Process Of ERP Systems

Integration is Key to ERP

Integration is an extremely important part to ERP's. ERP's main goal is to integrate data and processes from all areas of an organization and unify it for easy access and work flow. ERP's usually accomplish integration by creating one single database that employs multiple software modules providing different areas of an organization with various business functions.

Although the ideal configuration would be one ERP system for an entire organization, many larger organizations usually create and ERP system and then build upon the system and external interface for other stand alone systems which might be more powerful and perform better in fulfilling an organizations needs. Usually this type of configuration can be time consuming and does require lots of labor hours.

The Ideal ERP System

An ideal ERP system is when a single database is utilized and contains all data for various software modules. These software modules can include:


  • Some of the functions include; engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.


  • Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.

Human Resources:

  • Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.


  • Costing, billing, activity management, time and expense, etc.

Customer Relationship Management:

  • sales and marketing, service, commissions, customer contact, calls center support, etc.

Data Warehouse:

  • Usually this is a module that can be accessed by an organizations customers, suppliers and employees.

ERP Improves Productivity

Before ERP systems, each department in an organization would most likely have their own computer system, data and database. Unfortunately, many of these systems would not be able to communicate with one another or need to store or rewrite data to make it possible for cross computer system communication. For instance, the financials of a company were on a separate computer system than the HR system, making it more intensive and complicated to process certain functions.

Once an ERP system is in place, usually all aspects of an organization can work in harmony instead of every single system needing to be compatible with each other. For large organizations, increased productivity and less types of software are a result.