip design verification software, for over 20 years. He also has taught composition and literary period/genre courses at the university level. He majored in English language and literature at Franklin and Marshall College and continued doing graduate work at the University of Michigan, earning Doctor of Philosophy candidacy in 1974.

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