Enterprise Resource planning Notes (Ch.1)

Chapter : 1

Enterprise Resource planning software: A core software used by companies to coordinate information in every area of the business. Which help to manage company wide business processes using a common database and shared management reported tools.

Functional areas:

  • Business activities are divided into different categories known as functional areas.
  • Most companies have four main functional areas of operations.

Business functions of different functional areas:

Marketing and sales:

  • Advertising and Marketing of product
  • Taking sales order
  • Customer support
  • Customer relationship management
  • Sales forecasting

Supply Chain management:

  • Purchasing goods and raw materials
  • Receiving goods and raw materials
  • Transportation and logistics
  • Scheduling production runs
  • Manufacturing goods
  • Plant maintenance

Accounting and finance:

  • Financial accounting
  • Cost allocation and control
  • Planning and budgeting
  • Cash-flow management

Human resources:

  • Recruiting and hiring
  • Training
  • Payroll
  • Benefits
  • Government compliance

Business process:

  • Collection of activities that takes one or more kinds of input and creates an output that is value to the customer.
  • Customer of a business process can be traditional external customer the person who buys the finish product or it may be internal customer such as a colleague in another department.
  • Business must always consider the customer’s viewpoint in any transaction. A successful customer interaction is one in which the customer is not required to interact with each business function involved in the process. Successful business managers view their business operations from the perspective of a satisfied customer.
  • For company to provide customer satisfaction, it must make sure that its functional areas of operation are integrated.
  • Information systems can be designed so that functional areas share data. These systems are called integrated information systems.
  • A functional area is served by an information system. Information system capture, process and store data to provide information needed for decision making.
  • Today business managers try to think in terms of business processes that integrate the functional areas thus promoting efficiency and competitiveness. An important aspect of this is the need to share information between functions and functional areas. ERP software provide this capability by using single common database.


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Akash Padhiyar

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