What Is ERP?

Every business owner wants to grow their business and connect better. Every one of them wants to manage their business in a short period of time. If you are one of those business owners, you may have heard of this term. But what does it exactly stand for? Is it software? Is it easier than dealing with spreadsheets? We will guide you through the details, usage, benefits, and types of it. What Is ERP? Let’s find out.

What Is an ERP System?

ERP stands for Enterprise Resource Planning. This system enables the management of a structure or a company’s resources. It enables organizing and managing information. It gives you the chance to save both time and money. The system manages the company’s business process in a modular approach. It brings together many modules such as production, finance, human resources, distribution, procurement, and sales within a single system. It has evolved over the years and turned into a more technological, up-to-date system. The modules have several functionalities for every industry. It serves differently for each department. Here are some of them:

Types of ERP

Since this system started in the 1990s, several types have come until today. Let us look at these types and what their features are.

Cloud

Cloud is a system that allows the provider to access their ERP via the Internet. It enables you to connect to your customers through a portal. It is flexible and mobile. Cloud can be customized compared to on-premises ERP. And it is a more affordable option for ERP because you will not need any software and hardware or IT staff. Plus, you only need to pay for the required computing resources. As you need to pay a certain monthly rate, it gives you the opportunity to improve your business in other areas.

Cloud enables businesses of all sizes and any industries to make cost savings. It helps improve business insight and makes it possible to enhance collaboration. Cloud is secure against viruses. Besides, you do not need to use any license in the future. If you want your business to increase efficiency, Cloud is what you need.

On-Premise

An on-premise system is a traditional system that small and mid-size businesses generally use. On-premise software is installed locally on the company’s computers and servers. You need to pay a one-time license fee, along with some other recurring fees. Therefore, you can consider on-premise as capital investment. On-premise ERPs are easier to customize which is a super advantage for businesses with unique purposes.

One minor disadvantage of on-premise is that a great deal of responsibility falls on the staff in terms of data safety. To avoid cybercrime, IT staff needs to be capable of securing sensitive information. Another disadvantage of on-premise is that mobile accessibility may be a bit tricky. It requires a mediator between the mobile device and the on-premise. Also, on-premise may take longer to implement.

Hybrid

If you cannot decide between cloud-based and on-premises , hybrid may be the one you are looking for. Some companies prefer to use hybrid when they have been using an on-premise system so that they can add new functions to their current system. There are many advantages of using hybrid:

• While using your on-premise system, you can access the new features for a vying advantage.
• There are many industry-focused or areal cloud solutions you can choose from. Some industries, especially digital media, prefer newer cloud solutions. However, areal units may choose long-established systems. So, hybrid may meet the requests of both.
• Hybrid lowers the cost. Also, it can improve cash flow as it eliminates the need for capital investment.
• You may use hybrid ERP to test cloud systems before using it entirely in your company.

How to Choose Your ERP System

A lot of business owners consider using ERP. When they check the ERP market, they come across a lot of options. Each ERP system is optimized to support different phases of a business and then to meet the needs of the organization.  In the past, large businesses preferred to use on-premise ERP systems. They dealt with lots of resources and then various modules. For small to mid-sized businesses meeting the specific needs of the company was enough.

 Today, the company size is the least important factor. Addressing the requirements of business effectively is the main determinant. Check if the ERP system meets your company’s requirements as well as goals. Make sure it is compatible with your current system. Moreover, make certain that the ERP system adapts itself to new and changing technology.

Improve Your Business

No matter how small your business is, you can use ERP system and then improve your company. Here are some benefits of ERP:

• Cost Savings: When you have a central database, it is easier to manage your time carefully. As a result, your staff can become highly productive and work with fewer resources.
• Improved Business Insight: With your central database, you can make easier decisions using only one source of data and then get faster with your work.
•  Risk Management: With safety regulations of ERP, you can maintain compliance in every process. ERP also provides additional tools to reduce risk.
• Satisfied Customers: ERP enables the companies to satisfy their customers by providing client-based products through CRM (Customer Relationship Management).

Do I Need to Use an ERP System?

If you are experiencing the problems below in your business, then you should consider using an ERP system.

• Your current system is not functioning efficiently.
• Your current system does not support the growth of your company
• The system does not provide data security
• You use manual processes a lot and, as a result, it consumes your time
• One cannot manage inventory, satisfy your clients, or keep the track of the costs
• You miss opportunities trying to run your business
• IT processes are too complex

FAQs on the ERP System

Which industries can use ERP?

Any industry can use an ERP system to work more efficiently. Some industries that use ERP system are: manufacturing, distribution, etc.

Is ERP Expensive?

In the past, only large companies had the chance to purchase ERP
systems as they were highly expensive. Today, ERPs still require a certain amount of investment, but it has become much more affordable thanks to technology. The cost of ERP systems varies depending on the modules, the company’s needs, and the customer profile. Once you specify your company’s needs, it will be easier to check the benefits as well as features of each ERP system and choose.

What are the key features of ERP systems?

There are a few key features of ERP systems that make them an essential part of businesses. A common database, consistent UX (user experience) and UI (user interface), business process integration, data analysis, and automation.

What is the difference between single-tenant and multi-tenant Cloud?

Single-tenant Cloud serves only one customer. Every customer has their own database and instance of the software. However, in a multi-tenant Cloud, there are multiple customers. Every customer shares the software and also the database.

Do I have to follow a plan to implement ERP?

Preparation is the key. There are seven key stages of ERP implementation. Discovery and planning, evaluation and selection, design, development, testing, deployment, and support. If you follow this checklist, you will be good to go.

Conclusion on ERP

We have guided you through all the details you need to know about ERP systems. Make sure that you consider the options above carefully. If you want your business to grow and adapt to the new technology, it is the way to go. If you want your customers to be happy, you should consider ERP. Before you go, we would like to tell you about another topic. We believe it is inseparable with the corporate world: SQL servers.

The post What Is ERP? is republished from Dopinger Blog