What is ERP?

ERP is an acronym for Enterprise Resource Planning. It’s a modular software system designed to integrate the main functional areas of a company’s business processes into a single integrated system. Essentially, what an ERP software system does, is to standardize, simplify, and integrate business processes, to increase an organization’s efficiency and productivity – critical to a company’s growth and profitability. Business processes include finance, human resources, procurement, distribution, and many other departments.


ERP is often referred to as the “glue” that holds a company together. Before ERP came onto the scene in the 1990s, company departments worked independently, each managed by a standalone software system, such as a spreadsheet (Excel), where company information was recorded manually. This made it challenging for larger companies to efficiently manage and control their business with reams of management, operational, and logistics-related data.


Today’s ERP systems are becoming exceedingly easier to implement and use, although successful system onboarding does have a learning curve and requires user training. In addition, modern ERP systems are scalable, with the ability to grow as your business grows – and because of the system’s flexible nature, it can also be customized to suit individual business needs.

 

 

Different ERP Flavors – Your Choice

  • On-Premise ERP. An on-premise (traditional) ERP system runs on in-house servers at a company’s location or locations under the company’s control, requiring additional maintenance and associated costs. Enterprise-level corporations mostly use On-premise ERP systems.
  • Cloud ERP. Cloud-based ERP systems enable companies to store, manage and access all of their business data in the cloud without costly on-premise hardware and maintenance. As a result, cloud ERP can significantly reduce a company’s operating costs, time, and resources, one of the reasons why cloud-based ERP systems are fast gaining popularity for small and mid-sized organizations.
  • Hybrid ERP. Hybrid ERP, or a “mix” of on-premise and cloud ERP, enables companies to manage and control their ERP system via their in-house servers while in parallel storing all or some of their business data in the cloud.

Why Businesses Implement ERP – Common Use Cases

ERP has one fundamental goal – to optimize the organization within a company, end-to-end. An ERP system offers tremendous short and long-term benefits for companies of varying shapes and sizes and across all industry sectors. Here are some of the most common ERP use cases:

Integrate Financial Data

Manage Orders & Inventory

Built-in CRM

Standardize & Accelerate Production Processes

Manage Human Resources

Handle Procurement

Built-in BI & Analytics Tools

What Is A CRM System?

A CRM system is designed to help businesses manage information related to customer interactions.


CRM systems can generate sales projections, nurture prospects through the sales funnel, manage invoices and communication efforts.


A CRM improves efficiency, increases sales, helps deliver accurate customer data, improves customer service quality, and enhances customer satisfaction and interaction levels.

 

A Few Main CRM System Features Are:

 

  • Automate and manage marketing campaigns
  • Analyze purchasing patterns
  • Offer high-quality customer support
  • Automate redundant tasks
  • Identify new leads
  • Streamline the sales process

The Top 7 Benefits of ERP

  • Insights. Gain real-time business insights using the system’s built-in analytics, planning, and forecasting tools to make better, more informed business decisions.
  • Business Processes. Automate manual or routine tasks, implement smarter, more efficient workflows, and support more sustainable processes.
  • Cost Savings. Save time, resources, and costs with enhanced inventory planning and procurement, project and time management, and other critical cost-saving system tools.
  • Reporting. Wide range of reporting tools to generate reports in varying formats for all business processes, with real-time business data from a single integrated database.
  • Customer Service. Easy access to customer data for faster response times, accelerated delivery times, and an enhanced customer experience.
  • Financials. Automated accounting processes, including invoicing and collections tools to boost company cashflow and save time, resources, and costs, while maintaining government/banking compliance.
  • Supply Chain Management. Automated demand forecasting and planning tools to maintain lean inventories, reduce manufacturing bottlenecks, and support transparency throughout the supply chain.

When to Consider ERP for your Business

When it comes time to replace your legacy business management systems with an ERP, it’s essential to first understand your company’s actual business needs, and only then, shop around for the best possible ERP system. While ERP can be a costly upfront investment, implementing an ERP system will save valuable time, resources, and costs down the road.  


Following are real-life business scenarios that suggest it may be time for your organization to consider implementing an ERP, or upgrading your current ERP system:

  • Your business is growing and planning to take on new employees, products, and/or new local or global markets
  • Your organization’s strategy and product roadmap outline the need for implementing digital processes companywide that includes a new business management software solution
  • You need better management and control of your operational and business processes to make timely, better-informed strategic business decisions
  • Your organization’s legacy standalone system is outdated, where upgrades are no longer available, and the system no longer serves your business and system user needs

While ERP systems streamline and automate processes, creating leaner, more accurate, and more efficient operations, there are several critical reasons why a company should consider ERP. If your organization is faced with any or all of the issues listed here, then it may be not only a good time but the best time to invest in ERP software.