What is ERP? Definition of ERP
ERP stands for Enterprise Resource Planning.
ERP software definition : uERP is a software package or application that automates the management of a company, using the information it gathers from the company’s database. The data comes from the company’s various departments, such as accounting, supply chains, after-sales service, marketing and human resources.
Thanks to the data stored in the ERP system, users and especially managers benefit from a 360-degree view of the situation in their company. You have an overview of all departments, and can therefore create forecasts and analyze different possible scenarios for the company’s development. ERP is used to improve company profitability and user productivity by quickly suggesting all the data needed to make the right decisions.
An ERP is designed to meet the specific needs of a company, and no solution is universal. Many of today’s most successful companies rely on ERP to better anticipate change and adapt as quickly as possible.
Today, ERP software is parameterized and priced according to a company’s needs, so that it can react optimally to its problems. An ERP must be adapted to the type of organization, size and market of the company using it.
One of the best examples of ERP is Sage.
The same ERP can be used differently by different employees within the same company.
Why is ERP important?
ERP systems have become essential for companies wishing to optimize the use of their resources. They can help managers and employees allocate budget and manpower to the most profitable areas of the business. What’s more, ERP saves time and money without sacrificing quality or performance.
Knowing what’s going to happen before it happens is the Holy Grail for all managers. An ERP system makes it possible to anticipate future market developments and easily coordinate company staff. Users have real-time access to stock, sales and delivery levels, and can, for example, quickly order new stock to meet new demand. Communication is also improved, with all departments having access to the same information, making exchanges much easier. What’s more, all ERP signals go in the same direction, and employees use the same system, so they can better understand changes and the direction they need to take.
ERP also makes it quick and easy to format collected data to create analysis reports, tables and graphs that illustrate the current situation of the company and the market. This simple transfer of information is invaluable to managers when they decide to use an ERP system.
Why use ERP?
ERP can be used for a number of purposes. Ideally, an ERP is adapted to the type of organization, size and market of the company using it.
Generally speaking, it enables the company to identify areas for improvement.
The aim of an ERP system is to bring together all the information and data relevant to the company in a central location, making it easier to manage relations with the various stakeholders.
An ERP must be adapted to the type of organization, size and market of the company using it.
How does ERP work?
An ERP system collects company data. Information integrated by one department is immediately available to all other company users. By sharing data, all users have access to the same information and keep it on the same page.
What’s more, this software package or application makes it easy to compare two locations. This can give decision-makers a better understanding of why one site performs better than another, and how they can change the way they do things to improve efficiency at both sites.
ERP offers maximum benefits if the company correctly allocates modules to departments and ensures data capture. Of course, it’s useless without data. The more stakeholders involved in using the software, the better the result.
How do I use ERP?
ERP enables the company to identify areas for improvement and the various possibilities.
All company employees need to have access to the system for maximum data collection and optimum efficiency.
ERP can be used in many different ways, depending on the departments using it and the business purpose.
Who uses ERP?
All companies in all markets can use ERP. It adapts to the company’s situation and is therefore highly flexible and malleable. However, you need to choose the right ERP.
Within the company, it is used by all employees. The more data an ERP system collects, the better its performance.
Departments that use ERP are generally, but not limited to :
The HR Department
ERP enables the HR department to keep track of all employee information and current company trends. An HR department can quickly find information such as an employee’s salary, history, benefits entitlements and much more. The human resources department can help business owners more easily and better.
Accounting and finance department
ERP software enables accounting and finance departments to track and report all company-related financial information and transactions. It enables them to convert this information into revenue, expense and cash flow forecasts, so that they can better anticipate changes.
The supply chain
ERP enables the supply chain to guarantee a smooth, continuous flow of goods and raw materials between all parties involved. This helps to optimize inventories, prioritize orders, minimize lead times, avoid supply chain interruptions, and identify the best and least efficient processes.
The marketing department
ERP enables marketing departments to increase productivity and allocate resources to the right places, with an overview of which processes are really efficient and which are less so. ERP software can also automate prospect and lead management, so by managing interactions and sending the right signals at the right time, marketing teams can win more customers. Automating channels by automatically managing e-mails, ads and social media represents a considerable time-saver for this department. Reducing costs while improving conversions is the goal of ERP for the marketing department.
How do you choose the right ERP?
No ERP is universal.
All ERPs are different, and all serve different purposes. The features that are important to you may not be important to a different market and a different size of company.
You need to carry out an analysis of your needs and objectives to determine which features and options best match your company’s management vision. Once you’ve understood your needs and objectives, you need to make sure that the ERP software really does match your vision.
What are your employees looking for?
Although the software you’ve found is a perfect match for your vision, you need to think about your employees, who will be using ERP software every day. There’s no point in paying for ERP if nobody wants to use it.
We recommend that you choose an ERP system that is easy to use and suitable for your entire team. Adoption and user experience are paramount. If your employees don’t use the software, you won’t be able to make informed decisions, because they’re based on only part of the data.
Having users test ERP software before adopting it is the best way to understand their expectations and challenges. What’s more, the companies who publish the software for you can usually modify it to suit the needs of their teams. Don’t hesitate to send them your questions.
Free trial periods enable you and your teams to find out whether the proposed solution is right for you. You can always refuse to accept the service if the test phase is unsuccessful, and try another ERP.
Anywhere, anytime?
ERP systems may offer the option of cloud Saas (online storage from a server), which means that the software is stored online, so you can access it over the Internet with your login details.
This makes it easily accessible from a new device or location. No more trips to the office to update your contact details!
If you have an ERP application on your phone, you can access it from anywhere, at any time, to see the information that’s most important to you.
What are the advantages of ERP?
A global view
ERP software enables you to collect all information in one place and receive precise reports on company activities. This business insight facilitates decision-making and helps you to move in the right direction.
Monetary benefits
ERP can save a company money in many ways. Automate repetitive, time-consuming tasks and improve them at the same time. The information it provides enables you to identify expenses that can easily be reduced.
Data prevention and storage
ERP providers understand the crucial importance of data for businesses and therefore take storage measures to prevent data loss. Saas Cloud ERP systems use the latest security protocols to keep your data safe. Storing data in the cloud also prevents employees from losing their data because it is misfiled or simply lost.
Association
Since all employees can access the same information in real time, collaboration is much more efficient. They can talk about the same data and exchange it more easily, keeping pace with the company’s evolution thanks to the ERP system.
Scalability
A good ERP system will easily adapt to changes in the company using it. Adding new employees or opening new departments is very simple. ERP systems located in the Saas cloud adapt more easily to all small and large operational changes, even if the amount of data and the number of employees increase.
Elasticity
While ERP software helps companies adopt best business practices, it also supports company-specific objectives and methods. Different departments can use it as they see fit.
What are the disadvantages of ERP?
Training
ERP is a complex piece of software that needs to be learned. There are many different tools available for many different departments. It’s essential that a company’s employees master the management of ERP software in order to use it as effectively as possible and collect as much data as possible.
Does not apply solutions
Although an ERP system can find faults in the sales and marketing process, it will not implement all the solutions it proposes. Employees must implement the solutions offered by the ERP software, and cannot solve problems on their own.
Let's sum up the essentials!
ERP is essential for companies that collect data from many different departments.
An ERP must be adapted to the type of organization, size and market of the company using it.
ERP is useless without data; persuading employees to use it is essential.
ERP software can be installed directly on the PC or in the SaaS cloud.