Are you asking, “What is ERP and how does it work?” Read this article to for a simple guide to ERP and how it works for companies.
When it comes to understanding ERP, there’s a lot to parse.
That’s because there are many websites out there that try to answer the question “what is ERP, and how does it work?” And much of that information can be contradictory, or else the sheer noise is just too confusing.
Let’s cut through the din, take a look at ERP basics, and see how it can change your business for the better. With that in mind, we’ve put together a simple guide to ERP so you can see why it’s the next big thing in business solutions.
What Is ERP, and How Does It Work?
So what is ERP? It stands for Enterprise Resource Planning, but that probably doesn’t clear things up all that much for you.
Let’s dig a little further. ERP software acts rather like a central nervous system for all the core activities of a business. This includes supply chain operations, manufacturing, inventory management, human resources, procurement, risk management, and much else.
In essence, ERP software knits these various functions together into a seamless whole, automating and simplifying them to streamline operations. The advantages to a business are obvious: now the left-hand does know what the right hand is doing, and operations are greatly improved.
Enterprise Resource Planning connects every facet of a business. It eliminates redundancy and wasted effort, and human resources are better allocated.
So How Does ERP Work?
ERP systems are all about resource management and utilization.
ERP software collects and collates data from across a company’s various departments and sections. From these data, the software generates reports on the health of the different departments.
An ERP system typically involves:
- A shared database that can be accessed by different business departments
- An integrated, company-wide system
- An identical user interface operating across all applications
- Real-time operations
- Different hosting options, including onsite, software-as-a-service (SaaS), and cloud-based
Also, it’s always a good idea to consider hiring ERP consultants to implement your software. For instance, see here for consultants experienced in implementing Epicor ERP software.
How Can ERP Benefit Companies?
Simply put, ERP systems can help businesses grow. Whether a massive corporation or a struggling startup, ERP helps every type of business handle the inevitable challenges that crop up.
Here are a few of the main benefits of ERP software:
- Cost Savings—as a result of better productivity, a business will quickly begin to realize more cost savings after adopting ERP systems
- Better Business Insight—the real-time, company-wide feedback leads to better decision making
- Improved Collaboration—with all employees and departments working from the same database and using the same information, everyone’s using the same playbook
- Manage Compliance—ERP software makes it much easier to monitor regulatory compliance
ERP Is the Future of Business Management
So if you’ve been asking yourself “what is ERP and how does it work?”, this is what it boils down to- Enterprise Resource Planning is just a fancy name for the integration and automation of a business’ multifarious operations.
Expect to hear more about ERP in the future, as businesses move to streamline their operations. And if you’d like to learn more about the latest developments in the worlds of business and finance, be sure to check out the rest of our blog.
