Enterprise resource planning (ERP) definition
Essential for success in modern businesses, enterprise resource planning (or ERP) is a type of software that integrates the management of day-to-day business operations such as:
- Finance and Accounting
- Human Resources
- Customer Relations
- Inventory and Product Management
Connecting these operations under one suite can boost company efficiency and allow for real-time assessment of core business processes. A range of data is collected and analyzed by the ERP software, meaning the user is able to track resources, production, and finances across different sectors of the business continuously.
ERP for small businesses
While ERP was at one time considered an enterprise-only tool, a broader ERP definition includes suites available to businesses of all sizes.
ERP software is able to address many challenges facing small businesses. For example, many small businesses struggle with inconsistent information from different business areas or else don’t have access to up-to-date financial information when they need it. These problems can significantly impact your company and your ability to seize new opportunities.
An ERP system can help small businesses streamline routine operational tasks, cut costs, and save valuable time.
What are the benefits of ERP?
An ERP solution provides real-time information about your company, highlighting areas for improvement, and ensures you comply with financial regulations – all from one place.
- Streamline key processes. Consolidate daily operations and maximize efficiency with an easy-to-use enterprise resource planning software.
- Control costs. ERP systems help identify areas for improvement and inform larger business decisions to keep costs down, all while growing your company.
- Increase productivity. An ERP solution ensures everyone is on the same page by improving the flow of information between teams. ERP software helps boost employee morale by simplifying operations and improving efficiency.
- Future-proof your business. With in-depth insights, you can better define your goals, identify business needs, and expand into new territories or markets. Planning business growth is made simple with the right ERP tools.
What is an example of an ERP system?
ERP systems have a diverse range of powerful yet flexible business applications.
For example, ERP software can be used to create and maintain a cohesive, multi-functional database, allowing multiple divisions, such as management and sales, to collaborate with real-time synchronization – rather than wasting valuable time manually processing and creating reports. By streamlining workflow, managing information, and delivering actionable insights into trends and performance, ERP systems simultaneously increase productivity, mitigate the risk of errors, and ultimately, drive greater profitability.
When effectively implemented, ERP software can lower costs while improving regulatory compliance, making ERP an indispensable tool for all types of businesses.
What is ERP implementation?
An ERP implementation refers to the rollout of enterprise resource planning software within a business. It typically requires extensive planning and a significant investment. That’s unless a business chooses cloud-based ERP.
A successful ERP deployment is not an easy task. Many companies struggle to find a balance between real-time and batch integration, as well as external and internal ERP systems. Enterprise resource planning is a complex challenge, and there are many points to consider before launching a new strategy.
Traditionally, ERP implementation failures can occur when managers don’t consider :
- How a successful ERP implementation will improve day-to-day business processes.
- Full ERP implementation costs from beginning to end.
- The time it will take to complete a successful ERP implementation.
What is necessary for a successful ERP implementation?
As with most business pursuits, your success depends on using a systematic approach.
It may be helpful to ask the following questions :
- What inefficiencies in your current business processes are you looking to improve?
- Which process do you want to mitigate against?
- How can ERP software address these needs or wants?
- What is your budget for ERP integration?
- What is your timeline?
- Have you allowed for contingencies?
- Have you communicated ERP implementation phases internally?
Make sure the entire process is divided into ERP implementation steps, and each stage has specific timelines for completion. To guarantee a seamless application, decide who should lead an ERP implementation, and assign them to be responsible for ensuring all deadlines are met.
Your ERP system integration process should be supported by documentation to minimize the chances of encountering delays. Such pre-worked documentation shared by the ERP provider ensures that, as a business, you can hit the ground running and hone in on new opportunities.