What is an ERP System / ERP Software

What is an ERP System / ERP Software?

Tuesday June 13, 2023 | Posted at 9:30 am | By Harriet Pritchard
June 13, 2023 @ 9:30 am

When you’re running a business, maintaining visibility across your business processes is a top priority (just above remembering to eat, just below keeping your head from exploding).

Considering the average person receives 120 work emails per day – one every four minutes of working hours – it’s not surprising that there is rarely enough time to keep track of the inner workings of every department. The day-to-day running of a business requires active attention, and overseeing every detail is no easy task.

Losing site of business processes leaves business vulnerable to costly and ineffectual internal structures. Many businesses opt to alleviate the stress of system management by adopting an ERP software.

What Does ERP Stand For?

ERP stands for Enterprise Resource Planning. The resources being referred to here are the core business processes required to run a business. Therefore, the literal meaning of ‘enterprise resource planning’ is the organisation of a company’s internal systems.

What is an ERP System?

A completed jigsaw where all the pieces fit together

When we consider any business, we recognise similar components that require internal systems. ERP software refers to these components as modules. Some of the typical modules an ERP system might include:

  • Sales
  • HR
  • Accounting
  • Distribution
  • Procurement
  • Customer service
  • Production

ERP software integrates the business processes of these modules into one unified system. This provides full internal visibility of business operations across each area of the business. The objective of an ERP system is to streamline businesses by automating certain processes across different departments.

ERP software centralises processes across a business to enable full visibility and enhanced efficiency.

Things to Consider When Choosing an ERP System

A big question mark formed of greenery

Every business is unique – what is vital for one business may be uneconomical for another.

Many ERP systems incorporate a vast number of modules and can cater for huge corporations. This broad encompassing software is indispensable for conglomerates and large-scale organisations. When it comes to small to midsized businesses, many of these offerings can be unnecessary. For example, an expensive, fully integrated, and optimised HR system is essential when you have thousands of employees spanning five continents – however, much less relevant when you have 20 employees within a 15-mile radius.

These largescale ERP systems improve cost efficiency for big business but are a costly extravagance for businesses that do not require the same bells and whistles. Businesses on a smaller scale are likely to require a more agile, customisable software that suits their financial positioning.

Our eBook Buying Multichannel Ecommerce Software explores in more depth the key considerations all businesses should think about before investing in integration software to simplify their business processes.

Get in touch if you’d like to find out more about choosing an ERP system.

Explore more News and Views