What is ERP (Enterprise Resource Planning)?(What is, Concept and Definition)

Short for Enterprise Resource Planning , ERP is a business system that integrates multiple applications related to accounting, human resources, inventory, ordering, shipping, and services.Systems ERP has been in wide use since the early 1990s and is under the umbrella of business applications, as larger companies often use it, however there are also less complicated versions for small business of ERP software.

Types of ERP systems

Today, many ERP systems ( ERP suites ) run in the cloud as SaaS (Software as a Service).A ERP in the cloud makes it easier and safer for companies to manage their information.These systems can be maintained by a company that specializes in maintaining servers and databases, keeping them secure, and can facilitate scaling as your business grows.

For companies that cannot or do not want their data in the cloud, local ERP can run in a company's data center.Alternatively, a company can have a Hybrid ERP that runs some of your cloud systems and other systems on premises.

Examples of ERP systems

Below are some examples of ERP systems that can be implemented in a business.

Why would you need ERP?

For a company or business, having ERP helps to bring all the information and tasks of your company to a central location.For example, a company can manage its accounting in a program like QuickBooks, customer data in a CRM, Ordering in a custom program and creating reports in Excel.Each of these products are information silos that do not communicate with each other.Requiring your employees to use each of these systems separately makes them inefficient, increases operating costs, presents Problems and makes it difficult to find business information.An ERP brings together separate entities into a single system, providing increased efficiency for employees and the business, and can help reduce overall operating costs.

What is the difference between a CRM and an ERP?

A CRM often only deals with the interaction between your business and your customers.A CRM can help automate, rationalize, and track those interactions with your customers.However, an ERP goes beyond just handling the tasks of the customer.customer and you can incorporate your employees, money, manufacturing, distribution and even your CRM systems into a single central system.Small businesses may only need one CRM system as they are more affordable and do not have enough systems that need to communicate between Yes, however, large companies and companies need ERP to stay competitive and operate efficiently.

How do ERP systems work?

An ERP system is designed using a collection of ERP modules ( ERP applications ) that are designed to meet a specific part of a company's needs.Each of ERP modules communicate with each other by sharing a central database.For example, a business can start with an ERP system that has HR, inventory, finance, and sales modules to help manage their business.As the business grows And if you have new or increased needs, these modules can be further customized with additional modules.

What are the advantages of ERP systems?

A properly designed and integrated ERP system that stores and shares all company information has the following advantages.

• Help automate and streamline many processes, increasing the overall productivity of your company and employees.


• Helps manage finances and taxes, and saves money for the business.


• Easier to manage all aspects of your supply chain.


• Improve collaboration between all departments and employees.


• Allow your business to do more.


• Improved analytics that can give you better business intelligence across all aspects of the business in one place.


• Allows for better capabilities of reports.

What are the disadvantages of ERP systems?

Some argue that ERP is an absolute requirement for a company.However, there are still downsides to implementing ERP.

• It has a high cost of implementation.


• It can be difficult to implement and bypass existing systems.


• Requires retraining of all employees.


• ERP modules may be too generic for some companies and require additional modules or modules customized for specific business needs.