Everything you need to know

The abbreviation stands for Enterprise Resource Planning, but what does the ERP mean? A term coined by Gartner in the 1990s is defined as the ability to deliver an integrated suite of business applications. ERP tools are crucial for managing thousands of businesses because they integrate all the companies needed in a single system. They share a common process and data model, covering broad and deep operational end-to-end processes, such as those found in Finance and Accounting, Marketing and CRM, Supply Chain Management, Distribution, Manufacturing, Employees and Human Resources.

ERP software systems consists of business applications that are all connected and share one common database, centralizes data and resolves data conflicts and this is the reason why they sometimes been described as the “central nervous system of an enterprise”. They provide automation and integration of all day-to-day business operations, cross-departmental visibility and transparency, enable efficient analysis, and drive process improvements. Decreasing the number of resources necessary to run the business end-to-end leads to cost savings combined with higher productivity.

Enterprise resource planning systems helps you run efficiently your entire business. A good ERP system offers many advantages — which can vary depending on how the system is deployed and the adoption rate. Here are some examples of specific business benefits:

• Lower operational costs via adopting best practices and streamlining business processes;
• Reducing risk via maximizing business transparency through improved data integrity and financial controls. Predict and prevent the risk;
• Enhanced collaboration from users sharing common data in the database, incl. Customers and Vendors, Contracts, Prices, Orders, etc.
• Accelerated reporting: improved performance in real time thanks to the faster data tracking and easily sharing reporting results.
• Improved efficiency: through a common user experience across many business functions and well-defined business processes
• Higher productivity: Streamline and automate your core business processes to help everyone in your organization do more with fewer resources.

Modern ERP systems can be deployed in a different way: on premise, in a public or private cloud, or in various hybrid scenarios that combine environments.

• On-Premise ERP – this is the traditional model where the business software system is installed and run on the data center within the premises of the organization. The key leverage of On-Premise ERP systems is the control (including the security of its data) it provides to the organization, but this control also comes with the responsibility of managing and maintaining the system, which can be resource-intensive.
• Cloud-based ERP – also called SaaS ERP (since it is delivered over the Internet as a service your company subscribe to) is hosted in an offsite server (in the cloud) and is typically managed by your hosting vendor. With Cloud ERP deployment, most heavy IT work such as upgrading, maintaining and archiving is done. This is what turns the Cloud ERP better choice today – due to the lower upfront costs, greater scalability and easier integration.
• Hybrid ERP – a mixture of both, often with an on-premises ERP at headquarters and cloud-based ERP systems at subsidiaries.

• Small business ERP – small business solutions are usually located in the cloud, easier to install, and designed to grow with the company. It allows the small organizations to jump over the dispersed spreadsheets and locally installed numerous applications.
• Medium-sized ERP – companies and subsidiaries defined as medium-sized benefit from built-in best practices for dozens of different business processes in the ERP systems, such as Supply chain management, Distribution and Manufacturing.
• Enterprise ERP – large corporations with their world-wide operations usually needs a robust, market-leading ERP system. In this case the business tool can be deployed in all 3 ways: On-premise, in the cloud, or in a hybrid scenario depending on respective business requirements and possibilities.

5 reasons to look for an ERP solution:

1. Common database – centralized, consistent and reliable information providing solid base so the management can take more precise decisions. Common base also results in increasing data transparency, which is not possible without ERP.
2. Automation – periodically repetitive activities can be automated for higher productivity and efficiency by saving time and recourses of the company;
3. Integration – complete integration with external data sources and software solutions (incl. from third-party vendors) in order to speed the process and reduce the dependencies;
4. Latest technologies – different ERP modules allows you immediately to take advantage of rapidly advancing new technologies such as IoT (Internet-of-Things), RPA (Robotic Process Automation), AI-support and Machine learning;
5. Robust security – Data Security is a prominent part of the ERP System and it is also one of the major benefits that are caused by ERP. If the company is using a Cloud-based ERP then the data is highly encrypted, secured, and accurate, especially important to all organizations dealing with highly sensitive information.