What Is ERP and How Does It Work?

When you think of your business, worrying about uncertainties is what can keep you awake at night. Learning what ERP is and how does it work could help. Enterprise resource planning refers to a unified platform of software applications.

What is ERP?

Consider enterprise resource planning software (ERP) is a tool that keeps a database of information associated with business processes. It includes anything from human resources to customer relationship management. Still, it’s a lot more than just a database.

Upgrading to an ERP solution permits the automation and integration of business processes that reduce the amount of work that your team needs to perform manually.

The modules that form an ERP system consolidate and unite enterprise operations. Obstacles that existed between departments are soon eliminated, and corporate data are readily available. 

An ERP system’s primary purpose is to simplify and automate the logistics process of daily business operations. A good example would be how ERP expedites a complicated process like order entry.

When sales agents take orders from clients, the ERP system permits them to access credit ratings, customer order history, and inventory. It completely removes the necessity to include the warehouse or finance department, thus eliminating misused time and inefficiencies.

How Does it Work?

An Enterprise Resource Planning, or ERP. This system generally uses the same database throughout an entire company. It is used to store many types of data for different kinds of computerized functions. Initially, they were primarily used by large manufacturing firms. However, now they are beneficial for all sorts of businesses, large and even small ones. 

What Are The Main Features?

The broad diversity of features that are available across software solutions are some of ERP’s key selling points. Some of the tools are only available in specific software options, whereas others are available nearly across the board.
The idea behind ERP is how the different modules interact with each other. It is a must to confirm that an ERP provider includes the primary and specialized features that you need for your business. 

  • Accounting

This module can help reduce the amount of time that your accounting team spends on mundane work. Once you move to an automated and unified accounting system, it will routinely send invoices to customers who have past due balances.
In an instant, the unified solution pulls up the contact details of the customer and the amount owed before sending an invoice. This module’s key features is its ability to calculate profitability, among others.

  • Human Resources

The human resources module aids you in tracking candidate applications, employee PTO and bonus allocations. An example of how this tool connects with other modules is how it can reimburse employees for the PTO remaining at year-end by connecting to your accounting software. 
This function works by automatically looking at remaining PTO days for employees. Then it estimates how much is owed and then uses employee bank account information to submit the payments.

  • Manufacturing

ERP software is amazingly helpful to manufacturing and distribution businesses. These tools can help simplify many facets of the manufacturing process.

  • CRM (Customer Relationship Management)

CRM tools are an excellent way to improve a customer’s relationship with your business. CRM helps assure that their experience with you is perfection. Putting CRM functionality in your ERP assures that both systems are synchronized.

  • Inventory Management

Automated inventory tracking is one of the more common modules of ERP that are requested ERP. This tool can estimate when an item will go out of stock and reorder these products based on this forecast. It may also suggest which inventory products to place next to one another based on customer buying practices. This adds a great deal of simplicity to the distribution system.

How Can You Deploy ERP?

There are primarily two ways to deploy ERP. ERP software can be used through an on-premise installation or as a cloud-based solution. Some ERP providers offer both installation systems. Some even offer a hybrid method, but many providers are starting to move their applications to a cloud-based system only. After determining your business’s particular needs, you will lean toward one method over the others.

During an onsite install, the ERP software is installed on servers your company owns and are maintained by your IT department or staff. One of the primary benefits of an onsite install is the software is available with or without needing an internet connection.

Still, cloud-based software is less costly due to the reduced installation expenses. Expenses related to an onsite installation can be about 25 percent of the price of the software.

How Does ERP Integration Work?

It’s more than certain that your company uses some types of software already in its daily operations. Perhaps QuickBooks for accounting or Salesforce for CRM or others as well. ERP integration permits you to utilize your current software in your new ERP solution so that the modules can work together.

ERP software has diverse uses and is a broadly-implemented solution that many businesses utilize to aid business processes. Due to the range of customization and configuration possibilities, you can modify your ERP solution. ERP can be set to meet your specific needs as well as any for the existing software that you already use. 

By automating the sometimes complicated and often tedious workflows, ERP solutions strive to make your daily workflow a little more manageable. Find out more if you need help deciding whether ERP is right for your business.

Moving Ahead With ERP

There are many providers of ERP Software Solutions that you should review before making a choice. A good one to check out is Tomerlin-ERP if you not sure you check out their website. Make a list of the current software your business utilizes in all departments to make sure the provider you pick can connect all the dots. 

Once you have all the data you need to make an informed choice, prepare all your departments for the upcoming upgrade to be sure they are ready. If you found this post helpful, we have many more on a variety of topics that you may find interesting. Make sure to check them out.