What Is ERP (Enterprise Resource Planning)?

what is erp - enterprise resource planning

What is ERP? Well, firstly, it’s an acronym for Enterprise Resource Planning and secondly, it’s an indispensable system that your business shouldn’t be without. If you think striving for cohesion between your business processes and enabling an easy data flow among them is a challenge, ERP is the answer to your needs.

It’s all about technology integration across your company and achieving this in the most effective manner possible. Whether you’re trying to streamline your operations, develop your marketing database, process orders faster, optimise your customer journey, add in employee portals and dashboards, or anything similar, ERP can help.

It’s a broad topic and if you’ve been trying to wrap your head around what is enterprise resource planning, Saxons is here to give you a helping hand. We’ll take you through exactly what is ERP, as well as how it can benefit your business in the modern world. Read on to find out more or head over to our Tech page for more of our tech related blogs.

The basics of ERP

Essentially, ERP is an all-encompassing word for the systems and software packages that are used by companies in order to effectively manage business duties. Thankfully, this includes all kinds of business activities, such as accounting, management, procurement, sales, marketing, as well as the manufacturing side of things.

With ERP systems, you’ll find that things will be designed around a common, defined data structure and that this will normally utilise a common database. Here, all of your data from multiple sources can be collated into one ‘true’ source which will eliminate any chance of duplication or misinterpretation.

Additionally, it’s important to note that your company’s centralised, collated data will be widely and easily accessible for employees or departments that require access.

So, why is this any easier than having individual databases that contain spreadsheets and the like? Unfortunately, a database network of this kind can be hugely chaotic at a smaller company, let alone a larger one.

ERP systems do away with all confusion that a disjointed database can bring by acting as a secure and centralised data repository. Here, everyone at your company can be confident that important data is secure, accurate, and up to date.

How can it help your business?

No matter which way you look at it, an ERP system is a vital component at a modern company. With vast amounts of important data and business processes flowing through ERP systems, companies can vastly optimise the way they operate. This kind of optimisation allows for better alignment between departments, enhanced workflow, and can create the opportunity to make huge savings. Some examples of how ERP systems benefits business include:

  1. Lowering the cost of operations, thanks to the streamlining of company processes.
  1. Improving company insight by making use of real-time information in generated reports.
  1. Optimising efficiency due to a familiar and common user experience across all company processes.
  1. Easier collaboration through the sharing of contracts, purchases, acquisitions, and other important data.
  1. Enhanced security and risk mitigation due to tougher financial controls and better data integrity.

What kind of systems are available?

ERP systems are typically accessible online through cloud-based or internet services. Normally, companies will pay a subscription service in order to access the ERP system. However, this shouldn’t be confused with buying a license or purchasing the software outright. Instead, ERP systems are provided as a service and this is known as a Software as a Service (SaaS) product.

This kind of service is beneficial to businesses as it offers advanced software for an affordable monthly rate. In addition to this, ERP systems are often a scalable solution that can match the needs of your company as you grow or scale back.

With that being said, there are some on premise ERP systems available. These are typically installed on servers that are located physically at your company workplace. This type of arrangement will come with a license that will be sold on a continual basis as opposed to buying it outright.

Where does the future of ERP lie?

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It’s important to remember that while wondering what is an ERP system today, you need to be considering the future too. The most notable change to recently hit the ERP world has been the rapid adoption of the cloud. This is likely to become the only mode for ERP systems and businesses should anticipate this in their future strategies.

Mobile and social media will also become an integral part of how ERP systems operate. Additionally, UI will become less complicated to improve collaboration and make sharing data that much easier. Companies not making the most of the latest innovative ERP systems will likely see their productivity drop over time instead of improving.

Have you still got questions about what an ERP is or anything else? To find out more, head over to the IT Solutions page now. Or, to speak with a member of our team about what is Enterprise Resource Planning, please contact us now.