The Role of ERP in Companies and How ERP Systems Create Business Unit Integration

ERP is a combination of three components: Enterprise (company/organization), Resource (resources), and Plan (plan). The most important requirement for an ERP system is integration. Integration means unifying diverse requirements in a single software within a logical database, making it easier for all departments to share information and communicate. SAP is the company with the largest market share in the world for ERP software. The implications of an ERP system depend on the size of the business, the scope of the transition, and customer engagement. Companies require consultation, customization, and support services.

Large companies both domestically and internationally use ERP, including ExxonMobil, BASF, British Petroleum, Chevron Texaco, Walmart, Cola-Cola, Hewlett Packard, Haliburton, Mitsui, Astra, Garuda, Pertamina, IndoMobil, Bank Berdikari, and others. The form of ERP for each company will vary depending on the company's needs and scope. Companies can create their own ERP, engage developers, or purchase ERP products prepared by companies such as Oracle, SAP, Microsoft, and others. Examples of ERP packages include SAP, Baan, Oracle, IFS, Peoplesoft, and JD.Edwards.

Understanding ERP according to several experts is as follows:

According to Daniel E. O' Leary in his book Enterprise Resource Planning Systems (Systems, Life Cycle, Electronic Commerce and Risk), ERP is a powerful software package that enables companies to integrate various separate functions.

According to James Hall in his book Accounting Information Systems (Book 1, Edition 13, Page 45), ERP is an information system model that enables companies to automate and integrate various company-specific business processes.

According to Ellen Monk and Bret Wagner in their book *Concepts in Enterprise Resource Planning* (Third Edition, Page 1), an ERP program is the core software a company uses to coordinate information across its business locations. ERP programs help manage a company's business processes across a single database and management reporting system.

From the opinion above, it can be said that ERP is an integrated mechanism for coordinating information and various business processes and business transaction processing modes that are integrated with activities in other business units within the organization.

According to O'Leary (2002), the ERP mechanism has several characteristics as follows:

ERP mechanisms are software packages created in a client-server environment, either traditional (desktop-based) or site-based.

• ERP mechanisms integrate most of the existing process efforts;
• ERP mechanism processes all business transactions of an organization's company;
• ERP mechanisms use enterprise ratio databases for data storage;
• ERP mechanisms allow users to connect to data in real time.

The need for ERP in companies exists because of the weaknesses of traditional information mechanism modes which have separate characteristics, namely:

• The amount of duplicated or redundant data is due to the mechanisms that each function has being different and not integrated.
• Management and vital factions have difficulty obtaining information that includes data from various business functions because a process is needed to integrate several existing data.
• Data that has a separate nature has a high risk of invalidity.
• Users who need to connect mechanisms from several business functions are busy with many accounts that must be remembered to connect each mechanism and the user interface mode is sometimes different for each mechanism so it needs to be studied exclusively.

Proper use of ERP will provide benefits and added value for the company, including:

• An integrated mechanism will provide a higher level of data validity and eliminate data duplication or redundancy.
• The information the company needs can be obtained more quickly, even in real time.
• There is only one mechanism access portal for all users and it provides users with a similar interface so that users can use it more easily.
• The use of an integrated mechanism will make business processes faster and paperless by eliminating unnecessary manual processes.
• Control over the security, availability and reliability of mechanisms becomes easier because all the mechanisms used by each function are integrated.

The Role of ERP in Companies and How ERP Systems Create Business Unit Integration

As information technology advances, ERP systems are becoming more advanced. Today, ERP systems can even be accessed through various mobile devices outside the company via the internet, allowing users to access them anytime and anywhere. This, of course, is accompanied by increasingly advanced security processes within these systems, which is one of the advantages of using an ERP system within a company. Implementing SAP within an organization integrates these powerful systems:

• A transition to one ERP system software will automatically update other modules if the information related to that module is changed. Data will be updated immediately as users enter it into the system. This is known as "real-time processing."
• Integration can occur mechanically with the requirement that all companies must use a similar data source, whether for consumer data, product data or supplier data through the Best ERP application.
• Data transparency – All users who have access to the mechanism can immediately view all the most up-to-date information whenever needed, even if the information was input by other users.

An integrated information mechanism between one unit and another is an important requirement in a campus. Integration between campus systems makes it easier to collect and utilize detailed data in a campus.

Also Read:

• Benefits of Using ERP Systems in Manufacturing Companies for Business Progress

• Key Points in Creating an ERP System for a Company's Business Units

Human resource management is an important requirement in a campus, therefore Human Capital Management (HCM) really helps campuses in controlling employee data in real time such as controlling personal data, absenteeism, training and salary control.

Enterprise Resource Planning (ERP) is an information system that can help companies integrate all their business locations into a single, reliable information system, making the company's processes more real-time and transparent. Utilizing ERP, particularly the Human Capital Management (HCM) module, helps companies integrate data related to existing resources across a campus.

Human Capital Management (HCM) as an effort to manage and improve human power to achieve higher levels of performance, the role of ERP in a company in the form of Human Capital Management (HCM) can create value through people and as a philosophy of human development.

By implementing ERP concepts on a campus, particularly the Human Capital Management (HCM) module, you can optimize the control of human resource data within an institution. This concludes our review of  the role of ERP in companies and how ERP systems create business unit integration,  which Dinamika Solusi Informatika has reviewed for you. Choosing a software developer that is a member of Microsoft Partner Indonesia is crucial to ensure your company's ERP system delivers maximum benefits.