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Basic functions ERP

Core processes

Freddy Czaja

Basically, an ERP should map all business processes and avoid island solutions.
Nevertheless, there are specialized software (isolated solutions) that are not easy to replace and are used in addition to the ERP to better master entrepreneurial tasks. In this article we want name the basic functions of ERP solutions.

Objectives of an ERP-software

Lowering costs
Efficient use of resources
Reduction of capital commitment
Better evaluation of key figures
Improvement of planning quality
Improvement of process quality
Automation of processes

Basic functions

As the name Enterprise Resource Planning implies, resources such as materials, capital, personnel, operating resources as well as information and communication technology are to be mapped and controlled in the enterprise software. If we reduce this to the essentials (basic functions), then material, capital, personnel and Operating Equipment remain over.

Material Management

The core function of an ERP is material management is the management of purchasing, sales and storage of materials, products and services, with all related processes, such as needs assessment, storage bin organization or billing. The goal is the temporal, quantitative, qualitative and spatial coordination (planning and control) of the products and materials inside and outside the company.

Inventory (Operating equipment)

Just as with material management, there should also be a very good overview of the operating equipment required for production (land, buildings, tools, machines and mechanical systems). In Odoo ERP, for example, this is managed in the app inventory to separate the material management from the operating equipment. The advantage of integrating the inventory in the ERP is that all important data is summarized in a software and with the accounting software (internal or external) a unit. What is recorded: name of the operating equipment, purchase price, date of purchase, invoice, the person using (laptop), warranty, etc.

Finance (Capital)

Another advantage of ERP software is that all changes in the system influence each other. In particular, the software links information about finance, human resources, production, sales and purchasing. For the depiction of capital, this means that, for example, when purchasing and selling products or materials, the presentation of finances (and the financial situation) changes in real time.


The personnel administration has a high priority in companies. The whole process begins with the management of ordinary personal data, continues with the mapping and management of sick leave and vacation days to production planning and control (PPS) with its work schedules for employees (production time) and the tracking of working hours.


Accounting and other areas do not necessarily have to be mapped in ERP. Here it must be considered whether a specialized software brings more benefits or whether the integration is worthwhile (smaller companies). The goal should nevertheless be to avoid isolated solutions and to map everything in the ERP - or at least to facilitate the cooperation of the software with the ERP. That's why standard interfaces will become increasingly important in the future.

Examples of ERP interfaces
Accounting Software (Datev)
Logistics company (UPS)
Online shop software (Magento)

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About Freddy Czaja

SEO is the air he breaths. If it has a bit of Oxygen, he doesn't care/ He likes his coffee black and cold.