Each business holds its objectives and goals, procedures, and requirements. Most importantly, the current businesses require innovative technologies with complete functions that fill the gap between business processes and folks. An organization has several departments and teams, in order to run them successfully; there should be an ERP system that supports them by coordinating all information and communication within the organization. An ERP system is a grouping of software, and the company’s activities carried out to accomplish various operations. An ERP software helps to adjust the entire project value chain and also simplifies the critical processes effectively and efficiently.
Presently, SAP ERP is one of the powerful Enterprise Resource Planning systems. SAP stands for Systems, Applications, and Products in the data processing. In the year 1972, Wellenreuther, Hopp, Hector, Plattner, and Tschira founded SAP software. SAP system includes various integrated modules, which covers almost all the feature of the business management. Since 2010, SAP has more than 140,000 installations globally, over 25 industry-specific business solutions, and more than seventy-five thousand customers in 120 countries.
Need of an ERP system
Well, any beginner who wants to make a career in SAP ERP is enthusiastic to know about the ERP system, and the very first question which arises to their mind is why an ERP system is required? To answer this question let us consider a scenario:
A customer wants to purchase a specific product. Thus, the contacts the sales department of an enterprise- the sales team’s links with the inventory team to check the product’s availability. But, unfortunately, that product is unavailable and the organization lose the sale. To make sure that this won’t rehash next time; the organizations are using ERP software. Let us see how an ERP system overcomes these issues. But before learning about ERP system let us understand how various departments are involved in the entire business process. The step by step procedure is mentioned below:
1. A customer approaches the sales department to check the product’s availability.
2. Then the sales teams link to the inventory department to check whether the particular product is available or not.
3. If the product is unavailable, the sales team connects to the production planning department and asks them to manufacture the product.
4. Next, the production planning team connects again with the inventory department to check the availability of raw material.
5. If the raw material is unavailable, the production planning team purchases it from the wholesalers.
6. Then the production planning team moves the raw materials to the shop floor execution for the creation of an actual product.
7. Once the product is ready, the shop floor team sends it to the sales team.
8. The sales team, in turn, delivers the specific product to the client.
9. Meanwhile, the sales team informs the finance department regarding the income generated by the sale of the product. Production planning team then update the finance team with payments to be done to different vendors for raw materials.
10. The HR department is also involved in the complete process to take care of any HR related issue.
This is the usual business process that any manufacturing company follows. Below are a few essential points that can be derived from the above scenario:
A company has different subdivisions or business units.
These subdivisions or business units communicate with each other continuously and exchange information with each other.
An organization becomes successful by communicating and transferring data within departments, as well as related third-party such as vendors, clients, etc.
The enterprise can be classified as a decentralized and centralized system as per the communication and data exchanged is accomplished.