Erp what is it

What is ERP and why do you need it?

ERP stands for enterprise resource planning. It’s software that manages a company’s financials, supply chain, operations, commerce, reporting, manufacturing, and human resource activities.

Most companies have a finance and operational system in place, but most other software out there can’t go beyond everyday business processes or help with future business growth.

As companies expand and their needs change, their systems should keep up with them. We’ll define what ERP is and why it’s smart to have software in place that keeps up with your business needs.

What is enterprise resource planning?

Historically, ERP systems were monolithic suites that worked separately and didn’t talk with other systems. Each system required expensive, complex, and customized code to meet unique business requirements which slowed—or even prevented—the adoption of new technology or process optimization.

What makes today’s ERP Software different is that it brings all these different processes to the table together in one fluid system. It doesn’t just offer data connectivity within your ERP system, but also within your productivity tools, e-commerce, and even customer engagement solutions helping you connect all your data for better insights that help you optimize your processes across your entire business.

In addition, a modern ERP solution offers flexible deployment options, improved security and privacy, sustainability, and low-code customization. But most importantly, it will build continuity and resiliency into your business and processes through insights that help you innovate at a rapid rate today while preparing your business for what’s next tomorrow.

Why ERP is critical for your business

While there’s no all-up solution software for every business process, ERP technology is getting better and better at bringing processes together. Once your processes, systems, and data are connected, you’ll get the intelligence, acceleration, and adaptability you need to start optimizing your operations.

Here’s three ways ERP can improve your business:

What business functions benefit from ERP?

ERP can cover many core functions across your organization—helping break down the barriers between the front office and back office while offering the ability to adapt your solution to new business priorities. Some of the key business functions include:

Commerce

Today’s retailers face many challenges, and an ERP system can deliver a complete, omnichannel solution that unifies back-office, in-store, and digital experiences. Customers will get a more personalized and seamless shopping experience through AI recommendations, while retailers are able to increase employee productivity, help reduce fraud, and grow their business.

Finance

Modern ERP will help you increase profitability while driving compliance. It offers dashboards and AI-driven insights that give you an overview of your finances to help you tap into the real-time information anytime and anywhere. It should also help you cut down on entering information manually by automating daily tasks and include tracking abilities that help with your business’s regulatory compliance.

Human resources

Modern solutions offer ways to manage company data and streamline employee management tasks like payroll, hiring, and other duties. You’ll be in a better position to help retain, recruit, and empower employees while also tracking employee performance and identifying HR problems before they happen.

Manufacturing

This function improves business communication, automates daily processes through robotic process automation, and offers manufacturers the ability to fulfill customer needs and manage resources by accessing real-time data. This solution also optimizes project and cost management as well as production planning.

Supply chain

If your company is still entering information by hand and trying to track down inventory in your warehouse, you can easily save time and money by automating these processes with ERP. Modern solutions also offer dashboards, business intelligence, and even Internet of Things (IoT) technology to help you get a handle on your inventory management.

Three signs that you need ERP

If you’re reading this and struggling with your legacy system, you probably already know that implementation is in your future, but here are the signs that you definitely need new ERP starting today:

TIP: If you or your staff is asking for a new system and there’s a resistance to an ERP change, one of the ways to combat this is to schedule a demo so everyone can see what’s out there. Plus, when everyone feels like they’re included in on the decision process it’ll make implementation much easier.

Why some businesses are afraid to embrace ERP implementation

Despite all the options out there, some companies are still hesitant about implementing ERP. There could be many reasons why, but where there’s a fear, there’s a solution.

FEAR: How do I know I’m choosing the right ERP solution for my business?

You don’t have to find the perfect software solution to fix everything. ERP should be able to take the best of the business processes you’re using now and bring them together under one system, while letting everyone in your organization view the same information. This is where your choice of at technology partner is important.

FEAR: We can’t afford a major ERP overhaul.

A solution doesn’t have to be an all or nothing implementation proposition. Software solution modules can be purchased separately depending on your business needs. This will help your team ease into the implementation piece of ERP and it’ll save having to invest in a major software renovation without knowing whether or not the functions you’re adding will pay off.

FEAR: We don’t want to lose the systems we have in place now.

As we mentioned, any ERP solution you choose should work with what you’re using now but also include features that can help in your future growth. For instance, if the software you have mostly handles the financial, supply chain, and manufacturing sides of your business, you may want to look for a solution that brings in a strong business intelligence component.

Dynamics 365 helps you connect and manage your business

Streamline processes with Dynamics 365 Business Central, an ERP solution that helps you elevate productivity and improve every customer interaction.

What is ERP and why do you need it?

ERP stands for enterprise resource planning. It’s software that manages a company’s financials, supply chain, operations, commerce, reporting, manufacturing, and human resource activities.

Most companies have a finance and operational system in place, but most other software out there can’t go beyond everyday business processes or help with future business growth.

As companies expand and their needs change, their systems should keep up with them. We’ll define what ERP is and why it’s smart to have software in place that keeps up with your business needs.

What is enterprise resource planning?

Historically, ERP systems were monolithic suites that worked separately and didn’t talk with other systems. Each system required expensive, complex, and customised code to meet unique business requirements which slowed—or even prevented—the adoption of new technology or process optimisation.

What makes today’s ERP Software different is that it brings all these different processes to the table together in one fluid system. It doesn’t just offer data connectivity within your ERP system, but also within your productivity tools, e-commerce, and even customer engagement solutions helping you connect all your data for better insights that help you optimise your processes across your entire business.

In addition, a modern ERP solution offers flexible deployment options, improved security and privacy, sustainability, and low-code customisation. But most importantly, it will build continuity and resiliency into your business and processes through insights that help you innovate at a rapid rate today while preparing your business for what’s next tomorrow.

Why ERP is critical for your business

While there’s no all-up solution software for every business process, ERP technology is getting better and better at bringing processes together. Once your processes, systems, and data are connected, you’ll get the intelligence, acceleration, and adaptability you need to start optimising your operations.

Here’s three ways ERP can improve your business:

What business functions benefit from ERP?

ERP can cover many core functions across your organisation—helping break down the barriers between the front office and back office while offering the ability to adapt your solution to new business priorities. Some of the key business functions include:

Commerce

Today’s retailers face many challenges, and an ERP system can deliver a complete, omnichannel solution that unifies back-office, in-store, and digital experiences. Customers will get a more personalised and seamless shopping experience through AI recommendations, while retailers are able to increase employee productivity, help reduce fraud, and grow their business.

Finance

Modern ERP will help you increase profitability while driving compliance. It offers dashboards and AI-driven insights that give you an overview of your finances to help you tap into the real-time information anytime and anywhere. It should also help you cut down on entering information manually by automating daily tasks and include tracking abilities that help with your business’s regulatory compliance.

Human resources

Modern solutions offer ways to manage company data and streamline employee management tasks like payroll, hiring, and other duties. You’ll be in a better position to help retain, recruit, and empower employees while also tracking employee performance and identifying HR problems before they happen.

Manufacturing

This function improves business communication, automates daily processes through robotic process automation, and offers manufacturers the ability to fulfil customer needs and manage resources by accessing real-time data. This solution also optimises project and cost management as well as production planning.

Supply chain

If your company is still entering information by hand and trying to track down stock in your warehouse, you can easily save time and money by automating these processes with ERP. Modern solutions also offer dashboards, business intelligence, and even Internet of Things (IoT) technology to help you get a handle on your stock management.

Three signs that you need ERP

If you’re reading this and struggling with your legacy system, you probably already know that implementation is in your future, but here are the signs that you definitely need new ERP starting today:

TIP: If you or your staff is asking for a new system and there’s a resistance to an ERP change, one of the ways to combat this is to schedule a demo so everyone can see what’s out there. Plus, when everyone feels like they’re included in on the decision process it’ll make implementation much easier.

Why some businesses are afraid to embrace ERP implementation

Despite all the options out there, some companies are still hesitant about implementing ERP. There could be many reasons why, but where there’s a fear, there’s a solution.

FEAR: How do I know I’m choosing the right ERP solution for my business?

You don’t have to find the perfect software solution to fix everything. ERP should be able to take the best of the business processes you’re using now and bring them together under one system, while letting everyone in your organisation view the same information. This is where your choice of at technology partner is important.

FEAR: We can’t afford a major ERP overhaul.

A solution doesn’t have to be an all or nothing implementation proposition. Software solution modules can be purchased separately depending on your business needs. This will help your team ease into the implementation piece of ERP and it’ll save having to invest in a major software renovation without knowing whether or not the functions you’re adding will pay off.

FEAR: We don’t want to lose the systems we have in place now.

As we mentioned, any ERP solution you choose should work with what you’re using now but also include features that can help in your future growth. For instance, if the software you have mostly handles the financial, supply chain, and manufacturing sides of your business, you may want to look for a solution that brings in a strong business intelligence component.

Dynamics 365 helps you connect and manage your business

Streamline processes with Dynamics 365 Business Central, an ERP solution that helps you elevate productivity and improve every customer interaction.

What is ERP?

See the industry-leading enterprise resource planning (ERP) cloud solution, serving as your integrated management of business processes and applications, to gain resilience and real-time agility, to position yourself for growth.

Enterprise resource planning—Overview

Definition of enterprise resource planning (ERP)

Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. A complete ERP suite also includes enterprise performance management, software that helps plan, budget, predict, and report on an organization’s financial results.

ERP systems tie together a multitude of business processes and enable the flow of data between them. By collecting an organization’s shared transactional data from multiple sources, ERP systems eliminate data duplication and provide data integrity with a single source of truth.

Today, ERP systems are critical for managing thousands of businesses of all sizes and in all industries. To these companies, ERP is as indispensable as the electricity that keeps the lights on.

Cloud ERP for Dummies

Read this guide to learn how to:

What is an ERP system?

How can these solutions manage organizations day-to-day business activities, such as accounting, finance, procurement, project management, supply chain, and manufacturing.

Enterprise resource planning systems are complete, integrated platforms, either on-premises or in the cloud, managing all aspects of a production-based or distribution business. Furthermore, ERP systems support all aspects of financial management, human resources, supply chain management, and manufacturing with your core accounting function.

ERP systems will also provide transparency into your complete business process by tracking all aspects of production, logistics, and financials. These integrated systems act as a business’s central hub for end-to-end workflow and data, allowing a variety of departments to access.

ERP Systems and software support multiple functions across the enterprise, mid-sized, or small businesses, including customizations for your industry.

What’s the difference between ERP and financials?

Although the term “financials” is often used when describing ERP software, financials and ERP are not the same thing. Financials refers to a subset of modules within ERP.

Financials are the business functions relating to the finance department of an organization and includes modules for financial accounting, subledger accounting, accounting hub, payables and receivables, revenue management, billing, grants, expense management, project management, asset management, joint venture accounting, and collections.

Financials software uses reporting and analytical capabilities to comply with the reporting requirements of governing bodies, such as the International Financial Reporting Standards Foundation (IFRS), Financial Accounting Standards Board (FASB) for Generally Accepted Accounting Principles in the United States (GAAP), as well as for other countries (HGB in Germany and PCG in France, for example).

For public organizations, financials software has to be able to produce periodic financial statements for governing regulators, such as the US Securities and Exchange Commission (SEC) (with reports such as quarterly 10-Q and annual 10-K), European Securities and Markets Authority (ESMA), and others. For these types of financial reports, a narrative reporting tool is used. The person who is ultimately responsible for financials is the CFO.

While financials handles one area of the business, ERP encompasses a wide range of business processes—including financials. ERP software can include capabilities for procurement, supply chain management, inventory, manufacturing, maintenance, order management, project management, logistics, product lifecycle management, risk management, enterprise performance management (EPM), human resources/human capital management.

ERP also integrates with front-office applications to build holistic views of customers, including customer relationship management (CRM) solutions. Additionally, cloud-based ERP applications are often embedded with next-generation technologies, such as the internet of things (IoT), blockchain, AI, machine learning, and digital assistants. These advanced technologies deliver data and capabilities that not only enhance many traditional ERP functions; they create new opportunities for increased efficiencies, new services, and deeper insight across an enterprise. Since ERP systems are comprehensive across an enterprise, their management often involves a partnership with the CFO as well as the CIO, COO, and other key executive leaders.

Cloud-based ERP applications are often embedded with next-generation technologies, such as the internet of things (IoT), blockchain, AI, machine learning, and digital assistants.

ERP fundamentals

ERP systems are designed around a single, defined data structure (schema) that typically has a common database. This helps ensure that the information used across the enterprise is normalized and based on common definitions and user experiences. These core constructs are then interconnected with business processes driven by workflows across business departments (e.g. finance, human resources, engineering, marketing, and operations), connecting systems and the people who use them. Simply put, ERP is the vehicle for integrating people, processes, and technologies across a modern enterprise.

See how industry analysts compare Oracle Cloud ERP against other financial management software providers.

For example: consider a company that builds cars by procuring parts and components from multiple suppliers. It could use an ERP system to track the requisition and purchase of these goods and ensure that each component across the entire procure-to-pay process uses uniform and clean data connected to enterprise workflows, business processes, reporting, and analytics.

When ERP is properly deployed at this automotive manufacturing company, a component, for example, “front brake pads,” is uniformly identified by part name, size, material, source, lot number, supplier part number, serial number, cost, and specification, along with a plethora of other descriptive and data-driven items.

Since data is the lifeblood of every modern company, ERP makes it easier to collect, organize, analyze, and distribute this information to every individual and system that needs it to best fulfill their role and responsibility.

ERP also ensures that these data fields and attributes roll up to the correct account in the company’s general ledger so that all costs are properly tracked and represented. If the front brake pads were called “front brakes” in one software system (or maybe a set of spreadsheets), “brake pads” in another, and “front pads” in a third, it would be tough for the automotive manufacturing company to figure out how much is spent annually on front brake pads, and whether it should switch suppliers or negotiate for better pricing.

A key ERP principle is the central collection of data for wide distribution. Instead of several standalone databases with an endless inventory of disconnected spreadsheets, ERP systems bring order to chaos so that all users—from the CEO to accounts payable clerks—can create, store, and use the same data derived through common processes. With a secure and centralized data repository, everyone in the organization can be confident that data is correct, up-to-date, and complete. Data integrity is assured for every task performed throughout the organization, from a quarterly financial statement to a single outstanding receivables report, without relying on error-prone spreadsheets.

Trending in modern finance

The ERP landscape has shifted with the rapid evolution of software as a service (SaaS) cloud applications. Because of the mobile platforms and decentralized workforce–work anywhere and anytime–ERP systems can no longer be tied to yesterday’s on-premises back-office applications. The next-generation, cloud-based, and modern ERP solutions support the new industry dynamics while providing the ability to reduce support time to enable organizations to respond quickly to volatile markets and industry trends.

The business value of ERP

It’s impossible to ignore the impact of ERP in today’s business world. As enterprise data and processes are corralled into ERP systems, businesses can align separate departments and improve workflows, resulting in significant bottom-line savings. Examples of specific business benefits include:

A brief history of ERP

From paper cards to mobile devices
The history of ERP goes back more than 100 years. In 1913, engineer Ford Whitman Harris developed what became known as the economic order quantity (EOQ) model, a paper-based manufacturing system for production scheduling. For decades, EOQ was the standard for manufacturing. Toolmaker Black and Decker changed the game in 1964 when it became the first company to adopt a material requirements planning (MRP) solution that combined EOQ concepts with a mainframe computer.

MRP remained the manufacturing standard until manufacturing resource planning (called MRP II) was developed in 1983. MRP II featured “modules” as a key software architectural component, and integrated core manufacturing components including purchasing, bills of materials, scheduling, and contract management. For the first time, different manufacturing tasks were integrated into a common system. MRP II also provided a compelling vision of how organizations could leverage software to share and integrate enterprise data and boost operational efficiency with better production planning, reduced inventory, and less waste (scrap). As computer technology evolved through the 1970s and 1980s, concepts similar to MRP II were developed to handle business activities beyond manufacturing, incorporating finance, customer relationship management, and human resources data. By 1990, technology analysts had a name for this new category of business management software—enterprise resource planning.

ERP deployment models: From on-premises to the cloud

ERP’s past: 1990s to the new millennium
From the 1990s until the beginning of the twenty-first century, ERP adoption grew rapidly. At the same time, the costs of implementing an ERP system began to climb. The hardware required to run the software was typically on company premises, with big machines in a server room. Both the hardware and the software licenses required capital investments and depreciated over 5 to 10 years. In addition, organizations nearly always wanted to customize their ERP systems to fit their specific needs, entailing an additional expense of software consultants and training.

Meanwhile, ERP technology was evolving to embrace the internet, with new features and functionality such as embedded analytics. As time went on, many organizations discovered that their on-premises ERP systems couldn’t keep up with modern security demands or emerging technologies such as smartphones.

Cloud ERP—A new ERP delivery model

Software-as-a-service (SaaS)
Enter the cloud—specifically, the software-as-a-service (SaaS) delivery model for ERP. When ERP software is delivered as a service in the cloud, it runs on a network of remote servers instead of inside a company’s server room. The cloud provider patches, manages, and updates the software several times a year—rather than an expensive upgrade every 5 to 10 years with an on-premises system. The cloud can reduce both operational expenses (OpEx) and capital expenses (CapEx) because it eliminates the need for companies to purchase software and hardware, or hire additional IT staff. These resources can instead be invested in new business opportunities, and the organization is always up-to-date on the most recent ERP software. Employees can shift their focus from managing IT to more value-added tasks such as innovation and growth.

7 reasons to move to an ERP cloud solution

For businesses of all sizes, including enterprise and small to midsize, retiring on-premises systems and moving entirely to the cloud all at once isn’t possible. Or, at the very least, it’s not something they’re comfortable doing within a short development window. Meanwhile, staying the course with an on-premises ERP, ignoring all the advantages of enterprise resource planning as a cloud solution, is no longer an ideal path, either. Why should you consider using cloud applications to replace or augment your on-premises system?

1. Readily adopt new and evolving SaaS technologies

Next-generation technologies, like artificial intelligence (AI), help cloud-based systems rapidly improve their capabilities with no need for periodic updates, unlike your legacy system. Now, with no additional or new input from the end-user, ERP systems continually become significantly easier to manage and use.

2. Extend the value of your existing ERP System

Augmenting and integrating legacy software with cloud applications can complement, enhance, and supplement important tasks. This approach can breathe new life into legacy ERP systems, giving businesses a great opportunity to start adopting cloud capabilities.

3. Access new technologies

Finding cloud applications that complement your legacy ERP software modules lets you immediately take advantage of rapidly advancing new technologies and improving user paradigms. These provide complimentary systems that deliver immediate business capabilities and value without a fundamental change in your operations.

4. Reduce third-party dependencies

Reporting and analytics for legacy systems typically require involvement from a third-party vendor to generate operational business intelligence. Using cloud applications from your legacy ERP vendor often produces the same or better intelligence without needing an additional vendor relationship.

5. Evolve your financial systems

Legacy systems were never meant to be modern reporting engines. Cloud-based technology was born in the last decade and developed, as a core principle, with an entirely different mindset and understanding of not only what was possible but what was needed to be successful for ERP platforms.

6. More robust security resources

Cloud solution service providers have large, full-time teams that are exclusively dedicated to proactively monitoring and staying current with cloud security issues and threats, 24 hours a day.

7. Attract in-demand talent

The next generation of young workers have grown up with seamless technology that is mobile, easy to use, and always-on. No company that continues to rely purely with on-premises technology will be able to recruit top talent, regardless of age.

Get started with Oracle ERP

Organizations have always struggled to balance traditional ERP’s high costs and complexity against the need for customized features and flexibility, all while meeting the demands of the business. Watch and learn how Oracle ERP Cloud delivers connected teams, unified data, and real-time insights to help you and your finance team ensure that the best business decisions are made. With ERP delivered as a service in the cloud, your organization can be future-ready and outpace change.

One of the benefits of the SaaS model is that the software is kept up-to-date with the latest features, functions, and best practices. Cloud ERP providers roll out updates regularly (as often as monthly, in Oracle’s case). This means that the latest new and revolutionary emerging technologies—such as AI, digital assistants, machine learning, blockchain, augmented reality, and the Internet of Things (IoT)—become available to subscribers on a regular cadence.

With access to these new technologies, organizations can quickly improve their business best practices as the ERP software evolves. They can automate processes that used to require heavy manual intervention, such as reconciling financial accounts. In addition, users gain a comprehensive, real-time understanding of enterprise business activities not only in the front office, but also in warehouses, on factory floors, and everywhere else across the enterprise. This knowledge is then readily available to every appropriate employee on their mobile devices, including smartphones and tablets.

Built for the digital age, today’s ERP cloud embraces mobile, social, analytics, and the latest emerging technologies. Anything less won’t move an organization forward.

Enterprise Resource Planning (ERP)

Investopedia / Joules Garcia

What Is Enterprise Resource Planning (ERP)?

Enterprise resource planning (ERP) is a process used by companies to manage and integrate the important parts of their businesses. Many ERP software applications are important to companies because they help them implement resource planning by integrating all of the processes needed to run their companies with a single system.

An ERP software system can also integrate planning, purchasing inventory, sales, marketing, finance, human resources, and more.

Key Takeaways

Enterprise Resource Planning (ERP)

Understanding Enterprise Resource Planning (ERP)

You can think of an enterprise resource planning system as the glue that binds together the different computer systems for a large organization. Without an ERP application, each department would have its system optimized for its specific tasks. With ERP software, each department still has its system, but all of the systems can be accessed through one application with one interface.

ERP applications also allow the different departments to communicate and share information more easily with the rest of the company. It collects information about the activity and state of different divisions, making this information available to other parts, where it can be used productively.

ERP applications can help a corporation become more self-aware by linking information about production, finance, distribution, and human resources together. Because it connects different technologies used by each part of a business, an ERP application can eliminate costly duplicates and incompatible technology. The process often integrates accounts payable, stock control systems, order-monitoring systems, and customer databases into one system.

ERP offerings have evolved over the years from traditional software models that make use of physical client servers to cloud-based software that offers remote, web-based access.

A company could experience cost overruns if its ERP system is not implemented carefully.

Benefits of Enterprise Resource Planning

Businesses employ enterprise resource planning (ERP) for various reasons, such as expanding business, reducing costs, and improving operations. The benefits sought and realized by one company may be different from another; however, there are some worth noting.

Integrating and automating business processes eliminates redundancies, improves accuracy, and improves productivity. Departments with interconnected processes can now synchronize work to achieve faster and better outcomes.

Some businesses benefit from enhanced reporting of real-time data from a single source system. Accurate and complete reporting help companies adequately plan, budget, forecast, and communicate the state of operations to the organization and interested parties, such as shareholders.

ERPs allow businesses to quickly access needed information for clients, vendors, and business partners, contributing to improved customer and employee satisfaction, quicker response rates, and increased accuracy rates. Associated costs often decrease as the company operates more efficiently.

Departments are better able to collaborate and share knowledge; a newly synergized workforce can improve productivity and employee satisfaction as employees are better able to see how each functional group contributes to the mission and vision of the company. Also, menial, manual tasks are eliminated, allowing employees to allocate their time to more meaningful work.

Special Considerations

An ERP system doesn’t always eliminate inefficiencies within the business. The company needs to rethink the way it’s organized, or else it will end up with incompatible technology.

ERP systems usually fail to achieve the objectives that influenced their installation because of a company’s reluctance to abandon old working processes that are incompatible with the software. Some companies are also reluctant to let go of old software that worked well in the past. The key is to prevent ERP projects from being split into many smaller projects, which can result in cost overruns.

Employing change management principles throughout the ERP life cycle can prevent or reduce failures that compromise full implementation.

ERP Solutions Providers

Some familiar names are leaders in ERP software. Oracle Corp. (ORCL) originally supplied a relational database that integrated with ERP software developed by SAP (SAP) before entering the broader enterprise market in a big way in the early 2000s. Microsoft (MSFT) has long been an industry leader, with many customers using multiple software applications from the company.

As cloud-based solutions have grown in popularity in recent years, the traditional ERP industry leaders have seen challenges from upstarts such as Bizowie and Workwise.

Examples of ERP

Men’s grooming product maker Fulton & Roark successfully implemented enterprise resource planning to better track inventory and financial data. The North Carolina company, like many other businesses, used spreadsheets to track inventory and accounting software to record financial data.

As the company grew, its processes lagged behind. Their antiquated inventory tracking system did not account for changing costs, and the accounting software could not record metrics needed for key financial statements. These breakdowns created manual processes, which further compromised time and resources.

To eliminate unnecessary processes and centralize work, they chose the Oracle NetSuite ERP system. Immediately, Fulton & Rourk was better able to identify accounting errors related to inventory, eliminate costs from employing third parties to evaluate their financial records, and better report financial positions.

Cadbury, global confectioner and maker of the popular chocolate Cadbury egg, also successfully implemented an ERP system. It operated thousands of systems that could not keep pace with its rapid growth, as well as used ineffective warehouse management systems. Trying its hand at enterprise resource planning again, it implemented a system that integrated its thousands of applications, standardized processes, and restructured warehouse management systems—breaking down silos for a seamless, integrated coordination of work—to name a few.

There are many case studies that support the need for properly executed enterprise resource planning. The system should match the needs and goals of the company.

What Is an ERP and How Does It Work?

Enterprise resource planning (ERP) consists of technologies and systems companies use to manage and integrate their core business processes. Enterprise resource planning software offers single system solutions that integrate processes across the business. Such applications allow users to interact within a single interface, share information, and enable cross-functional collaboration.

What Is an Example of an ERP?

With the explosion of the Internet of things (IoT), it’s no secret that Internet-fueled or cloud-based applications are on the rise. As a result, more companies are moving away from on-site ERP systems to adopt the more agile, cloud-based ERP system, managed and maintained by the host or vendor. Oracle, widely known in the tech industry, offers several cloud-based ERP products used by many household brands, such as FedEx, Blue Cross Blue Shield.

What Are the Benefits of an ERP?

An ERP promotes the free flow of communication across an organization and results in increased synergies between different business areas, increased efficiencies as processes are streamlined and information is readily accessible to those that need it; and reduced costs associated with outdated and ineffective technology. Adopting an ERP may be a costly endeavor, but the return on investment (ROI) may be achieved quickly. Most certainly, the benefits realized (e.g., increased productivity and reduced administrative costs) may far outweigh the costs to introduce an ERP.

What Should an ERP System Include?

The components of an ERP system are dependent on the needs of the organization. However, there are key features that each ERP should include. An ERP system should be automated to reduce errors, and flexible, allowing for modifications as the company changes or grows. More people are mobile; therefore, the ERP platform should allow users to access it from their mobile devices. Lastly, an ERP system should provide a means for productivity to be analyzed and measured. Other tools can be integrated into the system to improve a company’s capabilities.

The Bottom Line

Enterprise resource planning (ERP) manages and integrates business processes through a single system. With a better line of sight, companies are better able to plan and allocate resources. Without ERP, companies tend to operate in a siloed approach, with each department operating its own disconnected system.

ERP systems promote the free flow of communication and sharing of knowledge across an organization, the integration of systems for improved productivity and efficiencies, and increased synergies across teams and departments. However, moving to an ERP system will be counterproductive if the company’s culture does not adjust to the change and the company does not review how the structure of its organization can support it.

What is ERP and why do you need it?

ERP stands for enterprise resource planning. It’s software that manages a company’s financials, supply chain, operations, commerce, reporting, manufacturing, and human resource activities.

Most companies have a finance and operational system in place, but most other software out there can’t go beyond everyday business processes or help with future business growth.

As companies expand and their needs change, their systems should keep up with them. We’ll define what ERP is and why it’s smart to have software in place that keeps up with your business needs.

What is enterprise resource planning?

Historically, ERP systems were monolithic suites that worked separately and didn’t talk with other systems. Each system required expensive, complex, and customised code to meet unique business requirements which slowed—or even prevented—the adoption of new technology or process optimisation.

What makes today’s ERP Software different is that it brings all these different processes to the table together in one fluid system. It doesn’t just offer data connectivity within your ERP system, but also within your productivity tools, e-commerce, and even customer engagement solutions helping you connect all your data for better insights that help you optimise your processes across your entire business.

In addition, a modern ERP solution offers flexible deployment options, improved security and privacy, sustainability, and low-code customisation. But most importantly, it will build continuity and resiliency into your business and processes through insights that help you innovate at a rapid rate today while preparing your business for what’s next tomorrow.

Why ERP is critical for your business

While there’s no all-up solution software for every business process, ERP technology is getting better and better at bringing processes together. Once your processes, systems, and data are connected, you’ll get the intelligence, acceleration, and adaptability you need to start optimising your operations.

Here’s three ways ERP can improve your business:

What business functions benefit from ERP?

ERP can cover many core functions across your organisation—helping break down the barriers between the front office and back office while offering the ability to adapt your solution to new business priorities. Some of the key business functions include:

Commerce

Today’s retailers face many challenges, and an ERP system can deliver a complete, omnichannel solution that unifies back-office, in-store, and digital experiences. Customers will get a more personalised and seamless shopping experience through AI recommendations, while retailers are able to increase employee productivity, help reduce fraud, and grow their business.

Finance

Modern ERP will help you increase profitability while driving compliance. It offers dashboards and AI-driven insights that give you an overview of your finances to help you tap into the real-time information anytime and anywhere. It should also help you cut down on entering information manually by automating daily tasks and include tracking abilities that help with your business’s regulatory compliance.

Human resources

Modern solutions offer ways to manage company data and streamline employee management tasks like payroll, hiring, and other duties. You’ll be in a better position to help retain, recruit, and empower employees while also tracking employee performance and identifying HR problems before they happen.

Manufacturing

This function improves business communication, automates daily processes through robotic process automation, and offers manufacturers the ability to fulfil customer needs and manage resources by accessing real-time data. This solution also optimises project and cost management as well as production planning.

Supply chain

If your company is still entering information by hand and trying to track down stock in your warehouse, you can easily save time and money by automating these processes with ERP. Modern solutions also offer dashboards, business intelligence, and even Internet of Things (IoT) technology to help you get a handle on your stock management.

Three signs that you need ERP

If you’re reading this and struggling with your legacy system, you probably already know that implementation is in your future, but here are the signs that you definitely need new ERP starting today:

TIP: If you or your staff is asking for a new system and there’s a resistance to an ERP change, one of the ways to combat this is to schedule a demo so everyone can see what’s out there. Plus, when everyone feels like they’re included in on the decision process it’ll make implementation much easier.

Why some businesses are afraid to embrace ERP implementation

Despite all the options out there, some companies are still hesitant about implementing ERP. There could be many reasons why, but where there’s a fear, there’s a solution.

FEAR: How do I know I’m choosing the right ERP solution for my business?

You don’t have to find the perfect software solution to fix everything. ERP should be able to take the best of the business processes you’re using now and bring them together under one system, while letting everyone in your organisation view the same information. This is where your choice of at technology partner is important.

FEAR: We can’t afford a major ERP overhaul.

A solution doesn’t have to be an all or nothing implementation proposition. Software solution modules can be purchased separately depending on your business needs. This will help your team ease into the implementation piece of ERP and it’ll save having to invest in a major software renovation without knowing whether or not the functions you’re adding will pay off.

FEAR: We don’t want to lose the systems we have in place now.

As we mentioned, any ERP solution you choose should work with what you’re using now but also include features that can help in your future growth. For instance, if the software you have mostly handles the financial, supply chain, and manufacturing sides of your business, you may want to look for a solution that brings in a strong business intelligence component.

Dynamics 365 helps you connect and manage your business

Streamline processes with Dynamics 365 Business Central, an ERP solution that helps you elevate productivity and improve every customer interaction.