Chapter 3

How Does ERP System Work?

ERP Systems work via a central database where information is updated in one module, which sends data to a central shared database, which in return shares the appropriate information with other modules. So users can look at the dashboard to view real-time data across different departments such as finance, marketing purchasing, sales supply chain, operations, etc. This enables to quickly analyze data and create reports along with streamlining and automating business processes.

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The key purpose of an ERP system is to improve efficiencies, productivity and reduce cost, therefore, the business profitability. This is achieved by better managing company resources such as money, workforce, assets, time, and others.

And how this is done is by using an ERP system that pulls a number of different data sources across various departments into the same environment.

Why businesses implement ERP systems graph. Reasons for Implementing ERP system in Malaysia and Singapore

This means, ERP uses a centralized database for various business processes to reduce manual labor and simplify and automate existing business workflows, and gives a total view of the business.

It works by using a defined, standard data structure. Information entered by one department is available to authorized users across the business in real-time. This gives everyone a total overview of the business and helps everyone to stay on the same page.

For example, you are an owner of an electronic retail chain, and you are having multiple warehouse locations across Malaysia. Also, you are having an e-commerce site as due to pandemic and MCO, people shift to buying online. All the data from multiple store locations, warehouses, your e-commerce store, and HQ are fed into the ERP system.

This gives you the total visibility of your inventory across all stores and warehouses. Also, as sales are made, systems automatically adjust the inventory level for each store and update the revenue. and with e-commerce capability, customers can order your products online and then pick them up from the closes store.

What about you don’t have currently the stock at the store? ERP system helps you to automate the process of finding and delivering the stock from your warehouse to your retail store. On top of that, the more robust ERP systems can provide a recommendation with an AI assistant to ensure you are always having the right amount of stock at your retail stores as well as at your warehouses.

And all the information from store and e-commerce sales is standardized and entered into the system where accounting and finance can access clean and accurate information from sales, purchasing, and supply chain to create reports.

Also, because management can see all the data in real-time, they can make better decisions, they can quickly spot trends for each individual location and take a proactive decision or minimize any threads.

For example, what is the best performing store and what is the lowest-performing store and take proactive action to improve that or what are the best selling items.

ERP system gives you total control of your business and enables you to efficiently and effectively manage your data in a safe environment.

However, most of the functionalities are already provided by ERP systems, and often departments switching from using multiple tools to one unified system complete the job once an ERP system is implemented.

Learn more about Microsoft Dynamics 365 ERP Applications

Microsoft Dynamics 365 ERP Applications are standalone business apps that allow you to improve financial dexterity, operational proficiency, and project-centric services success so you can unlock the insights needed to adapt faster, work smarter, and perform better.

Dynamics 365 Business Central

Dynamics 365 Business Central is an all-in-one enterprise resource management System for Small-Medium Size Businesses to centralize, simplify and automate your business processes across Finance, Supply Chain, Sales, Customer Service, Manufacturing, and Projects.

Dynamics 365 Commerce

Dynamics 365 Commerce empowers your business to deliver unified, personalized, and seamless buying experiences for customers and partners. Unify back-office, in-store, e-commerce, and call center experience to increase productivity and optimize store operations.

Dynamics 365 Supply Chain Management

Dynamics 365 Project Operations get the visibility, collaboration, and agility needed for your project-centric business. Empower your teams to win more contracts, optimize resource utilization, accelerate project delivery, and get business insights from sales to project financials.

Dynamics 365 Finance

Dynamics 365 Finance automates, simplify and centralizes your global financial operations, maximizes financial visibility and profitability and monitors global financial operations in real-time, predicts outcomes, and makes data-driven decisions to drive business agility and growth.

Dynamics 365 Project Operations

Dynamics 365 Project Operations get the visibility, collaboration, and agility needed for your project-centric business. Empower your teams to win more contracts, optimize resource utilization, accelerate project delivery, and get business insights from sales to project financials.