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Importance of erp systems

Zelenina E.S.- student, Ermolaeva L.D. - supervisor

Vladimir State University

Vladimir, Russia

Annotation

The article concerns the benefits and intended uses of ERP platforms for enterprises. The basic concepts and principles of ERP are also considered.

Key words: ERP, financial management, enterprise, data, product, software.

ERP (English abbreviation of the words Enterprise Resource Planning, translated as - "enterprise resource planning") is a systematic and organizational strategy for combining various types of production process and its management, such as asset management of production, financial operations, human resource management, and organization of financial management. At the same time this process is focused on the constant balancing and maximum optimization of all possible resources of a given enterprise with the help of a specially developed common chum programs of application software that can create and display a common model and all the necessary processes for all areas of activity of the enterprise on which the system was used. [1][2]

In Russia, ERP is used in almost every large enterprise. The most popular systems are shown in Figure 1. [5]

Figure 1 The most frequently implemented ERP-platform in Russia

ERP- system is a definite software package that optimizes and helps to implement the overall strategy of ERP.

The basic principles of ERP

If we take the main characteristic feature of an ERP strategy, then it is necessary, first of all, to note the possibility of a basic approach to using a single model of the transaction system, which can be applied to the main volumes of operations and all current business processes occurring in the organization. Moreover, these systems can be applicable for any functional and territorial disunity of the processes taking place in production or other processes, regardless of the cause of their origin. The system makes it possible to integrate the data of all performed operations into a common information base for subsequent system processing and obtaining results in real time as well as for highlighting balanced plans. [2]

ERP is primarily an information system that allows you to store and process most of the critical data for operation.

What is critical data? And why do I say “most”? The fact is that some ERP systems have a “Production” module, herewith it is a separate software product that is not connected by default to other systems and units. Other systems attempt to combine all possible processes necessary for the work of the company. Can different types of ERP be considered useful? Naturally, below I will focus on this issue in more details. Now back to the terms. [4]

• Critical data - this is a list of data, without which the work of the companywould be impossible. These data relate to sales department operation as well as production department (if the company is a manufacturer). Some companies use ERP primarily for production management, as there is no the best solutions for production. Other companies are not manufacturers, for example, distributors, but also successfully apply ERP. Distribution, personnel management, sales of goods and services are becoming critically important for them.

• Most data: this is a list of processes and information that is optimal for eachparticular company. Of course, it would be ideal to collect all the data and information about all the processes. But this leads to higher costs of implementation. To avoid extra costs business management, along with the implementation experts choose a certain compromise solution, in which the ERP system gathers the information and processes that are necessary for operational control and making management decisions, but part of the data and processes are collected in specialized systems, which the manager uses as needed.

The list of critical data and the parts that need to be processed in the ERP system are calculated empirically for each specific business. ERP systems, and whether the cost of this type of business automation will be justified. [3]

What is ERP system used for?

enterprise resource planning control

The introduction of any ERP-system allows you to get the main advantages and characteristics. Who needs the implementation of ERP and why, let's consider in more detail.

The principles of a single database are control, management, accuracy and efficiency.

To understand these principles, let's imagine the company before and after the implementation of ERP. For example, an organization has its own production. Most likely, accounting for production is conducted in Excel spreadsheets or in a specialized program. Warehouse accounting works in its own accounting system, accounting department- in accounting software. Data transfer from department to department is made in the form of paper documents, and even verbally, after which it is manually entered into the necessary accounting system.

Such an approach strongly depends on the human factor, as a result, the information comes with delays, often significant. There are frequent distortions and errors, and in some cases, some data do not enter the system at all due to human factors leading to malfunctions, the need for regular reconciliations, etc. Moreover, any mistake and subsequent correction can result in significant losses. For example, an error in the code or size when transferring data from the design department to production ends sometimes very sadly, since the result is not what was ordered and designed.

In the case of implementing the ERP system, a single database into which all information used by different departments is collected is created. In this case, the percentage of errors is significantly reduced, since the data is entered into the system once by a specialist, and then read automatically by all departments in the necessary format and encoding.

In addition, the data transfer rate when using a single database becomes instantaneous, i.e. immediately after the designers or sales specialists have placed an order in the database, they see it in the design department or in production department. Also, the payment mark appears on the order immediately after the accounting department receives information from the bank. The number of errors related to the human factor decreases, and those that do occur are eliminated much faster.

In view of the above the ERP system is necessary for companies for which the speed and accuracy of data transfer between departments is a critical factor.

Bibliography

1. The Gartner Glossary of Information Technology Acronyms and Terms(pdf). Gartner (2004).

2. wikipedia.org

3. https://habr.com

4. Hamilton, Scott. Maximizing your ERP system: a practical guide formanagers

5. http://www.cnews.ru/news/line/

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