Management system: what is it? How many types are there? Which ERP provider does your company need? A management system is a tool that allows to control, plan, organize and automate the administrative tasks of an organization. A management system analyzes a company’s performance and risks 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 by 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 company’s objectives. It’s important that each area has a clear and defined objective and goals. This gives the guarantee of directing your business more easily and effectively.

Types of management systems

ERP (Enterprise Resource Planning)

ERP systems give complete and integral support to business management. When we ask what an ERP is, we should not just stick to its acronym and say that it’s 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 oriented to support the processes related to commercial management and customer relationship management, both in the pre-sales and post-sales areas. It’s true that most ERP systems also cover this facet, but at the commercial level there are products oriented only to commercial and customer relationship management. For this reason, we can find CRM systems integrated to an ERP system, covering a wider functionality.

WMS (Warehouse Management Systems)

Logistics activities related to warehouse management have also given rise to a market of applications oriented to cover 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 quantities of documents, usually tracking, storing, archiving and organizing electronic documents or images of paper documents.

BPM (Business Process Management)

ERP systems allow users to collect data or access information needed to perform their functions and can also facilitate work sequencing and operational flow coordination across different departments and users in the company. This workflow coordination capability is referred to as BPM (Business Process Management) and is a functionality provided by specific software applications or by some of today’s ERP systems.

B.I. (Business Intelligence)

The systems called “Business Intelligence Tools” are oriented to the analysis of available information, facilitating decision making. They are systems fundamentally oriented to management. During the last decades, these systems were clearly differentiated from the rest of the ERP business management system. 

Nowadays, many ERP management systems incorporate their own I.B. tool. In fact some of the international management software manufacturers have acquired companies specialized in I.B. systems to provide an integrated solution for both business operations (ERP) and information analysis (I.B.).

Of all the types of solutions within a management system, the term “ERP” is the most popular and the most commercially relevant as a synonym for “business management software”. It’s for this reason that it’s believed that a management system is the same as an ERP system and it’s 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 manner, for example: with full access at all times. 

Normal management software, on the other hand, is based on multiple independent or modular applications that duplicate data or do not centralize them 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 associated problems.

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 by eliminating the complex connections between different systems. This facilitates the flow of information between the functions of:

• Logistics
• Manufacturing
• 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 mainstay of any company’s operations. There are many advantages that these systems bring to the organization:

• Greater volume of work with minimum resources: The integration provided by the systems between areas of the company and with other organizations is facilitating the automation of information flows. This results in greater agility when carrying out processes, which are increasingly automated and based on management rules.
• Control of all company processes: Management systems facilitate the control of all the company’s processes, which in turn allows optimization in terms of costs, quality or time and facilitates continuous improvement.
• Increased communication and integration with the market: Every day, systems are becoming more open to the outside world and more market and customer oriented. Having good market and customer information is essential for the success of any company in achieving its business objectives.
• Cost reduction: In addition to the reduction in information management and administrative costs, management systems provide information that allows the company to reduce its operating costs. For example, the system tells us which is the best order to follow to execute the production plan, which is the supplier with the best prices and conditions to give us for a certain order. It also says where to place the merchandise in the warehouse to use the minimum electric energy or how to group the accounting effects to have the minimum financial expenses according to the banking conditions.
• Improving customer service: This is an aspect included in the general improvement of the company’s processes, but it’s of great importance for any company. Having a comprehensive vision of the relationship with the customer will enable the company to provide the best service to the customer and, therefore, provide greater differential value with the competition and achieve a higher degree of loyalty.
• Integrating 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 not only improves costs, but also avoids errors and translates into improved customer service.
• Efficient resource management: The company has limited resources to develop its activity. We are referring to resources of all kinds: human, economic, material and even information itself as a resource. 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.