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.
