Does your business need an ERP?

Wednesday - 03/03/2021 08:15
Trying to keep a company running smoothly — not to mention profitably — can sometimes feel like spinning plates while riding a unicycle, especially if you’re forever hopping between programs just to keep everything on track.

Does your business need an ERP?

That’s why many successful businesses use an ERP, and why, if you’re involved in running a business, you might want to consider using one too. But what is ERP? What does an ERP do? Could an ERP benefit your business? We’ve put together a beginner’s guide to ERP to help you find out.

What is ERP?

ERP stands for Enterprise Resource Planning, and an ERP solution is simply a piece of software that helps businesses manage their backend processes. That includes everything from finance and accounting, to procurement, supply chains, inventory, as well as core HR tasks like scheduling. Essentially, an ERP is a centralized program from which all the essential functions of a business can be run. ERP systems come in all shapes and sizes, with many ERP products aligned to particular industries or business types.

What does an ERP do?

ERP software has a number of uses for businesses, but essentially, an ERP is used to keep all of an organization’s crucial data in one place, ensuring that it’s safe, organized and accessible. Having an ERP means you only need one program to keep track of all the moving parts in an organization; so nothing gets lost in some long-forgotten spreadsheet. An ERP gives a complete picture of the what, when, who, why and how in a business’s day-to-day operation.

What is ERP software used for?

Financial management

Having a clear picture of your finances is imperative for any successful business, which is why a sturdy financial management module lies at the heart of every ERP solution. Although an ERP system will manage all of your business accounting requirements, it can also help manage a wider range of financial tasks, like budgeting, recording transactions, dealing with expenses, overseeing assets and collections, and measuring cash flow.

A good ERP solution will also help keep financial data safe and compliant. Security is a top concern for makers of business software, particularly in light of recent high-profile data breaches. Many ERP providers offer a cloud-based service, meaning businesses can take advantage of their service provider’s advanced security features, automatic backups, and managed disaster recovery procedures.

By evaluating financial data, and offering a 360-degree picture of a company’s fiscal health, an ERP can even present opportunities to maximize profitability. An intelligent software program can analyze data and spot patterns with a meticulousness and speed that manual reporting simply can’t match.

Supply chain and operations management

For businesses that rely on materials coming in and products going out, being able to properly manage that supply chain is vital. A business is only as successful as the chain it exists in, and the need to better administrate the supply chain is the primary reason that ERP was first created.

Tracking all supply chain communication through one consolidated system means there’s no room for error; any and all contact is clearly recorded, and less time is wasted chasing up replies or searching through inboxes. An ERP can also help keep things ticking over by automating tasks, such as placing orders when stock levels drop below a predefined point.

When a business is part of a chain, it’s not only that business’ performance that can impact profits, but also that of your vendors. ERPs can help track and evaluate the efforts of those both higher and lower in the chain, allowing you to monitor KPIs — such as cost, error frequency, and timescales — and create a more efficient network.

Project management

An ERP gives users an accurate, real-time overview of the entire product lifecycle — from quotations issued, through to production, delivery, invoicing and collection — so not only can businesses oversee their supply chain, but also their day-to-day production.

If a business manufactures or produces a product, keeping employees informed at every stage, and keeping tabs on timings is imperative. An ERP system can help organizations monitor the progress of numerous projects at one time, so businesses know at exactly which stage a project currently is, and what the next steps are.

Just as business learn from past experiences, so can an ERP; a smart software solution can let its users know if a project is likely to miss a deadline or exceed a budget, or send a reminder when a payment is overdue, helping everything stay on track.

Human resources/capital management

ERP is all about getting the most out of your resources, and, as any successful business owner will tell you, the most important resource available to any organization is its people. Through an ERP’s human resources module, businesses can get a consolidated overview of their workforce, and manage core HCM functions such as time management and payroll.

Like many other arms of the ERP system, a business’s HCM department benefits enormously from its data being centralized and accessible. Managing employees through an ERP means that data will be consistent and up to date; no more scrambling around through Rolodexes and phones for an employee’s number when they don’t turn up on time.

Repetitive HCM tasks like scheduling, tracking absences and managing vacation time is another place where ERP automation can step in to save time. HCM modules can also ensure businesses are compliant with employment laws and regulations by collecting the required information, and giving a clear overview of hiring data.

Business intelligence

Business intelligence is a key aspect of ERP software. Native BI features in ERP solutions help track progress, measure performance, and produce in-depth reports. The centralized nature of an ERP system means all of your business data is in one place, and when it comes to BI, that means more information to analyze, giving users a complete picture across every department.

Thorough business intelligence tools provide digestible, up-to-date information via customizable dashboards, allowing businesses to get deep insights into what’s working and what isn’t. Being equipped with the right data can help empower a company to make more informed, data-driven decisions in the future.

Customer relationship management

While in-depth sales and customer service functions tend to be handled by a separate system, known as a CRM, many ERPs also have some customer relationship management features built in, giving additional functionality to businesses who perhaps don’t deal with customers on a scale that requires an additional platform.


Not content with streamlining business processes, many ERPs can actually automate certain tasks, helping to boost user productivity even further. Whether it’s generating schedules for employees, issuing invoices, or performing data entry, ERPs can take care of many administrative obligations, unburdening users from repetitive duties.

As developments in AI and machine learning continue, ERPs are getting smarter. Not only can they take care of some of the more tedious business administration, many ERPs also learn from the data inputted into them. With access to business data from across an organization, ERPs can analyze key information, provide practical insights, and suggest steps to help businesses work more efficiently.

For example, while chatbots play a large part in customer service and on social media, they’re beginning to pop in ERP environments to help users access data more easily. This type of AI can already be seen on platforms, which allows users to ask a question — how many visits did my webstore get last month, perhaps — and get a simple answer in seconds, rather than spending time searching for and collating data manually.

Explore More

Total notes of this article: 17245 in 3450 rating

Ranking: 5 - 3450 vote
Click on stars to rate this article

  Reader Comments

Security Code