Management System: What is it? How many types are there? and What are its benefits?

Management System: What is it? How many types are there? and What are its benefits?

A management system is a tool that allows you to control, plan, organize and automate the administrative tasks of an organization. A management system analyzes the returns and risks of a company, in order to provide a more efficient and sustainable work environment.

Some companies or SMEs have activities that are not automated, which are often supported in departmental systems and almost always in Excel sheets developed individually by the users involved in each of the functions. A management software unifies the operation of all areas of the business to align them with the objectives of the company. It is important that each area has clear and defined both its objective and its goals. This gives the guarantee of directing your business more easily and efficiently.

Types of management systems

ERP (Enterprise Resource Planning)

ERP systems give complete and comprehensive support to business management. When we ask ourselves what an ERP is, we should not stop with its acronym and say that it is enterprise resource planning. An ERP system links and determines a multitude of business processes and facilitates the flow of data between them.

CRM (Customer Relationship Management)

CRM systems are aimed at supporting processes related to business management and customer relations, both in the pre-sale and after-sales areas. It is true that most ERPs also cover this facet, but at a commercial level there are products oriented only to commercial management and customer relations. For this reason, we can find CRM systems integrated into an ERP system , encompassing a broader functionality.

WMS (Warehouse Management Systems)

Logistics activities related to warehouse management have also given rise to a market for applications aimed at meeting this need. Most ERP systems cover this function, but some companies implement specialized WMS systems to achieve a higher level of automation in the management of their warehouses.

DMS (Document Management Systems)

Document management systems are all those created for the management of large amounts of documents, they usually track, store, archive and organize electronic documents or images of paper documents.

BPM (Business Process Management)

ERP systems allow users to collect data or access the information necessary for the development of their functions and can also facilitate the sequencing of work and coordination of the operational flow through the different departments and users of the company. This ability to coordinate workflow is what is called BPM (Business Process Management) and it is a functionality provided by specific software applications or by some of the current ERP systems.

BI (Business Intelligence)

The systems called “ Business Intelligence Tools ” are oriented to the analysis of available information, facilitating decision-making. These are fundamentally management-oriented systems. During the last decades, these systems were clearly differentiated from the rest of the ERP business management system. At the moment, many ERP management systems incorporate their own BI tools and in fact some of the international manufacturers of management software have acquired companies specialized in BI systems to provide an integrated solution for both business operations (ERP) and for information analysis (BI).

Of all the types of solutions within a management system, the term “ERP” is the one that has acquired the greatest popularity and the one that has the most commercial relevance as a synonym for “business management software”. It is for this reason that a management system is believed to be the same as an ERP system and it is not. 

Is a management software the same as an ERP?

The main difference between a management software and an ERP derives from its own definition. An ERP is a system that integrates all the business processes of a company , allowing all the information to be available at any time in a centralized way, that is, with full access all the time. For its part, a normal management software is based on multiple independent or modular applications that duplicate the data or do not centralize it in a single database. We also find computer systems that are based on independent file databases, which makes it difficult to make information available at any time, with all the problems associated with it.

Likewise, the definition of an ERP tells us that this type of software is designed to model and automate the management processes of a company eliminating the complex connections between different systems, which facilitates the flow of information between the functions of

  • Logistics
  • Manufacture
  • Finance
  • Human Resources

In conclusion, an ERP system is a type of management system solution.

Benefits of a management system

The role of management systems has evolved to become the support for the operation of any company. There are multiple advantages that these systems bring to the organization:

Higher workload with minimal resources

The integration that the systems provide between areas of the company and with other organizations is facilitating the automation of information flows, which results in greater agility when carrying out processes, which are increasingly automated and based on in management rules.

Control of all company processes

Management systems facilitate the control of all company processes, which in turn allows optimization at the level of costs, quality or time and facilitates continuous improvement.

Greater communication and integration with the market

Every day, systems are more open to the outside and more market and customer oriented. Having good information on the market and customers is essential for the success of any company in achieving its business objectives.

Costs reduction

In addition to reducing the costs of managing information and administrative costs, management systems provide information that allows the company to reduce its operating costs. For example, the system tells us what is the best order to follow to execute the production plan, which is the supplier with the best prices and conditions can give us for a certain order, where should I locate the merchandise in the warehouse to spend the minimum electrical energy or how to group my accounting effects to have the minimum financial expenses depending on the banking conditions.

Improve customer service

It is an aspect encompassed in the general improvement of company processes, but which is of great importance for any company. Having a comprehensive view of the relationship with the customer will make it easier for the company to provide the best customer service and, therefore, provide greater differential value with the competition and achieve a higher degree of loyalty.

Integrate with customers and suppliers

Integration with customers and suppliers is currently one of the most obvious operational optimization factors in any company. Achieving a good level of integration results not only in cost improvement, but also avoids errors and translates into improved customer service.

Efficient resource management

The company has limited resources to carry out its activity. We refer to resources of all kinds; human, economic, material and even the information itself as a resource. The management systems are the fundamental support for the management of these resources. In fact, the term ERP was defined around this idea, since its meaning is Enterprise Resource Planning.

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