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What is an ERP program?

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An ERP program (Enterprise Resource Planning), abbreviated as ERP, is a system that helps manage an organisation, connecting the management of every part of the organisation together, based on the following ERP concept:

  1. Centralized Database — the ERP system brings all of the organisation’s data into one central place so that every employee can access the same data.
  2. Reduce Redundancy — the ERP system connects all work processes together, so that work continues without having to redo a process that has already been completed.
  3. Traceability and Accountability — the ERP system can store data so it can be traced back, with data that is correct and factual.
  4. Real Time — the ERP system displays data that is updated and current, so as to keep up with the situation in conducting business.

There are 8 core modules in an ERP system:

  1. Sales
  2. Purchase
  3. Account Payable
  4. Account Receivable
  5. General Ledger
  6. Inventory
  7. Material Requirements Planning
  8. Shop Floor Control

Once an organisation has implemented an ERP system, the benefits the organisation will gain are as follows:

  • Increased efficiency: the ERP system helps reduce the time taken for various operations within the organisation.
  • Better decision-making: the ERP system helps executives make more accurate decisions based on correct data.
  • Cost control: the ERP system helps control various costs, with reference to actual costs.
  • Adapting to change: the ERP system can adapt well to a changing business environment.

Conclusion

An ERP program is a system that manages an organisation so it can operate more efficiently, including connecting all of the organisation’s work processes together, for the organisation’s maximum business benefit.

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