What is ERP software (Enterprise Resource Planning Software) and how to use it? In this article we're trying to answer those questions and also the following:

  • What does ERP software do?
  • What is ERP and how does it work?
  • What is the difference between CRM and ERP?
  • Why should you invest in ERP?
  • What are some examples of ERP software?
  • What is included in ERP?
  • Which ERP software is best?
  • Why should you invest in a cloud-based ERP system?

What is ERP system definition?
The term ERP is an acronym, and it stands for Enterprise Resource Planning. But, even its full name doesn’t shed much light on what ERP is and what it does. Then, what is the most simple ERP definition? The ERP refers to the systems and software used by businesses to manage their day-to-day business activities, such as accounting, manufacturing and project management.

What is ERP software?
The ERP software ties together and defines plenty of business processes and enables the flow of data between them. The ERP system eliminates data duplication and provides data integrity. At its most basic, Enterprise Resource Planning system integrates various features into one complete system to streamline processes and information across the entire organization. With the ERP software, you can manage small or medium-sized businesses, but also enterprises, across industries.

The ERP software has a powerful and strategic business process management tool. It can be used to manage information within a company. The ERP system provides intelligence, visibility, analytics, and efficiency across every aspect of a business. The ERP technology also facilitates the flow of real-time information. Additionally, ERP software can automate your core business processes.

So, What is ERP and how does it work?
The ERP system is a software that connects different features or software into an all-in-one tool for businesses to use. It is easy to use and most importantly saves time when you don’t have to use all the different systems during the day. For example, you’ll have time tracking, project management, invoicing and resource scheduling in one platform, to name a few. The ERP system can be a cloud-based software that can be used wherever you are. Alternatively, it can be a standalone ERP system that is hosted in the company's web servers or a hybrid one. In this article, we mainly focus on cloud-based ERP systems and we will explore their advantages.

What’s the difference between the terms CRM and ERP?
At first glance, Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) seem quite similar, in many ways. They are both used to increase the overall profitability of a business. The systems overlap some areas, and they can be completely integrated into each other. However, when viewed separately it’s easier to see how the CRM and the ERP each play a role in improving efficiency and increasing sales.

Noticeably, the CRM and the ERP software use different approaches to increase profitability. By making business processes more efficient, the ERP reduces the amount of capital spent on those processes. The CRM works to increase profits by producing greater sales volume.

A business can also be using Manufacturing Resource Planning or Material Requirements Planning (MRP). But, be tuned for our upcoming blog posts on these topics, and now let's not make this more complicated.

What is CRM software?
The CRM refers to strategies, tools, and technologies used by enterprises for developing, retaining and acquiring customers. But, What is CRM software?, well the CRM software ensures that every step of the interaction with customers goes smoothly and efficiently in order to increase the overall profits. The CRM software gathers customers’ data from multiple channels. And the best part: all data is safely stored in a unified CRM database. Therefore, users can easily access and manage highly important data via one data source.

When we talk about the CRM we are usually talking about CRM software. The CRM has actually developed to include all areas of the customer experience, keeping the customers happy, and deliver the value to the customers.

What is ERP?
The ERP software is designed to make a company’s processes more effective and efficient. An ERP platform allows the company to focus on what really matters: the data.

While the CRM is focused on the customer, the ERP focuses on the business. The ERP allows for the rapid sharing of standardized information throughout all departments. The ERP software usually includes the followings:
  • CRM or customer relationship management
  • Product and purchase planning
  • Project management
  • Manufacturing and delivery planning
  • Invoicing and billing management
  • Accounting and financial management
  • Sales management 
  • Supply chain management
  • Multiple Branch management
  • File & document sharing
  • Advanced reporting & analytics
What does ERP system do?
The ERP system is designed around a common, defined data structure that usually has a common database. Enterprise Resource Planning system provides access to business data from multiple activities using common constructs, definitions,  and common user experiences. The ERP offers applications and tools that help all areas of a business to communicate with each other more effectively.

The employees in planning and scheduling, for example, have access to the same data as the staff in financial management for their specific needs. All data is available in real-time, which enables employees to make more informed business decisions even faster.

With the ERP software, all vital business functions (estimating, production, finance, human resources, marketing, sales, purchases) share a central source of up-to-the-minute information.

Why should you invest in ERP? What are the advantages of ERP?
It’s impossible to ignore the impact of the ERP in the business world. As business's data and processes are corralled into ERP software, businesses are able to align separate departments and improve workflows. Examples of specific ERP advantages and business benefits include:

Improved business insight - from real-time information generated by reports
Lower operational costs - through defined and more streamlined business processes
Enhanced collaboration - from users sharing data in contracts, requisitions, and purchase orders
Improved efficiency - through a common user experience across many business functions and managed business processes
Consistent infrastructure - from the back office to the front office, all business activities have the same look and feel

High user-adoption rates - from a common user experience and design
Reduced risk - through improved data integrity and financial controls
Lower management and operational costs - through uniform and integrated systems
Most businesses can benefit from ERP software. Every organization manages people, purchases products and services, sells something and accounts for finances. The way each activity is handled varies by industry, but every business performs these basic functions. In most cases, it’s more effective to handle these processes through an integrated software platform than through multiple applications never designed to work together. 

We have prepared a short guide for on how with the usage of an ERP software the business productivity can be boosted by upto 400%.  We strongly suggest you download the free ERP e-guide and take your business operations to next level.