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Enterprise Resource Planning (ERP): Meaning, Components, and Examples

example of enterprise resource planning

What Is Enterprise Resource Planning (ERP)?

Enterprise resource planning (ERP) is a platform companies use to manage and integrate the essential parts of their businesses. Many ERP software applications are critical to companies because they help them implement resource planning by integrating all the processes needed to run their companies with a single system.

An ERP software system can also integrate planning, purchasing inventory, sales, marketing, finance, human resources, and more.

Key Takeaways

  • ERP software can integrate all of the processes needed to run a company.
  • ERP solutions have evolved over the years, and many are now typically web-based applications that users can access remotely.
  • Some benefits of ERP include the free flow of communication between business areas, a single source of information, and accurate, real-time data reporting.
  • There are hundreds of ERP applications a company can choose from, and most can be customized.
  • An ERP system can be ineffective if a company doesn't implement it carefully.

Investopedia / Joules Garcia

Understanding Enterprise Resource Planning (ERP)

You can think of an enterprise resource planning system as the glue that binds together the different computer systems for a large organization. Without an ERP application, each department would have its system optimized for its specific tasks. With ERP software, each department still has its system, but all of the systems can be accessed through one application with one interface.

What Does ERP Do?

ERP applications also allow the different departments to communicate and share information more easily with the rest of the company. It collects information about the activity and state of different divisions, making this information available to other parts, where it can be used productively.

ERP applications can help a corporation become more self-aware by linking information about production, finance, distribution, and human resources together. Because it connects different technologies used by each part of a business, an ERP application can eliminate costly duplicates and incompatible technology. The process often integrates accounts payable, stock control systems, order-monitoring systems, and customer databases into one system.

How Does It Work?

ERP has evolved over the years from traditional software models that made use of physical client servers and manual entry systems to cloud-based software with remote, web-based access. The platform is generally maintained by the company that created it, with client companies renting services provided by the platform.

Businesses select the applications they want to use. Then, the hosting company loads the applications onto the server the client is renting, and both parties begin working to integrate the client's processes and data into the platform.

Once all departments are tied into the system, all data is collected on the server and becomes instantly available to those with permission to use it. Reports can be generated with metrics, graphs, or other visuals and aids a client might need to determine how the business and its departments are performing.

A company could experience cost overruns if its ERP system is not implemented carefully.

Benefits of Enterprise Resource Planning

Businesses employ enterprise resource planning (ERP) for various reasons, such as expanding, reducing costs, and improving operations. The benefits sought and realized between companies may differ; however, some are worth noting.

Improves Accuracy and Productivity

Integrating and automating business processes eliminates redundancies and improves accuracy and productivity. In addition, departments with interconnected processes can synchronize work to achieve faster and better outcomes.

Improves Reporting

Some businesses benefit from enhanced real-time data reporting from a single source system. Accurate and complete reporting help companies adequately plan, budget, forecast, and communicate the state of operations to the organization and interested parties, such as shareholders.

Increases Efficiency

ERPs allow businesses to quickly access needed information for clients, vendors, and business partners. This contributes to improved customer and employee satisfaction, quicker response rates, and increased accuracy rates. In addition, associated costs often decrease as the company operates more efficiently.

ERP software also provides total visibility, allowing management to access real-time data for decision-making .

Increases Collaboration

Departments are better able to collaborate and share knowledge; a newly synergized workforce can improve productivity and employee satisfaction as employees are better able to see how each functional group contributes to the mission and vision of the company. Also, menial and manual tasks are eliminated, allowing employees to allocate their time to more meaningful work.

ERP Weaknesses

An ERP system doesn't always eliminate inefficiencies within a business or improve everything. The company might need to rethink how it's organized or risk ending up with incompatible technology.

ERP systems usually fail to achieve the objectives that influenced their installation because of a company's reluctance to abandon old working processes. Some companies may also be reluctant to let go of old software that worked well in the past. The key is to prevent ERP projects from being split into smaller projects, which can result in cost overruns.

Employing change management principles throughout the ERP life cycle can prevent or reduce failures that compromise full implementation.

Some familiar names are leaders in ERP software. Oracle Corp. ( ORCL ) originally supplied a relational database that integrated with ERP software developed by SAP ( SAP ) before entering the broader enterprise market in a big way in the early 2000s. Microsoft ( MSFT ) has long been an industry leader, with many customers using multiple software applications from the company.

As cloud-based solutions have grown in popularity in recent years, the traditional ERP industry leaders have seen challenges from upstarts such as Bizowie and Workwise.

ERP Examples

Fulton & roark.

Men's grooming product maker Fulton & Roark successfully implemented enterprise resource planning to better track inventory and financial data. Like many other businesses, the North Carolina company used spreadsheets to track inventory and accounting software to record financial data.

As the company grew, its processes lagged. Their antiquated inventory tracking system did not account for changing costs, and the accounting software could not record the metrics needed for key financial statements. These breakdowns created manual processes, which further compromised time and resources.

To eliminate unnecessary processes and centralize work, they chose the Oracle NetSuite ERP system. Immediately, Fulton & Rourk was better able to identify accounting errors related to inventory, eliminate costs from employing third parties to evaluate their financial records, and better report financial positions.

Cadbury, a global confectioner and maker of the popular chocolate Cadbury egg, also successfully implemented an ERP system. The company had thousands of systems but could not keep pace with its rapid growth and used ineffective warehouse management systems.

It implemented a system that integrated its thousands of applications, standardized processes, and restructured warehouse management systems—breaking down silos for seamless, integrated coordination of work.

What Is the Importance of Enterprise Resource Planning?

Enterprise resource planning software offers single-system solutions that integrate processes across the business. These applications allow users to interact within a single interface, share information, and enable cross-functional collaboration. They increase productivity, collaboration, and efficiency.

What Are the 5 Components of ERP?

The components of an ERP system depend on the organization's needs. However, there are key features that each ERP should include. Generally, packages include finance, human resource, logistics and manufacturing, supply chain management, and customer relationship management.

What Are the Types of ERP?

Generally there are three deployment options for ERP systems; Cloud-based, on-premise, and a hybrid of the two. Within these options, a business can choose from hundreds of types such as finance, supply chain management, and human resource management.

What Are the 2 Main ERP Applications?

Which ones are the main applications depends on the business and the industry it operates in. Most companies can benefit from supply chain management, logistics, and financial applications to help them streamline their operations and expenses.

Enterprise resource planning (ERP) manages and integrates business processes through a single system. With a better line of sight, companies can better plan and allocate resources. Without ERP, companies tend to operate in silos, with each department using its own disconnected system.

ERP systems promote the free flow of communication and sharing of knowledge across an organization, the integration of systems for improved productivity and efficiencies, and increased synergies across teams and departments. However, moving to an ERP system will be counterproductive if the company's culture does not adjust to the change and the company does not review how the structure of its organization can support it.

Oracle. “ Oracle for SAP Technology Update ,” Page 42.

Microsoft. “ Annual Report 2021 .”

Workwise. “ About Us .”

Bizowie. “ A Different Kind of Enterprise Software Company .”

Oracle NetSuite. “ Fulton & Roark .”

Oracle NetSuite. “ 3 Successful ERP Implementation Case Studies .”

Microsoft. “ Mondelēz International Moves to Microsoft Azure for Great SAP Performance and AI Innovation .”

SAP. “ How Does Support From a Dedicated Engagement Team Accelerate Digital Transformation? ,” Page 3.

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  • Enterprise Resource Planning (ERP)

What is ERP?

  • What is cloud ERP?
  • Benefits of ERP
  • Replacing legacy ERP
  • Evaluating ERP software
  • ERP implementation best practices

Enterprise resource planning (ERP) is a software system that helps you run your entire business, supporting automation and processes in finance, human resources, manufacturing, supply chain, services, procurement, and more.

  • ERP definition in detail

ERP stands for enterprise resource planning, but what does ERP mean? The simplest way to define ERP is to think about all the core business processes needed to run a company: finance, HR, manufacturing, supply chain, services, procurement, and others. At its most basic level, ERP helps to efficiently manage all these processes in an integrated system. It is often referred to as the system of record of the organization.

Yet today’s ERP systems are anything but basic and have little resemblance to the ERP of decades ago. They are now delivered via the cloud and use the latest technologies – such as artificial intelligence (AI) and machine learning – to provide intelligent automation, greater efficiency, and instant insight across the business. Modern cloud ERP software also connects internal operations with business partners and networks around the world, giving companies the collaboration , agility, and speed they need to be competitive today.

Table of Contents

Why is ERP important?

Erp examples in different industries, how do erp systems work, common erp modules.

Types of ERP deployment

ERP integration

The total cost of erp.

  • History  and the  future of ERP

10 things to look for in an ERP system

Erp at any size: what are my options.

Sometimes described as “the central nervous system of an enterprise,” an ERP software system provides the automation, integration, and intelligence that is essential to efficiently run all day-to-day business operations. Most or all of an organization’s data should reside in the ERP system to provide a single source of truth across the business.

Finance requires an ERP to quickly close the books. Sales needs ERP to manage all customer orders. Logistics relies on well-running ERP software to deliver the right products and services to customers on time. Accounts payable needs ERP to pay suppliers correctly and on time. Management needs instant visibility into the company’s performance to make timely decisions. And banks and shareholders require accurate financial records, so they count on reliable data and analysis made possible by the ERP system.

The importance of ERP software to businesses is illustrated by the growing adoption rate. According to  G2 , “The global ERP software market is projected to reach US$78.40 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026.”

Discover why an ERP system is so important.

Six key benefits of ERP

A good ERP system offers many advantages — which can vary depending on how the system is deployed. The  benefits of cloud ERP , for example, are different than on premise. That said, there are six major benefits that apply to all modern ERP solutions:

  • Higher productivity: Streamline and automate your core business processes to help everyone in your organization do more with fewer resources.
  • Deeper insights: Eliminate information silos, gain a single source of truth, and get fast answers to mission-critical business questions.
  • Accelerated reporting: Fast-track business and financial reporting and easily share results. Act on insights and improve performance in real time.
  • Lower risk: Maximize business visibility and control, ensure compliance with regulatory requirements, and predict and prevent risk.
  • Simpler IT: By using integrated ERP applications that share a database, you can simplify IT and give everyone an easier way to work.
  • Improved agility: With efficient operations and ready access to real-time data, you can quickly identify and react to new opportunities.

Businesses in every industry – from automotive to wholesale distribution – need accurate, real-time information and effective business processes to compete and thrive. Different industries rely on their ERP software for quite different reasons, however. Here are just a few examples:

  • Utilities need to constantly review their capital assets, not only to meet demand for future services but also for the replacement of aging assets. Without ERP, the effort to prioritize these major asset investments would be difficult and error prone. ERP also helps solve another critical utility company issue: forecasting of spare parts. Not having the right parts during an outage can create a significant customer service issue. On the other hand, having too many spare parts means excessive costs and out-of-date stock.
  • For wholesalers , importers, direct store delivery, and 3PL/4PL firms, on-time delivery is key. All of these organizations want to reduce distribution costs, increase inventory turns, and shorten order-to-cash time. To achieve these goals, they need integration of inventory management, purchasing, and logistics functionality, as well as automated processes that are customized to their needs.
  • Discrete, batch, and continuous process manufacturers all rely on ERP and supply chain systems to meet product quality goals, manage asset utilization, control overtime costs, handle customer returns and more. Manufacturers can also gain end-to-end inventory control by monitoring stock movements, pinpointing top and underperforming products, and managing procurement more efficiently.
  • Service companies – including accounting, tax, engineering, IT, legal, and other professional services firms – require powerful, real-time mobile ERP technology to balance service delivery commitments with financial health. Key to professional service success is the ability to stay on schedule while managing project profitability, resource utilization, revenue recognition, recurring revenue objectives, and growth opportunities.
  • Retail has undergone a significant transformation now that e-commerce has merged with other sales channels as well as brick-and-mortar operations. The ability to provide self-service options for identifying, configuring, purchasing, and shipping products is dependent on integrated data. A modern ERP also helps retailers reduce cart abandonments, improve Web site conversions, boost average order value, and increase customer lifetime value.

An  ERP system  – also called an ERP suite – is made up of integrated modules or business applications that talk to each other and share common a database.

Each ERP module typically focuses on one business area, but they work together using the same data to meet the company’s needs. Finance , accounting, human resources , sales, procurement , logistics , and supply chain are popular starting points. Companies can pick and choose the module they want and can add on and scale as needed.

ERP systems also support industry-specific requirements, either as part of the system’s core functionality or through application extensions that seamlessly integrate with the suite.

ERP software can be bought using a cloud subscription model (software-as-a-service) or a licensing model (on premise).

The ERP software system shown here illustrates enterprise resource planning use cases for sourcing and procurement, as well as sales. Typical ERP modules also address finance, manufacturing, and supply chain, among other applications.

Enterprise resource planning systems include a variety of different modules. Each ERP module supports specific business processes – like finance, procurement, or manufacturing – and provides employees in that department with the transactions and insight they need do their jobs. Every module connects to the ERP system, which delivers a single source of truth and accurate, shared data across departments.

Components of an enterprise resource planning system

The most widely used ERP modules include:

  • Finance:  The finance and accounting module is the backbone of most ERP systems. In addition to managing the general ledger and automating key financial tasks, it helps businesses track accounts payable (AP) and receivable (AR), close the books efficiently, generate financial reports, comply with revenue recognition standards, mitigate financial risk, and more.
  • Human resources management:  Most ERP systems include an HR module that provides core capabilities such as time and attendance and payroll. Add-ons, or even entire human capital management (HCM) suites, can connect to the ERP and deliver more robust HR functionality – everything from workforce analytics to employee experience management.
  • Sourcing and procurement:  The sourcing and procurement module helps businesses procure the materials and services they need to manufacture their goods – or the items they want to resell. The module centralizes and automates purchasing, including requests for quotes, contract creation, and approvals. It can minimize underbuying and overbuying, improve supplier negotiations with AI-powered analytics, and even seamlessly connect with buyer networks.
  • Sales:  The sales module keeps track of communications with prospects and customers – and helps reps use data-driven insights to increase sales and target leads with the right promotions and upsell opportunities. It includes functionality for the order-to-cash process, including order management, contracts, billing, sales performance management, and sales force support.
  • Manufacturing:  The manufacturing module is a key planning and execution component of ERP software. It helps companies simplify complex manufacturing processes and ensure production is in line with demand. This module typically includes functionality for material requirements planning (MRP), production scheduling, manufacturing execution, quality management, and more.
  • Logistics and supply chain management:  Another key component of ERP systems, the supply chain module tracks the movement of goods and supplies throughout an organization’s supply chain. The module provides tools for real-time inventory management, warehousing operations, transportation, and logistics – and can help increase supply chain visibility and resilience.
  • Service:  In an ERP, the service module helps companies deliver the reliable, personalized service customers have come to expect. The module can include tools for in-house repairs, spare parts, field service management, and service-based revenue streams. It also provides analytics to help service reps and technicians rapidly solve customer issues and improve loyalty.
  • R&D and engineering:  Feature-rich ERP systems include an R&D and engineering module . This module provides tools for product design and development, product lifecycle management (PLM), product compliance, and more – so companies can quickly and cost-effectively create new innovations.
  • Enterprise asset management: Robust ERP systems can include an EAM module – which helps asset-intensive businesses minimize downtime and keep their machines and equipment running at peak efficiency. This module includes functionality for predictive maintenance, scheduling, asset operations and planning, environment, health and safety (EHS), and more.

Modern ERP systems can be deployed in a number of ways: in a public or private cloud, on premise, or in various hybrid scenarios that combine environments. Here are some of the high-level benefits of each to help you identify the  ERP deployment option  that makes the most sense for your business.

With  cloud ERP , the software is hosted in the cloud and delivered over the Internet as a service that you subscribe to. The software provider generally takes care of regular maintenance, updates, and security on your behalf. Today, cloud ERP is the most popular deployment method for many reasons – including lower upfront costs, greater scalability and agility, easier integration, and much more.

On-Premise ERP

This is the traditional model for deploying software where you control everything. The ERP software is typically installed in your data center at the locations of your choice. The installation and maintenance of the hardware and software is your staff’s responsibility.

Many companies are modernizing and upgrading their on-premise ERP systems to cloud deployments. This requires careful planning of your  ERP upgrade  as well as a thoughtful process of  evaluating ERP software  and  deployment options .

For companies that want a mixture of both to meet their business requirements, there is the  hybrid cloud ERP  model. This is where some of your ERP applications and data will be in the cloud and some on premise. Sometimes this is referred to as  two-tier ERP .

ERP for finance can help you manage your daily accounting and financial close processes securely, regardless of your deployment approach.

Today’s ERP systems provide an enormous range of business functionality, but they still need to connect to and synchronize with other applications and data sources – such as CRM and HCM software, e-commerce platforms, industry-specific solutions, and even other ERPs. With ERP integration , companies can gain a unified view of information from different systems, increase business process efficiency, improve customer experiences, and facilitate collaboration across teams and business partners.

Modern ERP systems are open and flexible – and can easily integrate with a wide range of software products using connectors or customized adaptors, such as application programming interfaces (APIs). Other methods for ERP integration include ESB (enterprise service bus) and iPaaS (integration platform-as-a-service). iPaaS, which offers a cloud-based approach, is a very popular option for modern businesses.  iPaaS platforms  can rapidly sync on-premise or cloud-based ERP with SaaS applications from the same vendor or third-parties. They typically require little-to-no coding, they’re flexible and relatively inexpensive, and they offer a whole host of other uses – such as automatic API generation, machine learning data integration, Internet of Things (IoT) network integration, prebuilt content, and more.

The cost of ERP depends on the software vendor, the modules selected, and the deployment method. Generally speaking, cloud-based ERP has lower costs than on-premise ERP because there is no hardware that needs to be purchased – and no expensive in-house IT experts that need to be hired. The vendor handles the maintenance and charges the customer an annual or monthly subscription fee, usually based on the number of users.

When  calculating the return on investment (ROI) and total cost of ownership (TCO)  of a new ERP implementation, the initial and ongoing workforce costs are just as important as the software selection and deployment costs. With cloud and hybrid options, new factors must be evaluated. For example, software maintenance, facility, computer capacity, downtime, recovery, security, privacy, and IT staff costs are all important considerations. As mentioned, cloud options significantly reduce both capital and operating costs – improving both ROI and TCO.

ERP history: The rapid evolution of ERP

Computerized business applications were born in the accounting and finance world in the 1960’s using mainframe computers. These pioneering applications were faster and more accurate than manual processes – but were expensive, limited in functionality, and still slow. Before long, these applications spawned the development of dedicated, standalone solutions such as sales order processing and manufacturing requirements planning ( MRP ).

In the mid 1980’s, competition in the manufacturing sector was exploding and new tools were required. New MRP II software integrated accounting and finance, sales, purchasing, inventory, and manufacturing planning and scheduling – providing the manufacturer with an integrated system.

Near the end of the 1990’s, ERP was introduced. ERP transformed the technology sector by serving a broader range of industries and by combining MRP II, human resources, project accounting, and end-user reporting.

In the short span of the 21st century, faster Internet speeds and new development tools have again revolutionized ERP suites. The introduction of browser-based software paved the way for  cloud ERP software , a breakthrough that has expanded both the reach and the functionality of ERP solutions.

Today – in the era of digital transformation – modern ERP systems are increasingly taking advantage of new intelligent technologies such as AI, machine learning, robotic process automation (RPA), the IoT, natural language processing (NLP), and in-memory databases. They provide businesses with the ability to run even more efficient processes, leverage up-to-the-minute insights from both transactional and unstructured data, and ultimately remain competitive in a time of unprecedented change.

The future of ERP

Digital transformation is speeding up – and ERP is at the core. As enterprises adopt digital technologies in every part of the business, they are fundamentally changing the way they operate.

According to  Gartner , one of the core digital business accelerators is to “banish drags” – in other words, eliminate any negative force that slows the business down, including outdated processes and systems. So, it’s not surprising that companies are already demanding more robust ERP systems.

Following are three major trends that build on the momentum we see today:

  • Cloud, cloud, cloud:  Preference for cloud ERP will continue to intensify as more and more companies discover the benefits – including “anywhere” access, reduced cost of hardware and technical support, greater security, and integration with other systems, to name just a few. According to Panorama Research in their  2020 ERP Report , “More than half of organizations are selecting cloud software (63%) instead of on-premises software (37%).” As the speed of business continues to accelerate, cloud becomes even more essential.
  • Vertical integration:  The tug of war between best-of-breed solutions and integrated ERP is officially over. Going forward, we believe that companies will demand the best of both worlds – a fully integrated ERP system with vertical extensions. This allows companies to get the specific functionality they need, without painful integration issues or data locked in information silos. We also see the shift toward ever greater flexibility, as business processes are tailored to individual company needs.
  • User personalization:  Staff, customers, and suppliers all want content and functionality that matches their specific needs or interests and makes them more productive. The changing demographics of the workforce, particularly in industries such as manufacturing, are also driving interest in low-code, no-code platforms. These platforms allow users to get the experience they want, rather than having to adapt to the software. Users can also expect customized dashboards, AI-driven search, personalized chat, and personalized workflows across devices.

Explore more  ERP technology trends  – and learn how to systematically evaluate your options, avoid pitfalls, and get started with the right innovations for your business.

Any modern ERP system will have a long list of capabilities based on the industry they serve and the modules they offer. However, there are 10 fundamental features that all enterprise resource management systems should have:

  • A common database:  Centralized information and single version of the truth – providing consistent, shared data and a cross-functional view of the company.
  • Embedded analytics:  Built-in analytics, self-service BI, reporting, and compliance tools that can deliver intelligent insight for any area of the business.
  • Data visualization:  Visual presentation of key information with dashboards, KPIs, and point-and-click analytics to assist in quick and informed decision-making.
  • Automation.  Automation of repetitive tasks as well as advanced RPA powered by  AI  and  machine learning .
  • Consistent UI/UX:  The same look and feel across modules – as well as easy-to-use configuration and personalization tools for processes, users (including customers and suppliers), business units, locations, and product lines, for example.
  • Integration:  Seamless integration of business processes and workflows – as well as open and easy integration with other software solutions and data sources, including from third parties.
  • New technologies:  Support for AI and machine learning, digital assistants, the  IoT , RPA , security and privacy, and mobile.
  • Technology platform:  A fast, proven, and stable  technology stack  for this long-term investment – including a  low-code/no-code platform , iPaaS, data management, and more.
  • Multinational support:  Including for languages, currencies, and local business practices and regulations – as well as technical support for cloud services, training, help desk, and implementation.
  • Choice of deployment:  Cloud, on-premise, or hybrid.

ERP isn’t just for global enterprises. ERP solutions are designed for businesses of all sizes – small, midsize, and large. You can also get industry- and company-specific functionality to meet unique business needs. Regardless of your business sector and size, you’ll want to plan your  ERP implementation  project carefully, following best practices.

Small business ERP

ERP software for small businesses  can help you move beyond spreadsheets and efficiently manage every aspect of your growing company – from sales and customer relationships to financials and operations. Small business ERP tools are typically in the cloud, quick to install, and designed to grow with you.

Mid-Market ERP

Today, ERP software designed for mid-market companies and subsidiaries benefit from built-in analytics, rapid deployment, and best practices for dozens of different business processes – financials, HR, supply chain management, and more.  Midsize ERP tools  help growing businesses scale and compete, even with limited resources. Modular,  cloud-based enterprise ERP systems  are also a popular choice for midmarket companies with complex processes or plans for rapid growth.

Enterprise ERP

Large companies with global or subsidiary operations need a robust,  market-leading ERP system  with embedded AI, machine learning, and analytics – and intelligent automation to transform business models and processes. ERP systems can be deployed on premise, in the cloud, or in a hybrid scenario depending on business need. They can integrate with existing databases or, ideally, run on newer, powerful  in-memory databases .

Many companies are modernizing and upgrading their on-premise ERP systems to cloud deployments. This requires careful planning of your  ERP upgrade , as well as an  ERP evaluation  and review of your  deployment options .

What is an ERP software system?

An  ERP software system  is a set of integrated applications or modules for managing a company’s core business processes – including finance and accounting , supply chain , HR , procurement , sales, inventory management, and more. ERP modules are integrated into one complete system and share a common database to streamline processes and information across the enterprise. Businesses can expand the scope of their ERP as they grow.

What is ERP cloud software?

Cloud ERP is the deployment of ERP in the cloud rather than on premise. The cloud provides an ideal environment for ERP as it is an accessible, reliable, secure, and highly scalable platform for mission-critical software. True cloud ERP software is developed specifically for cloud deployment and takes full advantage of the cloud environment. Learn more about  cloud ERP  and  ERP deployment options .

What is ERP in accounting?

In accounting, the acronym ERP stands for enterprise resource planning – which is a type of business management software.  ERP finance modules  offer many of the same features as accounting software, such as tools for accounts receivable and payable, general ledger, expense management, reporting and analysis, and more. In addition to finance, ERP includes modules for different lines of business, such as supply chain and HR, and integrates everything together in a single system.

How do I know I'm ready for an ERP system?

Most businesses start out using a variety of simple, standalone tools to manage different business processes – such as QuickBooks or Excel spreadsheets. Here are five signs you’ve outgrown them and need a modern  ERP system .

  • You’re spending more time on daily activities.  If it’s taking longer to manage key activities, like closing the books, too many disparate applications may be to blame. ERP software integrates solutions and data into one system with a common interface, making it easier for business units to communicate and do their jobs effectively.
  • You have many unanswered business questions.  Can you easily answer important questions about your business, such as revenue per product line or number of returns? If not, segregated systems and a lack of access to metrics and KPIs may be holding you back. Enterprise resource planning software is designed to address these challenges.
  • You have runaway business processes.  Are there areas where your processes are getting away from you? Maybe it’s harder for you to manage inventory, satisfy customers, or keep costs in check. If so, your business processes may need to be restructured to accommodate growth or changing priorities – a natural fit for ERP software.
  • You have manual processes with multiple data sets.  Are most of your departments using their own applications and processes to get things done? If so, chances are you’re spending too much time on duplicate data entry. When information can’t flow between systems, reporting takes longer, errors happen often, and decision-making is hampered.
  • You’re missing out on fast-moving opportunities.  Are you spending so much time running your business that you can’t pursue exciting new opportunities? Newer ERP systems include advanced, intelligent capabilities, like machine learning and predictive analytics, that make it easier to identify and capitalize on profitable new ventures.

Explore ERP software

No matter what your size, SAP has an ERP solution for your business needs.

Essential ERP for growing companies

Explore trends, user guides, and expert advice in this 3-part ERP miniseries.

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Enterprise resource planning—Overview

Definition of enterprise resource planning (erp), what is an erp system, what’s the difference between erp and financials, erp fundamentals, the business value of erp, a brief history of erp, erp deployment models: from on-premises to the cloud, cloud erp—a new erp delivery model, 7 reasons to move to an erp cloud solution.

  • Get started with ERP

Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting , procurement , project management , risk management and compliance , and supply chain operations . A complete ERP suite also includes enterprise performance management , software that helps plan, budget, predict, and report on an organization’s financial results.

ERP systems tie together a multitude of business processes and enable the flow of data between them. By collecting an organization’s shared transactional data from multiple sources, ERP systems eliminate data duplication and provide data integrity with a single source of truth.

Today, ERP systems are critical for managing thousands of businesses of all sizes and in all industries. To these companies, ERP is as indispensable as the electricity that keeps the lights on.

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Cloud ERP for Dummies

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How can these solutions manage organizations day-to-day business activities, such as accounting, finance, procurement, project management, supply chain, and manufacturing.

Enterprise resource planning systems are complete, integrated platforms, either on-premises or in the cloud, managing all aspects of a production-based or distribution business. Furthermore, ERP systems support all aspects of financial management, human resources, supply chain management, and manufacturing with your core accounting function.

ERP systems will also provide transparency into your complete business process by tracking all aspects of production, logistics, and financials. These integrated systems act as a business's central hub for end-to-end workflow and data, allowing a variety of departments to access.

ERP Systems and software support multiple functions across the enterprise, mid-sized, or small businesses, including customizations for your industry.

Although the term “financials” is often used when describing ERP software, financials and ERP are not the same thing. Financials refers to a subset of modules within ERP .

Financials are the business functions relating to the finance department of an organization and includes modules for financial accounting, subledger accounting, accounting hub, payables and receivables, revenue management, billing, grants, expense management, project management, asset management, joint venture accounting, and collections.

Financials software uses reporting and analytical capabilities to comply with the reporting requirements of governing bodies, such as the International Financial Reporting Standards Foundation ( IFRS ), Financial Accounting Standards Board (FASB) for Generally Accepted Accounting Principles in the United States (GAAP), as well as for other countries (HGB in Germany and PCG in France, for example).

For public organizations, financials software has to be able to produce periodic financial statements for governing regulators, such as the US Securities and Exchange Commission ( SEC ) (with reports such as quarterly 10-Q and annual 10-K), European Securities and Markets Authority ( ESMA ), and others. For these types of financial reports, a narrative reporting tool is used. The person who is ultimately responsible for financials is the CFO.

While financials handles one area of the business, ERP encompasses a wide range of business processes—including financials. ERP software can include capabilities for procurement , supply chain management , inventory, manufacturing, maintenance, order management, project management, logistics, product lifecycle management, risk management , enterprise performance management (EPM), human resources/human capital management .

ERP also integrates with front-office applications to build holistic views of customers, including customer relationship management ( CRM ) solutions. Additionally, cloud-based ERP applications are often embedded with next-generation technologies, such as the internet of things (IoT), blockchain, AI, machine learning, and digital assistants. These advanced technologies deliver data and capabilities that not only enhance many traditional ERP functions; they create new opportunities for increased efficiencies, new services, and deeper insight across an enterprise. Since ERP systems are comprehensive across an enterprise, their management often involves a partnership with the CFO as well as the CIO, COO, and other key executive leaders.

Cloud-based ERP applications are often embedded with next-generation technologies, such as the internet of things ( IoT ), blockchain , AI, machine learning, and digital assistants.

ERP systems are designed around a single, defined data structure (schema) that typically has a common database. This helps ensure that the information used across the enterprise is normalized and based on common definitions and user experiences. These core constructs are then interconnected with business processes driven by workflows across business departments (e.g. finance, human resources, engineering, marketing, and operations), connecting systems and the people who use them. Simply put, ERP is the vehicle for integrating people, processes, and technologies across a modern enterprise.

See how industry analysts compare Oracle Cloud ERP against other financial management software providers.

For example: consider a company that builds cars by procuring parts and components from multiple suppliers. It could use an ERP system to track the requisition and purchase of these goods and ensure that each component across the entire procure-to-pay process uses uniform and clean data connected to enterprise workflows, business processes, reporting, and analytics.

When ERP is properly deployed at this automotive manufacturing company, a component, for example, “front brake pads,” is uniformly identified by part name, size, material, source, lot number, supplier part number, serial number, cost, and specification, along with a plethora of other descriptive and data-driven items.

Since data is the lifeblood of every modern company, ERP makes it easier to collect, organize, analyze, and distribute this information to every individual and system that needs it to best fulfill their role and responsibility.

ERP also ensures that these data fields and attributes roll up to the correct account in the company’s general ledger so that all costs are properly tracked and represented. If the front brake pads were called “front brakes” in one software system (or maybe a set of spreadsheets), “brake pads” in another, and “front pads” in a third, it would be tough for the automotive manufacturing company to figure out how much is spent annually on front brake pads, and whether it should switch suppliers or negotiate for better pricing.

A key ERP principle is the central collection of data for wide distribution. Instead of several standalone databases with an endless inventory of disconnected spreadsheets, ERP systems bring order to chaos so that all users—from the CEO to accounts payable clerks—can create, store, and use the same data derived through common processes. With a secure and centralized data repository, everyone in the organization can be confident that data is correct, up-to-date, and complete. Data integrity is assured for every task performed throughout the organization, from a quarterly financial statement to a single outstanding receivables report, without relying on error-prone spreadsheets.

Trending in modern finance

The ERP landscape has shifted with the rapid evolution of software as a service (SaaS) cloud applications. Because of the mobile platforms and decentralized workforce–work anywhere and anytime–ERP systems can no longer be tied to yesterday’s on-premises back-office applications. The next-generation, cloud-based, and modern ERP solutions support the new industry dynamics while providing the ability to reduce support time to enable organizations to respond quickly to volatile markets and industry trends.

It’s impossible to ignore the impact of ERP in today’s business world. As enterprise data and processes are corralled into ERP systems, businesses can align separate departments and improve workflows, resulting in significant bottom-line savings. Examples of specific business benefits include:

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

From paper cards to mobile devices The history of ERP goes back more than 100 years. In 1913, engineer Ford Whitman Harris developed what became known as the economic order quantity (EOQ) model, a paper-based manufacturing system for production scheduling. For decades, EOQ was the standard for manufacturing. Toolmaker Black and Decker changed the game in 1964 when it became the first company to adopt a material requirements planning (MRP) solution that combined EOQ concepts with a mainframe computer.

MRP remained the manufacturing standard until manufacturing resource planning (called MRP II) was developed in 1983. MRP II featured “modules” as a key software architectural component, and integrated core manufacturing components including purchasing, bills of materials, scheduling, and contract management. For the first time, different manufacturing tasks were integrated into a common system. MRP II also provided a compelling vision of how organizations could leverage software to share and integrate enterprise data and boost operational efficiency with better production planning, reduced inventory, and less waste (scrap). As computer technology evolved through the 1970s and 1980s, concepts similar to MRP II were developed to handle business activities beyond manufacturing, incorporating finance, customer relationship management, and human resources data. By 1990, technology analysts had a name for this new category of business management software—enterprise resource planning.

ERP's past: 1990s to the new millennium From the 1990s until the beginning of the twenty-first century, ERP adoption grew rapidly . At the same time, the costs of implementing an ERP system began to climb. The hardware required to run the software was typically on company premises, with big machines in a server room. Both the hardware and the software licenses required capital investments and depreciated over 5 to 10 years. In addition, organizations nearly always wanted to customize their ERP systems to fit their specific needs, entailing an additional expense of software consultants and training.

Meanwhile, ERP technology was evolving to embrace the internet, with new features and functionality such as embedded analytics. As time went on, many organizations discovered that their on-premises ERP systems couldn’t keep up with modern security demands or emerging technologies such as smartphones.

Software-as-a-service (SaaS) Enter the cloud—specifically, the software-as-a-service (SaaS) delivery model for ERP. When ERP software is delivered as a service in the cloud, it runs on a network of remote servers instead of inside a company’s server room. The cloud provider patches, manages, and updates the software several times a year—rather than an expensive upgrade every 5 to 10 years with an on-premises system. The cloud can reduce both operational expenses (OpEx) and capital expenses (CapEx) because it eliminates the need for companies to purchase software and hardware, or hire additional IT staff. These resources can instead be invested in new business opportunities, and the organization is always up-to-date on the most recent ERP software. Employees can shift their focus from managing IT to more value-added tasks such as innovation and growth.

For businesses of all sizes, including enterprise and small to midsize , retiring on-premises systems and moving entirely to the cloud all at once isn’t possible. Or, at the very least, it’s not something they’re comfortable doing within a short development window. Meanwhile, staying the course with an on-premises ERP, ignoring all the advantages of enterprise resource planning as a cloud solution, is no longer an ideal path, either. Why should you consider using cloud applications to replace or augment your on-premises system?

1. Readily adopt new and evolving SaaS technologies

Next-generation technologies, like artificial intelligence (AI), help cloud-based systems rapidly improve their capabilities with no need for periodic updates, unlike your legacy system. Now, with no additional or new input from the end-user, ERP systems continually become significantly easier to manage and use.

2. Extend the value of your existing ERP System

Augmenting and integrating legacy software with cloud applications can complement, enhance, and supplement important tasks. This approach can breathe new life into legacy ERP systems, giving businesses a great opportunity to start adopting cloud capabilities.

3. Access new technologies

Finding cloud applications that complement your legacy ERP software modules lets you immediately take advantage of rapidly advancing new technologies and improving user paradigms. These provide complimentary systems that deliver immediate business capabilities and value without a fundamental change in your operations.

4. Reduce third-party dependencies

Reporting and analytics for legacy systems typically require involvement from a third-party vendor to generate operational business intelligence. Using cloud applications from your legacy ERP vendor often produces the same or better intelligence without needing an additional vendor relationship.

5. Evolve your financial systems

Legacy systems were never meant to be modern reporting engines. Cloud-based technology was born in the last decade and developed, as a core principle, with an entirely different mindset and understanding of not only what was possible but what was needed to be successful for ERP platforms.

6. More robust security resources

Cloud solution service providers have large, full-time teams that are exclusively dedicated to proactively monitoring and staying current with cloud security issues and threats, 24 hours a day.

7. Attract in-demand talent

The next generation of young workers have grown up with seamless technology that is mobile, easy to use, and always-on. No company that continues to rely purely with on-premises technology will be able to recruit top talent, regardless of age.

Get started with Oracle ERP

Organizations have always struggled to balance traditional ERP’s high costs and complexity against the need for customized features and flexibility, all while meeting the demands of the business. Watch and learn how Oracle ERP Cloud delivers connected teams, unified data, and real-time insights to help you and your finance team ensure that the best business decisions are made. With ERP delivered as a service in the cloud, your organization can be future-ready and outpace change.

example of enterprise resource planning

One of the benefits of the SaaS model is that the software is kept up-to-date with the latest features, functions, and best practices. Cloud ERP providers roll out updates regularly (as often as monthly, in Oracle’s case). This means that the latest new and revolutionary emerging technologies—such as AI, digital assistants, machine learning, blockchain, augmented reality, and the Internet of Things (IoT)—become available to subscribers on a regular cadence.

With access to these new technologies, organizations can quickly improve their business best practices as the ERP software evolves. They can automate processes that used to require heavy manual intervention, such as reconciling financial accounts. In addition, users gain a comprehensive, real-time understanding of enterprise business activities not only in the front office, but also in warehouses, on factory floors, and everywhere else across the enterprise. This knowledge is then readily available to every appropriate employee on their mobile devices, including smartphones and tablets.

Built for the digital age, today’s ERP cloud embraces mobile, social, analytics, and the latest emerging technologies. Anything less won’t move an organization forward.

What is ERP in simple terms? ERP stands for enterprise resource planning. It’s a software system that includes all the tools and processes required to run a successful company, including HR, manufacturing, supply chain, finance, accounting, and more.

What are the 3 common types of ERP? The three most common types of ERP are on-premises, cloud-based, and hybrid ERP. An on-premises ERP system is run on-location on a company’s servers, while cloud-based ERP operates on a third-party, remote server. Hybrid ERP is a mix of both, often with an on-premises ERP at headquarters and cloud-based ERP systems at subsidiaries.

What is an example of ERP? One example of ERP is industry-specific ERP systems that meet the specific requirements for those business types and offer industry-specific capabilities like materials planning and specialized manufacturing records management. Because these systems offer such tailored features, businesses don’t have to do too much customization or integrate with many other external tools.

Learn more about Oracle Cloud ERP

A woman and three men standing in an office looking at a display on a wall, seen from behind

Enterprise resource planning (ERP) is a business management software system that is designed to manage and streamline an organization’s functions, processes and workflows with automation and integration.

A term coined by  Gartner in the 1990s  (link resides outside ibm.com), an ERP software system is designed to manage all parts of a business—finance, HR, manufacturing, supply chain, services, procurement,  supply chain management , product lifecycle management, project management and more—which makes it an essential part of an organization’s daily operations. ERP software consists of business applications that are all connected and share one common database, therefore decreasing the number of resources necessary to run the business end to end.

The business applications, known as enterprise modules, each focus on a specific business area but work together to meet the company’s needs. Since businesses range in size and needs and no two are alike, modules are not a one-size-fits-all approach. A company can pick and choose which modules are best suited for their business.

The best way an enterprise resource planning system can deliver the most value is when a company takes advantage of modules for each business function. By having a central location for all business data, ERP implementation cuts out the silos that complicate data collection and create data duplication challenges for many businesses. The new system (the ERP model) serves as a single-source-of-truth software solution.

ERP software systems come in three different forms:

- A cloud subscription model ( software as a service )

- A licensing model (on premises)

- A hybrid model

Read on for more detail on these three systems and the different modules commonly available with an ERP software management system.

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There are three types of ERP software systems: onsite systems, cloud-based systems and hybrid systems. They all differ from one another and have their advantages and disadvantages, depending on business needs and ERP approach. Any of these enterprise resource planning software systems can help a company in decision-making and profitability.

Onsite ERP:  This software, also referred to as on-premises ERP, is deployed onsite and is mostly controlled in-house, or by the company’s enterprise. A business would choose this option if the business wanted to be in total control of the ERP software and security. If you are to choose this ERP software option, it would require a dedicated IT resource on-premises to handle the technical and application maintenance.

Cloud-based ERP:  The cloud-based ERP system, often referred to as software-as-a-service or SaaS, means that a third party is managing the ERP software in the cloud. Using technologies such as  artificial intelligence  (AI) and  machine learning , this flexible option system can provide greater automation efficiencies and allow employees to search through organizational data on any device through the internet. IBM®, Infor, Microsoft, Oracle and SAP offer new ERP solutions.

This is a popular model for ERP software due to its scalability, agility and lower cost. The main disadvantage is the security risk that you take when trusting an ERP vendor. The data for your business is sensitive and requires careful handling.

Hybrid ERP:  This system is for companies looking for characteristics of both an onsite and SaaS model to meet their business requirements. In this model, some of the ERP applications and data will be on the cloud and some are on premises. This can sometimes be referred to as a two-tier ERP.

ERP systems are based on various different modules that are there to support specific business processes. There are a select number of modules that are foundational to an ERP system and there are third-party applications to access additional features. Some of the most popular modules are listed below and give you deployment options.

Finance and accounting:  The finance and accounting module is often most important to many ERP systems. The main purpose of this module is to help businesses understand their financial outlook and analyze the whole business. The main features of this module are tracking accounts payable (AP) and accounts receivable (AR), while also closing the books efficiently and generating financial reports and pricing. This module can automate tasks related to billing and stores crucial financial information for your business, such as vendor payments, cash management and account reconciliation. It also provides clear metrics to a company and can aid in production planning operations.

Procurement:  The procurement module, or purchasing module, helps businesses source materials and services they need to manufacture their goods. This module helps automate purchasing, along with tracking and analyzing any incoming quotes. With the procurement module, companies can maintain a list of vendors and tie suppliers to certain items, which can in turn forsters good supplier relationship.

Manufacturing:  The manufacturing module, often referred to as a manufacturing execution system, is a vital planning and execution component to ERP software. The module helps manufacturers plan out production and secures everything needed for production. A manufacturing module can update the status of goods-in-progress, along with providing real-time information for items in progress or finished goods. The module also typically includes material requirements planning (MRP) solutions, which was the original manufacturing system of toolmaker Black and Decker. 1

Sales:  The sales module is responsible for keeping an open line of communication to customers and prospective customers. It can use data-driven insights to increase sales and make targeted decisions and assist with invoicing when it comes to promotions or upselling opportunities. Other features, including supply chain solutions, offer helpful inventory management and order management include dashboards, greater business intelligence and Internet of Things (IoT) technology.

Customer relationship management:  The  customer relationship management  (CRM) module, or service module, helps companies deliver exceptional service. By storing customer information, such as previous calls, emails and purchase history, a business has the data it needs to better serve current and future customers. This module makes it easy for staff to access the required information when a customer comes in and sees that staff create a customer-specifc experience thanks to the data saved from the ERP software.

Human resources management:  The human resources module maintains basic capabilities, such as time, attendance and payroll. This module maintains data on all employees and stores documents that pertain to each of those employees, such as a performance review or job description. If a company wants, it can have an entire  human capital management  (HCM) suite and connect it to ERP to deliver even stronger HR functionality. 

While stand-alone accounting software and ERP software do present similarly, the two systems are different. It comes down to what each software system can do and cover. Accounting software typically covers financial reporting, accounts payable and receivable, banking and basic sales revenue information.

Meanwhile, modern ERP software includes a wide range of modules that can reach every aspect of your business. Accounting is just one module in a long list of other features that ERP technology can provide. The ERP software is built for industry-specific requirements and can be molded to fit almost any company’s needs.

Accounting software has other limitations in terms of sales, customer relationship management and real-time data accessibility. The ERP software has modules specific to sales management and isn’t siloed to what accounting software can do. ERP integrates all financial information into one database and can be done in the cloud for easy accessibility.

If your small business is expanding rapidly, it may outgrow traditional accounting software and the business may want to seek out accounting data in one software package, such as ERP. Having all its data centrally located is key for small and big businesses to gain insights and having a multitude of modules available through an ERP software can help you as your business changes.

The benefits of ERP are wide-ranging, with the most prominent being increased productivity, reduced operational cost, flexibility and integrated information. The business intelligence ERP deployment offers is much more substantial than traditional accounting software offerings.

The need for accurate, real-time data is essential to almost every business, no matter the industry. Here are some businesses that rely on ERP solutions.

Utilities:  A utility company is constantly reviewing its capital assets. Therefore, organizing such assets  without ERP  can be challenging. The ERP software can also help utility companies forecast demand for future services and replace aging assets.

Service companies:  Companies such as accounting, tax, engineering and other professional service firms require ERP software that is powerful and delivers real-time data when needed. Professional service businesses can’t afford to experience delays. ERP software helps them stay on schedule and reduce cost and resource utilization.

Wholesalers:  For most wholesaler and importer businesses, reducing distribution costs and increasing inventory are two key elements of success. The best way to keep a business in order and running efficiently is through ERP software with modules customized to its needs. With it, wholesalers can get a handle on inventory management, purchasing and general logistics for their business.

Retailers:  A lot of purchasing is done online thanks to e-commerce and other sales channels, which have changed the retail landscape substantially in recent years. Retail businesses are dependent on integrated data as they need ERP software to provide self-service options to customers. The ERP solutions can assist with purchase orders and warehouse management. Retailers can also benefit from ERP to boost their customer return rate and improve webite conversions.

IBM Consulting® helps you successfully migrate legacy ERP applications to the cloud, redesign processes to leverage data, AI and automation and transform finance into a competitive advantage within your business.

For nearly four decades, IBM is one of the most significant Oracle partners. IBM offers Oracle services and consulting to clients that includes a roadmap for each stage of their cloud transformation investment, from consulting to cloud implementation to management.

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Learn how leaders and other companies are using the Salesforce platform in this IBM Institute for Business Value survey.

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Successfully migrate legacy ERP applications to the cloud and redesign processes to leverage data with IBM Consulting.

Reduce costs and increase agility with cloud managed services for SAP applications by supporting and optimizing underlying operational functions.

IBM Consulting is the driving force behind your business transformation journey. Together with strategic partners and service providers, IBM Consulting helps businesses migrate legacy ERP applications to the cloud and redesign processes to use data, AI and automation, all to help clients meet their business goals.  

1   MRP, JIT, OPT, FMS?  (link resides outside ibm.com), Harvard Business Review, September 1985

What Is Enterprise Resource Planning (ERP): Meaning, Components, and Examples

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What is dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602235"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602235" data-dropdown-placement-param="top" data-term-id="275602235">enterprise resource planning (ERP) 

ERP is a dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602270"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602270" data-dropdown-placement-param="top" data-term-id="275602270">software system that dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602237"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602237" data-dropdown-placement-param="top" data-term-id="275602237">automates dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602278"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602278" data-dropdown-placement-param="top" data-term-id="275602278">business management . dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP software is made up of integrated dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602241"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602241" data-dropdown-placement-param="top" data-term-id="275602241">modules that incorporates all fundamental dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602238"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602238" data-dropdown-placement-param="top" data-term-id="275602238">business processes and provides a single source of truth to keep your company running effectively across different business units. These processes include dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602252"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602252" data-dropdown-placement-param="top" data-term-id="275602252">material requirements planning (MRP) , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602260"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602260" data-dropdown-placement-param="top" data-term-id="275602260">project management , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602253"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602253" data-dropdown-placement-param="top" data-term-id="275602253">inventory management and purchase, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602301"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602301" data-dropdown-placement-param="top" data-term-id="275602301">warehouse management , sales and marketing, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602248"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602248" data-dropdown-placement-param="top" data-term-id="275602248">procurement , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602239"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602239" data-dropdown-placement-param="top" data-term-id="275602239">human resource and finance management, and many more dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602247"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602247" data-dropdown-placement-param="top" data-term-id="275602247">business functions .

dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP software and solutions also provide analytics and visual reports to present dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602254"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602254" data-dropdown-placement-param="top" data-term-id="275602254">real-time data from all levels of your business, assisting you, as a business owner to better understand your company’s performance. As a result, with a single system in place, even dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602257"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602257" data-dropdown-placement-param="top" data-term-id="275602257">small businesses can simplify IT systems, better manage operations, lower risks, and make informed timely decisions.

ERP fundamentals: what does an ERP do?

When putting ERP in the context of running your business, you want to save time to focus on the value-added tasks to strategise and grow your business. But more often than not, your time is spent tracking down files, sorting dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602250"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602250" data-dropdown-placement-param="top" data-term-id="275602250">workflows , searching for updated information, and being stuck in meetings. 

With the advent of cloud computing and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602303"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602303" data-dropdown-placement-param="top" data-term-id="275602303">software-as-a-service ( dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602261"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602261" data-dropdown-placement-param="top" data-term-id="275602261">SaaS ) models, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602243"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602243" data-dropdown-placement-param="top" data-term-id="275602243">ERP solutions have become more affordable and accessible to SMEs. Today, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP software is one of your business basic needs to run your business effectively and get ready for expansion and growth.

How does an ERP work?

dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP software collects all your business data into a centralised system for easy access to dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602237"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602237" data-dropdown-placement-param="top" data-term-id="275602237">automate processes, enable seamless management across all departments and even provide business insights.  

But before you jump right in, the first step for you to take is to determine the pain points of your business. Ask yourself, how do you want this system to enhance your day-to-day operations? How do you ensure your employees are cooperative in adopting the new systems? What are some of the expected investments needed and are there returns in the long run?

example of enterprise resource planning

When considering the implementation of an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP system , you need to identify their dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602299"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602299" data-dropdown-placement-param="top" data-term-id="275602299">business requirements and  choose an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP  dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602291"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602291" data-dropdown-placement-param="top" data-term-id="275602291"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240">software dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602291" data-dropdown-placement-param="top" data-term-id="275602291"> dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602291"> solution that meets your dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602274"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602274" data-dropdown-placement-param="top" data-term-id="275602274">specific needs . To help you with your first step, keep reading to get some insights on how dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP software is integrated into the following industries - 

Malaysia’s home-bred aviation company – Air Asia took a bold step and made a move from traditional spreadsheet analysis and paper-based purchasing by migrating to an ERP system. During its growth stage, AirAsia expanded across Southeast Asia and leveraged the latest technologies to compete on price and services. The airline utilised ERP software to integrate consumer insights when strategising for business growth by riding on features such as mileage program management for customers, fuel-cost accounting, forecasting routes and more! Through that, the airline was able to determine key drivers of profitability and with that insight, planned its next steps for business expansion accordingly.

Western Digital’s merger with SanDisk and HGST back in 2019 is an interesting case study on how three companies’ operations integrated seamlessly through a centralised ERP system. An effective ERP software enabled them to handle cost management, streamline payroll among the three businesses, strategise and plan effectively to integrate operations after the merger and to top it all off, the ERP system allowed them to simplify IT systems and have an overview of all operations with an automated reporting system through a comprehensive dashboard. As a result, the system integration between the three businesses was a breeze.

Food & Beverage (F&B)

If you’re   a player in the F&B industry, perhaps you can learn a few things about how Baskin Robbins successfully introduced an effective ERP system into their day-to-day operations. Previously, the ice cream chain didn’t have a web-based PO system with paper-driven purchase activities, despite having over 100 stores across various states in Malaysia. After adopting effective ERP software, Baskin Robbins effectively managed its operations across various sites and provided its management with better visibility of its operations through real-time data. This allowed them to better pinpoint focus areas and challenges to address, thus, opening new doors for operational efficiency and growth. 

These are great success stories, but remember, there is really no such thing as a one-size fits all ERP software. Note that all ERP software requires some level of customisation to fit your unique requirements in order to get effective consumer insights and operate seamlessly with your nature of business. 

example of enterprise resource planning

The business value of ERP:10 benefits of ERP

From the examples above, you can now see that adopting ERP comes with many benefits. Not only it’s for big corporations, but ERP is also worth investing in when you are a growing and expanding dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602257"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602257" data-dropdown-placement-param="top" data-term-id="275602257">small business . So why is ERP important? Let’s explore some of the dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602259"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602259" data-dropdown-placement-param="top" data-term-id="275602259">benefits of ERP :

Optimise cost control through full visibility and traceability

Typically, an ERP provides you with a dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602276"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602276" data-dropdown-placement-param="top" data-term-id="275602276">dashboard overview of your dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602295"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602295" data-dropdown-placement-param="top" data-term-id="275602295">business operations , saving you time and effort simply to find information and allowing you to better manage costs.

Enhance efficiency and increase business productivity

ERP boosts your business’ productivity through the dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602237"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602237" data-dropdown-placement-param="top" data-term-id="275602237">automation of repetitive tasks, therefore, freeing up your employee’s time to work on other meaningful tasks. Additionally, by dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602237"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602237" data-dropdown-placement-param="top" data-term-id="275602237">automating dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602293"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602293" data-dropdown-placement-param="top" data-term-id="275602293">core  dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602238"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602238" data-dropdown-placement-param="top" data-term-id="275602238"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602293" data-dropdown-placement-param="top" data-term-id="275602293"> dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602293">business processes , an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP system can help SMEs reduce errors, improve efficiency, and lower costs.

Easier access and mobility

ERP software delivered through cloud-enhanced web or mobile applications allows you easier access to management systems, anytime, anywhere.

Improve business decision-making

dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602288"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602288" data-dropdown-placement-param="top" data-term-id="275602288">ERP  dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602241"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602241" data-dropdown-placement-param="top" data-term-id="275602241"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602288" data-dropdown-placement-param="top" data-term-id="275602288"> dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602288">modules , such as the dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602280"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602280" data-dropdown-placement-param="top" data-term-id="275602280">general ledger , can help SMEs improve their dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602298"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602298" data-dropdown-placement-param="top" data-term-id="275602298">financial reporting and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602297"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602297" data-dropdown-placement-param="top" data-term-id="275602297">metrics , allowing them to make better-informed decisions about their business. Also, consumer insights remove guesswork and enable you to make fact-based, data-driven decisions.

Better dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602249"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602249" data-dropdown-placement-param="top" data-term-id="275602249">customer relationship management (CRM)

dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602302"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602302" data-dropdown-placement-param="top" data-term-id="275602302">Modern  dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602302" data-dropdown-placement-param="top" data-term-id="275602302"> dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602302">ERP dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> systems also offer dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602262"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602262" data-dropdown-placement-param="top" data-term-id="275602262">e-commerce capabilities, allowing SMEs to manage their online sales and customer relationships more efficiently.

Boost business scalability and flexibility

ERP allows you to personalise and customise your systems to meet specific demands. This means that an ERP can readily adjust to your company's growth and expansion as well.

Centralise systems with live reporting to keep up to date

ERP reporting ensures that you always have the latest real-time info at hand. 

Improve customer relationships through efficient management

ERP stores all your customer information, allowing you to provide customers with quick fixes and a more individualised experience based on past information.  

Enhance data security and   greater department collaboration

Using an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP system allows you to have a dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602294"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602294" data-dropdown-placement-param="top" data-term-id="275602294">common database that can be accessed by dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602286"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602286" data-dropdown-placement-param="top" data-term-id="275602286">different departments , allowing for greater collaboration and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602300"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602300" data-dropdown-placement-param="top" data-term-id="275602300">data management . This also enhances the protection of your data asset because all data is placed securely in one system rather than in multiple places with various security systems.

example of enterprise resource planning

You should also understand some of the disadvantages of ERP so that your business is well prepared. These include:

Disruption to business practices and culture

Employees may sometimes be hesitant to adapt to changes, disrupting your business practices

Increased costs in ERP customisation

Consider new hires, training, consulting, after-sales support services, additional user license, upgrades and more when adopting a new ERP system

Possible data complexity

When making the switch, you have to transfer data from old systems and allow for data conversion. Changing systems may cause complexities and requires time and effort to ensure that the ERP system works to its full potential.

Get started with an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP System  

To overcome the limitations of ERP systems , it is important to get employees on board with effective change management and communicate business strategies and goals effectively. Investing in an ERP system upfront can ensure long-term sustainability and greater operational stability for business growth in the future. A good solutions provider can provide effective change management , after-sales support services, and 24-hour IT helpdesks to ensure the system runs smoothly and integrate the ERP system without disrupting operations.

What are the 5 components of ERP?

The 5 fundamental components of ERP are finance, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602239"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602239" data-dropdown-placement-param="top" data-term-id="275602239">human resources , logistics and manufacturing, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602242"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602242" data-dropdown-placement-param="top" data-term-id="275602242">supply chain management , and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602249"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602249" data-dropdown-placement-param="top" data-term-id="275602249">customer relationship management . Nonetheless, the components of an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP system vary depending on the specific requirements of the organization.

What are the c ommon ERP modules?

The most widely used ERP modules include: finance, human resources management, sourcing and procurement, sales, manufacturing, logistics and supply chain management, service, R&D and engineering, and enterprise asset management.

What are the dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602281"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602281" data-dropdown-placement-param="top" data-term-id="275602281">types of ERP deployment ?

In terms of deployment, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP systems are generally classified into three categories: dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602290"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602290" data-dropdown-placement-param="top" data-term-id="275602290">cloud-based ERP , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602267"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602267" data-dropdown-placement-param="top" data-term-id="275602267">on-premise ERP , and hybrid ERP. Within these categories, businesses can choose from a plethora of ERP types, such as finance, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602242"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602242" data-dropdown-placement-param="top" data-term-id="275602242">supply chain management , and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602239"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602239" data-dropdown-placement-param="top" data-term-id="275602239">human resource management.

What is dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602246"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602246" data-dropdown-placement-param="top" data-term-id="275602246">ERP implementation ?

The dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602284"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602284" data-dropdown-placement-param="top" data-term-id="275602284">ERP deployment process involves dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602282"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602282" data-dropdown-placement-param="top" data-term-id="275602282">configuring the software to fit the organization's unique dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602238"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602238" data-dropdown-placement-param="top" data-term-id="275602238">business processes , such as dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602285"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602285" data-dropdown-placement-param="top" data-term-id="275602285">production planning , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602296"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602296" data-dropdown-placement-param="top" data-term-id="275602296">production scheduling , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602275"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602275" data-dropdown-placement-param="top" data-term-id="275602275">payable , and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602272"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602272" data-dropdown-placement-param="top" data-term-id="275602272">receivable .

Is dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602265"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602265" data-dropdown-placement-param="top" data-term-id="275602265">SAP and ERP the same?

While ERP is a dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602238"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602238" data-dropdown-placement-param="top" data-term-id="275602238">business process management tool that utilizes diverse resources to handle a company's fundamental internal processes, dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602265"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602265" data-dropdown-placement-param="top" data-term-id="275602265">SAP pertains to the products developed by dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602265"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602265" data-dropdown-placement-param="top" data-term-id="275602265">SAP AG. They have developed an integrated solution using the dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602265"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602265" data-dropdown-placement-param="top" data-term-id="275602265">SAP - dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602240"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602240" data-dropdown-placement-param="top" data-term-id="275602240">ERP software .

What is the difference between ERP and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602244"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602244" data-dropdown-placement-param="top" data-term-id="275602244">CRM ?

Although both ERP and dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602244"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602244" data-dropdown-placement-param="top" data-term-id="275602244">CRM systems are crucial for the entire organization, the key distinction between them lies in their primary functions. ERP is mainly concerned with financial data and is utilized by the finance department, whereas dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602244"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602244" data-dropdown-placement-param="top" data-term-id="275602244">CRM deals with customer information that is used by the sales and customer service departments.

dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602243"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602243" data-dropdown-placement-param="top" data-term-id="275602243">ERP solutions and integration

The implementation of an dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602236"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602236" data-dropdown-placement-param="top" data-term-id="275602236">ERP system is a dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602289"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602289" data-dropdown-placement-param="top" data-term-id="275602289">lifecycle process that requires planning, training, and ongoing support. Discover experienced dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602273"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602273" data-dropdown-placement-param="top" data-term-id="275602273">ERP vendors and take the first step and explore a few known dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602243"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602243" data-dropdown-placement-param="top" data-term-id="275602243">ERP solution providers in Malaysia such as dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602292"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602292" data-dropdown-placement-param="top" data-term-id="275602292">Microsoft , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602265"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602265" data-dropdown-placement-param="top" data-term-id="275602265">SAP , dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602269"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602269" data-dropdown-placement-param="top" data-term-id="275602269">Oracle and NetSuite, IFS, and Sage.

In our next article, we will discuss the dropdown#toggle" data-dropdown-placement-param="top" data-term-id="275602259"> dropdown#toggle" data-dropdown-menu-id-param="menu_term_275602259" data-dropdown-placement-param="top" data-term-id="275602259">benefits of ERP and how to integrate it into your business planning . Let's take your business to the next level.

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15 Use Cases for Enterprise Resource Planning (ERP)

Ian McCue

If you’re a business owner or finance leader, you likely already know the “what” of enterprise resource planning (ERP) software: It’s a unified database and set of applications that brings together financials, supply chain, human resources, customer service and other data and business processes. An ERP implementation often delivers a fast return on investment via insights and efficiency gains that save the company money right away.

But how , exactly, do companies use these different ERP modules to realize benefits? What role does each piece of the ERP system play in helping businesses succeed? We’ll describe common ERP use cases for each module and how they help different aspects of the business.  

1. Inventory Management

Before: A retailer’s operations team relies on physical counts, which it tracks in a spreadsheet, for current inventory levels. But warehouse workers have no confidence in this information, and items are regularly out of stock because the company orders more product only when the shelves are nearly empty. Fulfillment is slow and inefficient because warehouse employees frequently have trouble finding items.

After: The retailer adds an inventory management module, which displays real-time inventory levels and updates on stock that’s en route to the warehouse. Every morning, an operations manager is able to compare available inventory to sales data to determine whether the business should place any purchase orders (POs). Additionally, the warehouse team fulfills more orders per day because the inventory management application shows the exact locations of all items. 

2. Purchasing

A manufacturer spends too much time looking for suppliers and gathering quotes for the raw materials it needs to make products. An employee must manually send out quotes, compare them, select a winner and, finally, put in a PO. Staffers often forget to update the list of approved vendors and their contact information, further slowing down the process

After investing in a purchasing module, the manufacturer automates requests for quote, stores all responses in one place and can send out POs with a few clicks, saving a lot of time. The purchasing (or procurement) module keeps a current list of all suppliers and allows the manufacturer to track the status of each outstanding PO.

3. Sales and Marketing

A veteran sales team at a midsize distributor has grown increasingly frustrated with the work required to create quotes and sales orders. The reps struggle to keep track of where prospects are in the sales pipeline and which customers should be ready to reorder. The business also wants to reach a larger audience of potential buyers but has no way to manage marketing emails, contacts and digital ads.

With an ERP application for sales and marketing, reps can turn quotes into sales orders in a matter of minutes and then send system-generated invoices to customers. The sales and marketing teams can see where any customer is in the sales cycle to determine the best next steps. Marketing tools enable the distributor to import lists and target new prospects with emails and ads across multiple channels, which leads to a 10% bump in annual revenue.

4. Manufacturing

For its first few years, a small manufacturer used paper and spreadsheets to monitor available raw materials and daily production numbers. But as the business grew, those manual methods become a major roadblock—it’s lost valuable production time after running out of materials and has a hard time calculating current manufacturing capacity.

After investing in a manufacturing ERP module, the manufacturer can see planned production for the next few months and compare that against available and on order supplies. It can track output against that plan and, if demand increases, scale up by ordering more materials and bringing in additional employees.

infograph erp modules

5. Financial Management

With a single-minded focus on excellent customer service, a direct-to-consumer (D2C) brand has a customer relationship management (CRM) and marketing automation platform, but it still relies on online banking tools and a jumble of spreadsheets to manage its finances. Manually tracking all purchase orders ( accounts payable ) and customer orders ( accounts receivable ) is not only time-consuming, a lack of insight has put the business in precarious financial spots several times.

The brand purchases a financial management module that automatically records all AP and AR transactions and manages the general ledger. Now, the company can better control cash flow and spending. The module makes the staff accountant’s job easier by generating key financial documents like balance sheets, cash flow statements and payment receipts. The system even uses artificial intelligence (AI)—specifically, machine learning— to flag potential errors or fraudulent orders by comparing transactions to thousands of similar entries.

6. Customer Relationship Management (CRM)

Revenue plateaus for an industrial distributor as it deals with mounting competition. It wants to both find new customers and identify upsell opportunities with existing clients, but data on these groups is incomplete and inconsistent.

The distributor invests in a CRM ERP module . When a customer or prospect fills out a form on its website, that information flows into the CRM, which generates a notification so a sales rep can follow up promptly. The CRM centralizes purchase histories for all customers, allowing the business to target them with relevant products, like a new line from a certain brand or accessories. When customers have questions about or issues with a product, a customer service agent can resolve the situation more quickly because he can see all previous interactions with the buyer.

7. Supply Chain Management (SCM)

A fast-growing retailer struggles to keep up with a surging volume of orders—items often ship late, and it’s drowning in returns. Although the company has an inventory and order management solutions, it’s become increasingly difficult to keep track of all POs, customer orders and shipments.

A supply chain management (SCM) module helps the retailer organize purchase orders, monitor current production and compare that against demand and prioritize orders based on when the warehouse received them. With the SCM application, when customers return products, an associate scans each item, records its condition and, if necessary, initiates an exchange. The business is in a much better position to scale as sales continue to climb.

8. Human Resources Management (HRM)

What started as a small family business has doubled in headcount over the last three years. The company has a basic system that allows employees to clock in and out, but the owners have come to dread payroll because it’s so time-consuming. Employee information, some of which is outdated, is buried in a spreadsheet.

The small business purchases an HRM ERP module. It automatically generates paychecks every two weeks—the owner just has to review them for accuracy—making payroll much faster and easier. The solution stores employee records, including contact information, employment forms and tax documents. It also walks managers and employees through the procedures for annual performance reviews. The HRM software can even personalize onboarding and training for new hires to quickly get them up to speed.

5 Key Components of HRM Success

Here’s how to make the most of a human resources management system purchase:

  • If your IT ethos is forward-looking, explore systems that can use machine learning and predictive analytics now and that have an AI roadmap. The sooner you start feeding the system data, the better.
  • Different HRM systems excel in certain areas. Do you have a lot of turnover? Then look carefully at candidate management capabilities. Got a multi-state or -national workforce? Make sure the system can handle complex payroll scenarios.
  • To fully calculate ROI, focus not only on day-to-day functions but how the system will help retain talent, free up HR staff for value-added projects and minimize audit findings.
  • Look for self-service capabilities. There’s no reason for an HR specialist to spend time assisting a manager with routine updates to hours worked, for example, or helping employees access forms like W-2s.
  • Fully use the human capital management and development capabilities. Within an HRM, HR can create training curriculum, personalize learning plans and career paths and set up mentorships.

9. Project Management

A boutique consulting firm has a basic accounting system, but tracking costs and resources for individual projects—critical for accurate billing—has become tedious and difficult as the firm adds more clients. Digging up all this information is no small task, and consultants end up helping calculate project costs. Bills often go out late, or customers discover errors after receiving them, which doesn’t inspire confidence or help cash flow.

The company purchases a project management ERP module that tracks all this information by project. In addition to showing the status of projects, the module tracks consultants assigned, hours logged, travel expenses and communications with the client. When a project hits a certain milestone, the project management application automatically creates a bill and sends it to the client.    

10. Compliance Monitoring

A manufacturer has a two-person accounting team and realizes the business, as it’s currently set up, will not comply with a new accounting standard that takes effect in six months. The company soon realizes this will be a big project—far more than its small accounting team can handle—and hires an outside firm to help. Still, the audit process is touch and go.

The next year, the manufacturer trades in its entry-level accounting solution for a more robust system with compliance monitoring. Compliance standards change frequently, and the software will keep the business informed about modifications to local or industry regulations and new international standards, like IFRS 15 . The accounting application links all relevant records to transactions as well, so preparing for an audit is much less daunting.

11. Asset Management

A technology startup recently completed a major round of funding and can now afford to hire more employees and move into a bigger office. That means it needs more furniture, as well as computers, monitors and other equipment for each new employee.

The asset management ERP module helps the startup manage the lifecycle of physical assets, from purchase order to depreciation to retirement. It keeps records detailing the value of IT equipment and other office supplies over time for compliance and reporting purposes. For real estate, it takes care of lease payments, amortization and other reporting to comply with lease accounting and tax standards.

12. Ecommerce

After hearing for years about the tremendous potential of direct-to-consumer (D2C) ecommerce, a B2B distributor that has sold exclusively to retailers decides it’s time to diversify. The company asks a few employees to develop a strategy for the D2C channel and determine which products it will sell online.

The distributor then adds an ecommerce ERP module to turn its informational site into an online store that can process transactions. The module has user-friendly tools that allow the marketing team to list new items, change product content, quickly jump on ecommerce trends and update the site’s look and feel. By choosing an ecommerce application that’s unified with the ERP, there’s no need for integrations to third-party solutions, like an order and inventory management solution or a CRM—all order, customer and payment information automatically flows into the ERP.

13. Business Intelligence (BI)

A business that sells software uses a leading ERP system to manage accounting, sales and marketing, customer service, human resources and more. While this data has tremendous value, the company needs a better way to manipulate and present the information if it hopes to attract a new funding round.

The software vendor adds a business intelligence module that can turn the data into charts and graphs to make it digestible for executives and potential investors. The tool can also help determine the best industries to target with its software or understand the potential market for a new solution it’s considering developing. The business intelligence application can even use AI to better predict future financial performance based on internal and external data.

#1 Cloud ERP Software

14. Multiplier Effects

When a company integrates a number of modules, it gains automated reporting and IT optimization benefits greater than the sum of the system’s parts. For example, if CRM and ecommerce are connected, the ecommerce site could show personalized product recommendations or even a personalized home page based on the visitor’s purchase or browsing history. That could increase average order value and conversion rate. Similarly, integrated HRM and SCM modules could allow a business to track the average number of orders fulfilled per hour or day by each employee. The employee’s manager could then pull up this data as she prepares for the performance review to demonstrate that this employee exceeds expectations and explain to her department head why this person deserves a raise.

Automated Reporting

Many companies realize their warehouses are inefficient or that closing the books takes far too long, but they can’t pinpoint the cause of those problems. Reporting often sheds light on underlying issues, like inefficient business processes, so leaders know what to focus on and can resolve them.

The more ERP modules used, the more data is available and the more robust the insights. Each module should have reporting capabilities for that aspect of the business, like HR or supply chain. The reports can be extremely broad (How do expenses in March compare to those in April?) or narrow (What was the average order value of customers from Texas last week?). When looking for an ERP solution, make sure reporting is simple and easy to customize.

IT Optimization

Businesses that use disparate systems for different departments and business functions do battle daily with a lot of manual work, inconsistent and duplicate data and other inefficiencies. Organizations gain this visibility when they adopt various ERP modules that all plug into a unified database, thus giving leaders a complete picture of the company’s current state. An integrated system alleviates pressure on IT team, eliminates data-accuracy issues and helps your company scale without adding headcount at a commensurate rate.

Entry-level and disconnected systems also limit visibility across the organization—the operations department has no way to know about an upcoming marketing promotion that will generate a spike in orders.

Having multiple systems also adds the challenge of keeping users and IT trained on all of the technologies and raises IT operational costs. In addition, upgrades can become a major hassle: If one app needs to be upgraded, this can cause a domino effect where the other apps it might be “connected” to also need to be upgraded.

15. ERP System Benefits

An ERP system enables businesses of all sizes and across all industries to save time and money while avoiding unnecessary headaches. Automation is a primary source of those time and cost savings, as it eliminates manual tasks and frees employees to focus on other work. A single source of information also allows employees to spot potential errors early on and resolve them before they turn into bigger problems.

Even though there are tasks ERPs cannot automate, the system puts comprehensive information at decision-makers’ fingertips to facilitate faster and better decisions and improve business processes. From basic information, like financial documents and customer records, to more advanced tools that leverage AI to optimize demand planning and production, employees can find whatever data or reports they need to make better, more informed decisions.

The software also helps ensure compliance with local and national and global regulations, which is critical to the long-term success of a business.

A cloud ERP sets up companies especially well for the future because it offers all these benefits along with advantages that on-premises solutions cannot match. For example, with cloud ERP, the vendor handles all maintenance and upgrades, which are included in the subscription fees the company pays every year, and the system scales smoothly as the company grows.

But what’s most important is that an organization has an ERP that serves as a trustworthy source of information for all employees. It has become a required tool to win in today’s hyper-competitive environment.

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ERP Modules: Types, Features & Functions

Enterprise resource planning (ERP) systems have become a critical tool for businesses over the past several decades. An ERP solution automates critical business processes and serves as a…

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Complete Guide to Cloud ERP Implementation

  • Top Examples of ERP Systems in 2023

Enterprise resource planning (ERP) software creates a system of business applications designed to streamline and automate the back office functions of your organization–including accounting, forecasting, customer relationship management (CRM), and human resource (HR) operations. Some offer different functionality based on industry standards or company size.

A few examples of the most well-known ERP software include SAP, Oracle NetSuite, Epicor, Acumatica, and Microsoft Dynamics 365.

Top ERP Examples

  • SAP Business One - Example of small business ERP
  • Oracle Netsuite - Example of cloud ERP
  • Acumatica - Example of industry-focused ERP
  • Epicor Kinetic - Example of manufacturing ERP
  • Dynamics 365 - Example of ERP for Microsoft Office users

Discover what makes each of these systems an ERP:

What is ERP Software?

ERP stands for “Enterprise Resource Planning”, the consolidated process of gathering and organizing business data through an integrated software suite. ERP software contains a suite of applications which automates business functions like production, sales quoting, accounting, and more.

An ERP creates a single source of information for all different aspects of your business, allowing you to focus on your specific needs from a single system. ERP implementation is designed to serve as many departments of a company as possible to facilitate better business processes.

Read More: What is ERP and How Do ERP Systems Work?

Who Benefits From Using ERP?

ERP software is not limited to large corporations, as businesses of all sizes can benefit from its expansive functionalities. Startups, often operating from home offices and using basic tools like Excel, can employ ERP as they grow.

  • Small businesses, like corner stores, have specific needs met by certain accounting systems.
  • Mid-sized companies, with 50 to 100 employees, can use ERPs to centralize their operations, while small and medium enterprises (SMEs) rely on tailored solutions based on their unique classifications within the economy.
  • At the top tier, enterprises with thousands of employees, such as Amazon or Apple, leverage ERP to manage their widespread operations.

This overview sets the stage for a deeper dive into industry-specific ERP software solutions.

Supply Chain Management

An ERP software can help a business integrate its supply chain processes, from procurement to delivery. As a result, the company can reduce inventory levels, decrease order-to-delivery time, and improve customer satisfaction.

Online Retail

Businesses that sell products and services online can use an ERP system to improve its order-to-cash cycle. The ERP software will help automate its order processing, inventory management, and financial reporting. As a result, the company can improve order accuracy, reduce delivery times, and increase customer satisfaction.

Brick and mortar retail stores can implement an ERP system to improve its inventory management and supply chain operations. The ERP software will optimize inventory levels, reduce stockouts, and improve product availability. As a result, the company can improve its supply chain efficiency and reduce costs.

Manufacturing

Manufacturers can implement an ERP system to streamline its manufacturing processes. The ERP software will optimize its production planning, scheduling, and inventory management. As a result, companies will be able to reduce manufacturing lead times, improve product quality, and reduce costs.

Benefits of ERP Software

ERP software offers a multitude of benefits for businesses. It can significantly reduce costs by centralizing data entry, promote better planning through real-time insights, streamline various administrative tasks to enhance productivity, and foster inter-departmental collaboration by unifying platforms. Moreover, it provides tools to monitor and improve customer satisfaction metrics, ensuring a holistic approach to business improvement.

Better Financial Planning

ERP solutions have modules for forecasting and reporting a wide variety of data. Analytical tools go through historical and real-time data to provide the best possible information for informed decision making.

Reporting in particular is one of the key features of ERP solutions. The applications are capable of sorting data by region, location, profit center, employee, and other customizable ways based on what your business needs most.

Improved Data Security and Accessibility

A common control system allows organizations the ability to ensure key company data can be shared without being compromised. With all departments using the same Cloud-based ERP system, everything can be stored in one shared database which can be accessed anywhere.

Improved Communication

An ERP helps manage different forms of communication so employees can stay in touch, whether it’s with their own department, vendors, or customers.

Electronic data interchange (EDI) compatibility allows the exchange of digitized business documents in a standardized electronic format from one computer to another. This can be used for interdepartmental exchanges, or working with third-party contractors who have their own formatting.

Read More: ERP Benefits: Advantages and Disadvantages

Modules of ERP Systems

Diving into the intricacies of ERP systems, one finds a series of specialized modules designed to address distinct operational needs of businesses. These modules range from Financial Management, ensuring monetary oversight, to Human Resources, streamlining personnel management. Each module functions as a pillar, supporting and streamlining its designated business operations.

Financial Management and Accounting

A financial management module is primarily made up of accounting modules that track the overall profit and loss of your business as well as the overall cash flow. These financial transactions are tracked via a general ledger that shows transactional records and the account structure used to organize these entries.

Procurement

The procurement module, or purchasing module, helps your business source items that are needed for your business operations. A procurement module will issue orders for services and products by tracking all key order info in real-time including the vendor, purchase quantities, item or service purchased, delivery timeframes, payment terms, and costs.

Inventory Management

An inventory management module provides inventory control by tracking stock levels and prices of all products your company builds, buys, stores, and sells. The solution allows you to view what raw materials you have on hand and where to find them, as well as provide recommendations on when to reorder items.

The supply chain management modules manage the flow of goods and services between locations as efficiently and cost-effectively as possible. This means it provides assistance from the initial acquisition of raw materials through to the finished product being delivered to a customer.

Customer Relationship Management (CRM)

The customer relationship management module stores information on all customers and prospects your organization is pursuing. This tracks the relationships and interactions primarily between your sales staff and customers. CRM data is intended to be used to improve business relationships and grow your business–ultimately improving profitability.

Human Resources

A human resource management module manages employee information while automating tasks involving the people in your organization, such as employee scheduling, recruitment, and boosting employee productivity. This detailed module keeps records on all employees and stores documents on them like performance reviews, job descriptions, salary information, hours worked, and paid time off.

Read More: ERP Modules: Types, Benefits, and Functions

ERP System Examples

Here are examples of ERP systems that can help you automate your company processes.

1 SAP Business One

SAP Business One , available on-premise and via cloud, covers the core functionality a small to mid-size business expects from an ERP: modules for accounting, supply chain management, customer relationship management (CRM), and reporting.

Particularly popular amongst manufacturers due to Material Requirement Planning (MRP) features , SAP Business One’s core functionality serves a wide range of industries. And the software is customizable to create a more personalized end-user experience.

SAP Business One: Sales Analysis

2 Oracle NetSuite

Oracle NetSuite is often described as the most deployed ERP in the world. The main modules support finance, sales, HR, and other business operations, including real-time data visibility for more informed decision-making.

While popular with small and mid-market businesses, the modules with supply chain and warehouse management functionality make NetSuite also popular amongst enterprise-level organizations.

NetSuite ERP: Home Screen

3 Acumatica

Acumatica Cloud ERP, as the name suggests, is a primarily cloud-based ERP platform made with the SMB market in mind. Like other ERP solutions, Acumatica offers business management applications for financial, accounting, inventory management, and more.

There are industry-specific versions of Acumatica, including:

  • Construction Edition
  • Manufacturing Edition
  • Retail-Commerce Edition
  • Distribution Edition

Each edition has slightly different functionality to best suite each area, such as the Construction Edition including accounting modules for general contractors, home builders, and land developers. Flexible configuration options make even the base version of this software suitable for use by different industries.

Acumatica Cloud ERP: Data Analysis Receivables

4 Epicor Kinetic

Epicor Kinetic ’s integrated ERP has solutions for CRM, manufacturing, supply chain management (SCM), human capital management (HCM), and more. This platform offers scalability for long-term business growth. Epicor notably includes Governance, Risk, and Compliance (GRC) features for keeping organizations compliant with everything from international accounting standards (IAS) to generally accepted accounting principles (GAAP).

Epicor Kinetic: Dashboard

5 Microsoft Dynamics 365 Business Central

It’s worth noting that, while Microsoft Excel is a valuable business tool, it is not an ERP. Instead, Microsoft has Microsoft Dynamics 365 Business Central . Like other ERPs, it has financial management, reporting features, and project management. Most notable of all is how Dynamics 365 can operate with other Microsoft software products.

Dynamics 365 Business Central ERP Examples

Industry-Specific ERP Systems

While many of the above ERP examples are made for any type of business, there are many industry-specific options as well. Unlike the more general programs, specialized ERP software provides capabilities tailored to certain business processes. Further, the vendors can better understand support issues or requests for improvement.

One example of industry-specific ERP is within the world of manufacturing. A manufacturing ERP (MRP) software plans production on the shop floor by determining the need for materials and capacity in order to complete a manufacturing production order. A generic ERP software would likely require integration with a third-party software, or an expensive customization to be built by the software provider that could require extensive design and test time.

By following an industry’s best practices, these solutions can reduce costs, speed up implementation, and better serve customer requirements to serve the industry’s best practices.

Epicor E10 ERP Manufacturing ERP Example

Deployment Methods

From the traditional On-Premise ERP systems housed in physical offices, to the more modern Hosted Cloud ERP solutions accessible via browsers, and the adaptable Hybrid ERP that combines the strengths of both. Each deployment method offers its own set of advantages and billing structures. As you delve deeper, you’ll discover the nuances of each method, helping you make an informed choice for your organization.

On-Premise ERP

An ERP software an in-house software at a physical office on local hardware systems. Can also be managed from a dedicated data center. These systems can only be accessed on-site or in-office (literally on the premises).

Software licensing is typically billed upfront on top of implementation and training costs. The first year of support is usually included, though there may be ongoing costs for annual support and updates. This payment method is more frontloaded, with lower ongoing costs.

Hosted Cloud ERP

Cloud software, or software as a service (SaaS) means a software vendor takes care of managing any associated servers, maintenance, and running costs at their own data center. Businesses have access to their data and ERP functionality via remote capabilities and/or a web-browser.

Usually billed as a subscription-based pricing model. Software costs are often paid monthly or yearly. There are upfront fees for setup and training. This payment method is spread out, with costs evenly distributed over the course of ownership.

Read More: On-Premise ERP Software vs. Cloud ERP Software

A combination of on-premises capabilities and cloud-based capabilities that work in unison. Commonly a multi-sourced modular application environment that provides the best of both through a two-tier architecture, meaning all core capabilities (such as manufacturing and financials) are maintained on-premises and other applications (such as CRM and sales) are maintained via the cloud. This combination will also provide a combination of both pricing models–allowing you to pay upfront for on-premise functionality and continue to pay on a subscription-basis for cloud functionality.

NetSuite Cloud ERP Example

Frequently Asked Questions

Whether you’re wondering about customization capabilities, potential challenges, or its suitability for small businesses, our FAQ section is here to shed light on these common inquiries.

Can ERP Software Be Customized to Meet Specific Business Needs?

Yes, ERP software can be customized to meet specific business needs. Companies can choose which modules they want to include and customize the software to fit their unique requirements.

What Are Some Challenges of Implementing ERP Software?

Some challenges of implementing ERP software include the high cost of implementation, the need for employee training, and the potential for disruption to existing business processes.

Is ERP Software Suitable for Small Businesses?

Yes, ERP software can be suitable for small businesses, depending on their needs and budget. There are ERP solutions available that are designed specifically for small businesses, with lower implementation costs and fewer features than enterprise-level ERP software.

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5 ERP system examples and categories

  • Enterprise Resource Planning

5 ERP system examples and categories

Top 5 erp systems.

  • Oracle NetSuite
  • Microsoft Dynamics 365
  • SAP Business One

As we discussed in Enterprise Resource Planning Systems: A Comprehensive Guide , enterprises are defined as large businesses with challenges that are inherent to their size, such as complex internal processes, sales functions dispersed across different teams and regions, cybersecurity risks, and more. To manage this complexity, enterprises often look to enterprise resource planning (ERP) systems.

Get to know ERP systems better with our definitive ERP guide . And if you’re looking for an enterprise-level data collection solution for your company, join Jotform Enterprise !

What is an ERP system?

An enterprise resource planning (ERP) system is software that businesses use to manage and integrate the entire organization. ERPs allow organizations to securely store and interpret enterprise data while streamlining primary business processes — everything from supply chain, operations, manufacturing, and distribution to accounting, human resources, and sales.

In addition to streamlining these processes and improving communication between the different sectors and departments of an enterprise, ERP software also provides a single-source solution and database. It secures critical organization data while connecting all of an organization’s moving parts in one central location.

ERP systems by company size

Another way to categorize ERP systems is by the size of the companies they target.

In chapter two of our enterprise resource planning guide, we use Gartner’s definitions of company size and will stick with those for this section. These terms are also the generally accepted ways to break up ERP products by company size.

  • Small and medium-sized businesses (SMB). Syspro makes ERP software tailored for small businesses (fewer than 100 employees) in both functionality and price.
  • Small and medium-sized enterprises (SME or mid-market). Microsoft Dynamics 365 Business Central is an ERP product built for companies with more than 100 and fewer than 1,000 employees.
  • Large enterprises. Any of the bigger ERP players, like SAP and Oracle , build ERP systems for companies with more than 1,000 employees.

As you go up each level, the functionality, complexity, and price of the system likely increases. In other words, a small business will pay a minimal amount for a few easy-to-use modules. In contrast, an enterprise will pay more for a product with robust functionality that can be used by hundreds or thousands of employees.

Here are some of the top ERP systems available, along with details about their functionality and pricing.

1. Oracle NetSuite

Oracle Netsuite landing page

Oracle NetSuite ERP is a cloud-based platform that’s easy to use and designed to meet the needs of customers as they grow over time.

By offering a bird’s eye view of a company’s financial and accounting workflows, NetSuite ERP’s customizable dashboards make it easy to monitor local or regional operations. NetSuite ERP also supports more than 27 languages and 190 currencies, so Oracle customers can manage any number of subsidiaries, business units, or legal entities across the world.

Oracle customers can also add NetSuite ERP modules that automate specific tasks and operational workflows, such as those for supply chain management, procurement, inventory management, and warehouse management. There are even NetSuite modules for specific industries, such as e-commerce and manufacturing.

On the whole, Oracle NetSuite’s ERP system is designed to grow with a company and its overall business needs by enabling customers to add modules and users at any time. However, Oracle NetSuite customers can expect to pay more as they add modules and provide licenses to more employees.

Like other ERP platforms, Oracle NetSuite’s annual license fee enables users to access the company’s core platform and varies, based on the number of optional modules that Oracle NetSuite customers add and the number of employees who will be using it. New Oracle NetSuite customers must also pay a one-time implementation fee to set up the platform.

You’ll need to schedule a product tour and chat with Oracle’s sales team to learn more about pricing.

2. Microsoft Dynamics 365

Microsoft Dynamics 365 landing page

Microsoft Dynamics 365 offers a comprehensive set of customizable applications that are designed to unify data, provide actionable insights, and organize workflows in a single platform.

For instance, Microsoft Dynamics 365 dashboards can provide a quick and comprehensive overview of critical KPIs, open tickets, and other company data.

Not surprisingly, Microsoft Dynamics 365 works well — if not best — with other Microsoft products, such as Microsoft Azure, Microsoft 365, and Microsoft Power Platform. However, Microsoft Dynamics 365 can also integrate with a wide variety of software solutions that gather, organize, and share data.

Microsoft also offers customizable Dynamics 365 solutions for businesses in specific industries, such as manufacturing, financial services, healthcare, and retail, or companies that need to manage certain operations, such as customer service, supply chain, or sales workflows.

Individual Microsoft Dynamics 365 applications — generally based on need or industry — have different monthly pricing plans . In general, Microsoft Dynamics 365 is a solid choice for small-to-medium enterprises, since the starting prices for monthly plans are relatively affordable.

Odoo landing page

Odoo is a customizable, all-in-one software solution that enables customers to automate and manage tasks through a full suite of native, open-source apps.

In all, Odoo offers more than three dozen apps that are designed to manage specific business operations or workflows, such as accounting, invoicing, recruitment, inventory management, preventative maintenance, and quality control. Though sharing data between apps is a seamless and easy process, you can also use third-party integration tools to share information in other software tools with Odoo.

Businesses that only want to use a single app can take advantage of Odoo’s free plan, which has no cap on the number of employees who can use it. Businesses that want to use two or more Odoo apps must sign up for paid monthly or annual plans , which start at $24.90 per user, per month, or $31.10 per user, per month, respectively. This affordable price point makes Odoo a good choice for businesses that need a single, customizable ERP solution.

Businesses can also choose to download a package of core Odoo apps for free and deploy it across their organization. This open-source option, called Odoo Community , enables businesses to manage expenses, projects, internal communication, information sharing, procurement, email marketing campaigns, sales, among other tasks.

Odoo Community may save businesses some money, but there are a few caveats that come with it. Most important, businesses that download Odoo Community can’t get version upgrades automatically, access the Odoo mobile app, get personalized support, or access the full suite of Odoo apps.

4. SAP Business One

SAP business one landing page

SAP Business One is an ERP solution that’s specifically designed with growing small- and medium-sized businesses in mind.

Apart from managing sales pipelines, expenses, inventory, and finance operations in SAP Business One, businesses can leverage this data to quickly generate accurate reports and access it all on any mobile device through the SAP Business One app.

SAP Business One also offers solutions for businesses in specific industries, such as consumer products, manufacturing, professional services, wholesale distribution, and retail.

Since SAP Business One runs on the SAP HANA and Microsoft SQL Server platforms, you can decide which one meets your needs. For instance, the SAP Business One version that runs on SAP HANA has more robust documentation and business analytics tools than the Business One version that uses Microsoft SQL Server.

SAP Business One also supports 28 languages and has 50 country-specific versions, so it’s ideal for businesses that are scaling globally.

Licensing costs for SAP Business One aren’t disclosed on SAP’s website. Like with Oracle’s NetSuite ERP system, businesses must request a quote or schedule a demo to find out how much they’ll need to pay for SAP Business One.

Syspro landing page

Syspro is a dedicated ERP software solution that’s comprehensive, flexible, easy to use, and a helpful resource, especially for manufacturers that are just starting to test the waters.

Along with providing visibility into individual operations, including financial, inventory, and supply chain workflows, Syspro makes it easy to create customizable reports, as well as filter and isolate data.

With support for at least a dozen languages, Syspro can be deployed throughout companies that operate in multiple countries.

Syspro also provides customized ERP solutions for companies that manufacture certain products, including packaging, medical devices, electronics, industrial machinery, furniture, and food and beverages.

Syspro’s website doesn’t disclose the licensing costs for their ERP platform, so you’ll need to request a demo to learn more.

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2 Comments:

TAGEL KENUBIH - Profile picture

More than a year ago

now a days e - driven systemes are smlified every business. Due to this fact responsible citizens like @Frank_ Parrott play valuable contribution , are important for those who are not reached thing like this with charge, who have not charge. so, keep your social work for the massess interest. good job.

tanvi Shukla - Profile picture

Such a nice article. thanks for sharing. the best ERP software is one which fulfill organizations need.

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Updated: December 18, 2023 |

The top 16+ ERP system examples in 2024

Jake Ballinger

Jake Ballinger is an experienced SEO and content manager with deep expertise in FP&A and finance topics. He speaks 9 languages and lives in NYC.

The top 16+ ERP system examples in 2024

Enterprise resource planning (ERP) systems help organizations automate and streamline business processes for optimal performance. They coordinate data flow between a company’s different business processes to create a single source of truth. 

ERP systems can link a company’s financials, operations, supply chain, commerce, reporting , and manufacturing on one platform to help save time and reduce costs.  

There are many incredible ERP systems on the market today, each with its unique features. 

Which is best for business? 

Let’s take a look. 

Jake Ballinger

FP&A Writer, Cube Software

What do ERP systems do?

Benefits of using the right erp software.

The 16 top ERP system examples

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Key takeaways

  • ERP software is the accounting system used to manage financial day-to-day business activities such as accounting, bookkeeping, project management, supply chain operations, etc. 
  • They create a single source of truth for employees and executives. 
  • Before selecting an ERP software provider, businesses should understand the providers' capabilities, implementation models, integration requirements, and the total cost of ownership.

Enterprise resource planning systems are integrated software solutions that handle every data-driven process in a company from financial management and accounting to human resources and supply chain management.

ERP systems store data in a central hub accessible to ensure all business departments have the correct information to make decisions. They’re often used with FP&A software, which combines the historical data of your ERP with the forward-looking data of your plans, budgets , and forecasts.

While ERP systems can vary, they provide these five essential business functions: 

1. Accounting and finance

ERP systems keep all financial data in one place so you can track, manage, and input information in one place.

The benefit?

You save time and reduce input errors.

These software use automated data consolidation, centralized formulas, and KPIs to create financial reports.

These reports provide a picture of a company’s financial health and direction on where to use resources. 

2. Commerce

ERP platforms provide omnichannel solutions that unify online, in-store, and back-office commerce activities.

By using automated inventory updates, order tracking, and accounting, companies can easily manage the different facets of their business. 

Some ERP systems even offer customer relationship management tools. These CRM capabilities manage customer data, contact information, accounts, and service requests.

It can also help automate marketing, sales, and customer service processes. 

3. Human resource management

ERP systems support human resource teams by consolidating employee data. They help HR automate manual workflows, reduce errors, and improve collaboration. 

By tracking employee data like contact information, job roles, and salary information, ERP systems ensure smarter business decisions in a fraction of the time.

4. Supply chain

Supply chain management includes inventory, warehouse, vendor, and order management. ERP systems support all of these functions by: 

Effective demand forecasting and lean inventory

An ERP solution in SCM improves demand forecasting accuracy and reduces inventory costs during large-batch production processes.

A lean inventory is essential to successfully address just-in-time production methods. You can keep your supply chain flexible while reducing the overall cost of production.

Reduce production bottlenecks

ERPs for supply chains enable easy collaboration between internal processes and external suppliers. 

Transparency through the business

A consolidated view of the supply chain with ERP enables business executives to make more informed decisions. 

5. Manufacturing industry

Companies can also use ERP systems to help manage production schedules, track inventory levels, and control quality.

ERP software is a centralized resource for inventory tracking, data analysis, and replenishment strategy. 

Cost savings

An ERP system can help reduce operational costs. Integrating all core business processes into one system makes it easier to spot inefficiencies, manage resources, and gain visibility. 

ERPs also help automate tasks, which improves employee productivity, minimizes human error, and reduces hiring needs.

Increased productivity

Automating repetitive and menial tasks allows finance team members to complete various tasks faster.

This also means they can reduce the time spent searching for information. 

Easy collaboration

ERP systems make working across departments (like during the budgeting season) easier by providing everybody with the appropriate company financial data.

Regulatory compliance

By tracking the lifecycle of each transaction and its adherence to required approval workflows, businesses minimize chances for compliance errors.

Automated features within most ERP systems also ensure that reports adhere to current standards and requirements—including PCI-DSS compliance for companies utilizing SaaS applications.

Automation opportunities

ERP systems can automate tasks that would otherwise need human intervention, like updating records or sending confirmations. 

Automation saves businesses time and money by reducing manual work, minimizing human errors, and allowing employees to focus on more complex tasks.

16 of the best ERP system examples

1. oracle netsuite.

Oracle Netsuite

NetSuite boasts that it is the world's "most trusted" cloud-based ERP software, with over 30,000 companies using its services. 

With extensive experience developing cloud-based ERP systems (going back to some of the earliest examples of such applications), NetSuite simplifies businesses by automating essential processes and giving real-time insights into financial and operational performances. 

It’s a customizable platform with enterprise-grade applications for different aspects of business management, including analytics, reporting, and global infrastructure.

NetSuite is one of Cube's top integrations. Customers love how easy it is to pull NetSuite data directly into working spreadsheets with Cube's FP&A software add-on.

  • Financial Management
  • Global Business Management
  • Inventory Management
  • Order Management
  • Supply Chain Management
  • Warehouse & Fulfillment

Organizations interested in NetSuite's software must request custom quotes since the company does not provide pricing information on its website

However, customers and reviewers have reported that NetSuite ERP has a $999/month licensing fee and an additional $99/month for each user.

The licensing cost may depend on the country, how many modules are in your plan, and if you have any subsidiaries and partial users.

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2. Intuit QuickBooks

Intuit_QuickBooks_logo

QuickBooks by Intuit is simple to use and helps with managing payroll, inventory, taxes, time-tracking, and invoicing.

You'll also be able to track expenses and cash flow and monitor reports and receipts.

The best part?

It's all in one place. 

QuickBooks is an excellent option if you're considering outsourcing your company's accounting system. Most accountants already have experience with the software, so it’s an easy transition.

QuickBooks can be used natively (QuickBooks Desktop) or in the browser (QuickBooks Online).

There are different tiers of service depending on how much power you need: QuickBooks Online Advanced and Quickbooks Enterprise offer fantastic capabilities for users needing more than the basics.

QuickBooks and Cube have a simple API connection that allows for easy data imports and consolidations within Cube's single source of truth.

  • Cloud Accounting
  • Project Profitability
  • Accounting Reports
  • Data Migration
  • GST and VAT Tracking
  • Expense Tracker

QuickBooks offers five unique plans to choose from and gives customers the option of a 30-day free trial period or 50% off their purchase for the first three months.

If you opt for the 50% discount on the first three months, this is the pricing scheme you'll get for a QuickBooks license:

  • Self-employed : $7.50/month
  • Simple Start : $15/month
  • Essentials : $27.50/month
  • Plus : $42.50/month
  • Advanced : $100/month

Then, it switches to full pricing:

  • Self-employed : $15/month
  • Simple Start : $30/month
  • Essentials : $55/month
  • Plus : $85/month
  • Advanced : $200/month

QuickBooks Enterprise:

  • Gold: $1,740/year
  • Platinum: $2,140/year
  • Diamond : $4,200/year

Enterprise pricing for one user with core cloud access:

  • Gold: $199/month
  • Platinum: $232/month
  • Diamond : $404/month

Read our NetSuite vs Quickbooks Review. 

3. Sage Intacct

Sage intacct resized

Sage Intacct is an ERP financial and inventory management system through real-time, multi-dimensional reporting. It automates accounting tasks to increase efficiency and productivity to streamline daily operations.

In addition to the comprehensive ERP solutions offered, Sage supports HR and payroll tasks.

The platform makes it easier for your organization to budget , plan, and make data-driven decisions.

Integrating Sage Intacct's general ledger data and Cube's planning and analysis capabilities provides finance professionals with an all-encompassing view of past, present, and future business performance.

  • Core Financials
  • Cash Management
  • Intelligent General Ledger
  • Dynamic Allocations
  • Revenue Recognition
  • Fixed Assets
  • Sales and Use Tax

Sources report that Sage Intacct costs anywhere from $15,000 to $35,000.

4. SAP Business One

sap-business-one-logo

SAP Business One is an ERP software aimed at small and medium businesses.

It offers various financial, CRM, inventory, and sales features.

SAP Business One also gives companies real-time visibility into their business operations to improve financial planning and forecasting. 

SAP works best for businesses that use other SAP products and are familiar with data science languages and integration. 

  • Financial Planning and Analysis
  • Accounting and Financial Close
  • Tax Management
  • Treasury Management
  • Accounts Receivable, Billing and Revenue Management
  • Governance, Risk, Compliance (GRC), and Cybersecurity
  • Supply Chain Planning
  • Supply Chain Logistics
  • Product Lifecycle Management
  • Enterprise Asset Management
  • Human Capital Management
  • Employee Experience Management

Sources say the Perpetual license for SAP Business One goes for $3,213 per named user with an additional maintenance fee due yearly.

Users can also opt for the monthly professional license subscription plan for $108 with no additional annual maintenance fee.  

xero-logo (1)

Xero is an ERP tool for small businesses, accountants, and bookkeepers. Real-time tracking and reporting give you accurate and updated information to use when collaborating with your team.

You can connect your bank account through the Xero application for seamless transactions. Pay bills, claim expenses, accept payments, and track projects all through its simple dashboard.

Cube offers a supported integration with Xero, so it's simple and easy to pull your Xero data into Excel via Cube.

  • Send invoices
  • Accounting dashboard
  • Manage fixed assets

Xero has a 30-day free trial, and then offers three plans: 

  • Starter: $25 
  • Standard : $40
  • Premium: $54

6. Zoho Finance

example of enterprise resource planning

Zoho Finance offers a range of features including invoicing, budgeting, and tracking expenses. It also integrates with other Zoho products, such as Zoho CRM and Zoho Books, to provide a more comprehensive solution for businesses. 

The software is suitable for manufacturing, retail, and distribution services.

It provides the tools you need to streamline all your back-office operations and enables you to send automatic payment reminders and accept online payments with Zoho Invoice.

  • Contact Management
  • Sales and Purchases
  • Inventory and Warehouses
  • Expense Reporting and Reimbursements
  • Manage Subscriptions - MRR/ARPU/LTV
  • Accounting and Online Payments
  • Tax Compliant - VAT/GST/Sales Tax
  • One-time and Recurring payment pages

Zoho Finance costs $249 per organization per month.

7. FreshBooks

freshbooks-logo-1 (1)

FreshBooks is a cloud-based accounting software that provides businesses with tools to automate invoicing, bookkeeping, and time-tracking.

It’s a great ERP option for freelancers, professionals, accountants, and employees. 

The software offers clients payment options and accepts card payments. It also allows you to send automated late payment reminders to clients.

  • Expenses & Receipts
  • Time Tracking
  • Mileage Tracking
  • Premium: $22

8. Microsoft Dynamics 365

microsoft-dynamics-365-logo

Microsoft Dynamics 365 is a cloud-based ERP system helping businesses manage their finances, operations, sales, and customer relationships.

Dynamics 365 is designed to be easy to use and customizable to meet the needs of any business.

(It can also integrate with other Microsoft applications like Excel and Outlook.)

Microsoft Dynamics 365 also includes tools for creating custom reports and dashboards for businesses to track performance easily.

  • Customer Data Platform
  • Customer Insights
  • Microsoft Relationship Sales
  • Customer Service
  • Field Service
  • Remote Assist
  • Fraud Protection
  • Supply Chain Insights

The pricing for Dynamics 365 varies by business type. You’ll have to review their pricing page by industry to get the right pricing for your business. 

SAP

SAP ERP was initially called System Analysis Program Development (Systemanalyse Programmentwicklung in German).

SAP ERP is a suite of applications that helps organizations manage their finances, human resources, manufacturing, sales, and customer service processes. 

It’s used by millions of businesses worldwide and is known for its comprehensive functionality and scalability.

  • Supplier Management
  • Sourcing and Contracts

Pricing  

While pricing isn’t listed on their site, sources report that the pricing plan for SAP ERP includes the following: 

  • Financial : $645 base fee. $185 Pro, $135 Limited per user (monthly)
  • SAP Manufacturing : $840 base fee. $220 Pro, $170 Limited per user (monthly) 
  • Field Services : $780 base fee. $210 Pro, $160 Limited per user (monthly)
  • Basic Distribution/Retail/Service : $1200 base fee. $295 Pro, $245 Limited per user (monthly).
  • Advanced Distribution : $1300 base fee. $305 Pro, $255 Limited per user (month)

deltek-logo

Deltek is a project-based ERP system designed for architecture and engineering firms.

It includes tools for project management, accounting, and business intelligence.

This ERP delivers software and information solutions that enable project intelligence, management, and collaboration.

Deltek also offers an industry-specific CRM system called Vision. 

  • Information Management and Field Applications
  • Project Portfolio Management
  • Deltek Technology Platform

Sources say the Front Office and Back Office suites start at $30 per user per month.

The Full Suite starts at $46 per user per month, and the Accelerated Launch package has custom pricing.

11. Multiview ERP

multiview-logo

Multiview ERP unifies information into a central database to create a complete view of a business's operations.

It offers a team of client support specialists on top of its powerful, data-centric financial ERP software. 

This software helps break down data silos, automate accounting processes and provide more access to information through industry-leading dynamic reporting solutions. 

  • General Ledger
  • Accounts Payable
  • Accounts Receivable
  • Business Intelligence
  • Budgeting & Forecasting
  • Project Management
  • Multi-sourced Data Warehouses
  • Automated Workflows

While pricing isn’t listed on their site, according to sources Multiview ERP costs an average of $150/user. 

12. Acumatica Cloud

Acumatica-Logo

Acumatica Cloud is a cloud ERP system offering financial support, project management, procurement, and inventory management.

It also hosts a variety of add-ons including customer relationship management (CRM) and human resources (HR) modules. 

Acumatica Cloud provides an integrated ecommerce platform that includes analytic and payment processing capabilities. Cube offers a supported integration with Acumatica for more straightforward analysis and management.

  • Financial management
  • Multi-entity and intercompany accounting
  • Project accounting
  • Reporting, dashboards and business intelligence
  • Inventory management
  • Warehouse management system (WMS)
  • Order management
  • Commerce connectors
  • Point-of-sale (POS)
  • Construction management
  • Manufacturing management
  • Service management

Various sources state that cloud pricing can start as low as $6,000/yearly for smaller organizations.

A typical mid-market organization can spend $15,000 to $40,000 annually based on the functionality needed and the estimated monthly volume of transactions. 

13. Oracle ERP Cloud

Oracle_Cloud_logo-600x350 (1)

Oracle ERP Cloud is a comprehensive ERP system offering financial management, human resources management, manufacturing planning, and supply chain management. 

Oracle ERP Cloud simplifies everyday tasks, allowing you to ask simple questions like: “What tasks are due today?” It’s also scalable and backed by Oracle's world-class support team.

  • Enterprise Resource Planning
  • Supply Chain Management & Manufacturing

According to sources, Oracle ERP Cloud has different pricing plans:

  • Financial reporting compliance starts at $175/user/month
  • Additional financial controls include an added $80/user/month
  • Access controls an added $150/user/month

Contact the software provider for more details.

syspro-logo

Syspro's comprehensive solution portfolio enables companies to operate globally while remaining adaptable.

Businesses gain a complete view of all business activities including financial, warehouse, and inventory management.

  • Business growth management
  • Business insights
  • Business performance management
  • Business process improvement
  • Cost control
  • Distribution management
  • Global business management
  • Governance, risk & compliance
  • Inventory optimization
  • Lean manufacturing

Sources say SYSPRO ERP costs $199 per user/monthly.

15. TallyPrime

tallyprime-logo

TallyPrime is an extensive business management software that enables businesses to streamline invoicing, cost accounting, inventory, banking, cash and credit management taxation, and payroll using a single software.

TallyPrime automates all critical business processes quickly, efficiently, and with better control over your business.  You can reduce complexities to focus on business growth.

  • Audit Trail
  • Budgeting / Forecasting
  • Collections Automation
  • Financial Statements
  • Invoice Customization
  • Journal Entries

TallyPrime has various pricing plans available to users: 

  • Silver: A One-time payment of $630 for single-user access. 
  • Gold: A One-time payment of $1,890 granting multi-user access.
  • TallyPrime Developer : $360/year
  • TallyPrime Server: Starts from $9450

epicor-logo

Epicor is a comprehensive ERP system that helps organizations manage all aspects of their business, from financials and operations to sales and customer service.

It offers a wide range of features and functionality and works for businesses of all sizes. 

Some of the critical benefits of Epicor include:

  • A user-friendly interface
  • Comprehensive functionality 
  • Scalability 
  • Robust reporting and analytics
  • Flexible deployment options 
  • Business alliance and analytics
  • Configure, price, quote (CPQ)
  • Customer relationship management
  • Data management
  • Enterprise content management
  • Governance, risk, and compliance

Sources report that Epicor's pricing for distribution software ranges from $50 to $200 per user per month.  

Conclusion: advance your ERP system

Undoubtedly, ERP systems are essential for businesses of all sizes. But, you can improve even the best system with Cube.

Cube is the first spreadsheet-native FP&A platform that integrates with Excel and Google Sheets. It allows you to automate manual workflows, reduce errors, and improve collaboration so you can make smarter business decisions quickly.

With Cube, finance teams can work collaboratively from anywhere, no matter their accounting solution.

It’s time to automate your manual processes, eliminate redundant processes, and better analyze your finances.

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  • July 1, 2022
  • Enterprise Applications
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7 ERP Implementation Examples Every Enterprise Should Look Into

Table of contents.

Enterprise Resource Planning (ERP) is one of the most complex yet valuable applications that any giant organization uses. 

A correctly deployed ERP system may enhance company operations 95% of the time and cut operational and administrative expenses by over 20%. However, according to G2, up to 50% of ERP installations fail the first time around, 64% of ERP projects exceed their budgets, and 30% take longer than anticipated, frequently resulting in the loss of millions of dollars and disruption to business operations. 

The ERP market is predicted to grow quickly, with a total market value of $49.5 billion by 2025. By 2026, the worldwide ERP software industry is estimated to reach  $78.4 billion,  according to Oracle  Netsuite  

This blog post will explore how organizations have successfully implemented ERP and mitigated major risks associated with large-scale software implementations. 

What is ERP implementation?

An ERP implementation is the process of deploying enterprise resource planning (ERP) software and ensuring that your team makes the most of it. ERP software integrates operational and financial processes into a single database. ERP is also adaptable, allowing you to fulfill your business requirements and tailor solutions to each department.

ERP software aids in the automation and administration of various business processes., It also acts as a catalyst to drive efficient communication across different departments and helps record reliable operational data. 

Benefits of ERP implementation:  

  • Improves Productivity 
  • Enhances Customer Service 
  • Boosts Department Collaborations 
  • Times of Growth. 
  • Improving workflow and security 

The success rate of ERP systems is improving as the emphasis on user experience, simpler interface, configuration flexibility, mobile capabilities, and automation is increasing. After implementing ERP,  49% of businesses  think that their business procedures have significantly improved. Only 5% of businesses claimed they had seen no progress. 

Here are the Successful ERP implementation examples:  

Let’s look at the Example of companies using ERP systems and talk about the ERP systems they utilize. 

Amazon.com, Inc. is an American multinational technology company that focuses on E-commerce, Cloud Computing, Digital Streaming, and Artificial Intelligence. It uses SAP as its ERP solution. 

SAP has played a pioneering role in data processing and excels at managing finances. The accounting department is an excellent example of where ERP solutions can be used to track various assets while also assessing company demands. 

Amazon

From a modest startup to a global leader in business software, SAP has continued to expand, evolve, and with its help, they were able to manage their: 

  • Financial accounting 
  • Invoice verification 
  • Inventory management 
  • Logistical business needs 
  • Human resources 
  • Order management 
  • Sales 

Amazon has the ability to instantly reach its global target audience. Amazon vendors are required to offer their consumers consistently high-quality goods. The sellers have a special opportunity thanks to the solutions offered by the ERP software, where they can keep track of their sales, work to retain customers, analyze profit margins, and further carry out plans based on the solutions offered by the ERP software to enhance the general caliber of the shopping experience for the buyers. 

The new interface offers the user a variety of options, including the opportunity to use an Interactive Analysis as well as product information, MRP, service, Human Resources, and customizable reports. 

Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores in the United States. It is one of the top ten largest firms in the United States by market capitalization. The company’s yearly sales are over $500 billion, roughly double those of its nearest retail competitor, Amazon. 

Walmart-1

Walmart and Microsoft signed a five-year deal in  2018  for Microsoft Azure, a platform for several ERP systems. The following are some of the expectations for the Microsoft Azure partnership: 

  • Integration with developing blockchain-based solutions. 
  • E-commerce opportunities that are more diverse and efficient. 
  • Existing ERP programs can be plugged into the Microsoft Azure platform. 
  • Plans to develop a cloud-based enterprise system that will serve as the foundation for managing the company’s resources. 
  •  Automated warehousing capabilities have a wider range of applications. 
  •  Artificial intelligence is being used to manage supplier relationships. 

Walmart has a competitive edge in technology thanks to its current ERP system, which improves supply chain management efficiency while also strengthening integration and collaboration with suppliers. The ERP system also aids Walmart in improving worldwide company management efficiency. 

Relevant read: 13 Key Steps to a Successful ERP Implementation

3. Starbucks 

Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves. It uses Oracle ERP – a cloud-based software system that automates back-office tasks and day-to-day business operations. 

Starbucks-1

Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), and Supply Chain Management (SCM) operations are all supported by Oracle E-Business Suite. The Oracle ERP above displays revenue analytics and provides quick access to information such as: 

  • Revenue 
  • Expenses 
  • Data on sales 

Oracle ERP allows the user to view all business areas on one screen and includes identifying information. 

4. Cadbury 

Cadbury is a British multinational confectionery company owned by Mondelez International since 2010. Modelez International, an American snack foods giant, owns the 123-year-old confectioner. The firm was on a fast route to success but had trouble fulfilling its manufacturing and distribution needs. 

SAP was brought in to address these issues. Multi-node resource management was expanded across the supply chain, along with a thorough redesign of current warehousing and distribution procedures, among other substantial changes generated by the ERP adoption. 

Cadbury

The planning phase must undergo continuous modifications due to the implementation. During the deployment, the management had frequented remote access to several project management tasks and worked closely with the ERP vendors on consulting projects. Despite the lengthy deployment process, it gave a comprehensive real-time perspective of the core business. 

Benefits of ERP System specific to Cadbury’s: 

  • The introduction of ERP at Cadbury changed warehouse management and gave branch offices and depots structure. 
  • It resolved all the problems, increased efficiency, and directed rapid expansion. 
  •  The best-in-class vendors and their proactive decision-making capabilities expedited the process and reduced the possibility of problems during the initial deployment stage. 

The vendor efficiency helped Cadbury to cut costs. Platforms like Zillancer provide ERP solutions in a much more streamlined and convenient way. The correct ‘Partner’, However, is crucial.  

Relevant read: ERP Adoption – 5 Lethal Mistakes to Avoid

5. Fulton & Roark 

Fulton & Roark is a men’s grooming products company built to provide products that consider the details of modern life. 

The North Carolina-based company monitored its inventory in a spreadsheet and its financial information in desktop accounting software, Sage Live, before switching to full-featured ERP. Leadership thought the company’s current processes weren’t keeping up as revenues started to increase by double annually.

Spreadsheets could not take into account fluctuating inventory costs, and accounting software lacked the procedures required to record the cost of goods sold, a crucial financial metric. 

Fulton & Roark

The business co-founders installed NetSuite ERP to concentrate all work in one location. According to team members, things occurred immediately following a three-week implementation phase. The Fulton & Roark combination was finally successful in: 

  • Without adding more personnel, increase revenues by around 50% annually. 
  • Get a more precise understanding of the margins and inventories that contributed to the expansion of its e-commerce business. 
  • Stop using external accountants, and without adding any more personnel, greatly increase both unit and dollar volumes. 

ERP rollouts don’t have to take a long time; Fulton & Roark’s team was operational in nearly 20 days. The success component that the company’s tale stresses most is persuading management to support an ERP implementation. In this instance, the co-founders started the initiative, which experts claim frequently encourages employee adoption. 

6. LG Electronics 

LG Corporation, formerly Lucky-Goldstar from 1983 to 1995, is a South Korean multinational conglomerate corporation, a hugely well-known and renowned home appliances and electronics corporation with a basis in Korea. The corporation is undoubtedly one of the most well-known brands in the world’s field of electronics product makers, with more than 114 subsidiaries. 

Consolidating HR data for worldwide reporting was incredibly complex, time-consuming, and expensive due to replacing different HR programs utilized by its subsidiaries. The effectiveness of HR staff members’ work was also being hampered by ineffective management practices.

As costs rose, LG Electronics decided to switch to a single, integrated system that would simplify HR administration and improve the business’s capacity to recruit and retain top talent. 

LG Electronics

Additionally, the corporation found it challenging to operate globally due to the growth of manual procedures, improper resource use, and ineffective decision-making. This is what prompted LG to look into ERP software. 

It was challenging for LG to successfully adopt an ERP solution. However, over a period of five years, the business was able to achieve its goals and reduce its challenges. The benefits it got include: 

  • Increased transparency in the hiring and the employee evaluation process. 
  • Flexibility for regions to implement changes locally because of the centralized HR Management system. 
  • Enhanced HR management by giving senior managers real-time access to information. 
  • The sharing of documents and tutorials among the staff members improved learning. It resulted in time and money savings. 
  • Boosted employee satisfaction and eased workload on HR staff by introducing self-service options 

7. The Hershey Company

Hershey’s is an American multinational company and one of the largest chocolate manufacturers in the world.  

Hershey’s began work in 1996 to transform its jumble of outdated IT systems into an integrated ERP platform. It selected Seibel’s Customer Relationship Management (CRM) software, Manugistics’ Supply Chain Management (SCM), and SAP’s R/3 ERP software.

Hershey’s sought a 30-month turnaround so that the systems could be implemented by Y2K, despite a suggested implementation period of 48 months. 

The Hershey Company

Hershey’s busiest times— when it would get most of its orders for Halloween and Christmas—coincided with this go-live ERP implementation schedule. Hershey’s implementation team had to skip important systems testing steps in order to satisfy the strict timeline requirements. Unexpected problems stopped the systems from processing orders. As a result, Hershey’s could not fulfill orders for Kiss and Jolly Rancher valued at  $100 million . 

Any business implementing or planning to deploy ERP may learn vital insights from Hershey’s experience. The two most crucial lessons are closely monitoring ERP scheduling and testing business processes and systems using a methodology created to model real-world operational circumstances. Your business will reduce failure risks and position itself to promote ERP success by heeding these recommendations. 

Delve more: 9 High-Profile ERP Implementation Failures (& How to Avoid Them)

ERP Power Unleashed with Proper Adoption

ERP is a powerful tool, without question, but several obstacles in the path might prevent you from having a successful implementation. The goal here is to completely comprehend how users will interact with the finished system and have the correct mix of partners by your side and tools to make things simpler for you. 

To drive successful ERP Adoption, it is important to use a Digital Adoption Platform like Apty that goes beyond walkthroughs and tooltips. It provides in-app training and enables decision-makers with in-depth application and process insights to make crucial business decisions.  

Irrespective of where you are in your ERP implementation journey, a modern Digital Adoption Platform can go a long way and help you seamlessly steer through the change that comes with it. 

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  • Post Updated On: August 24, 2023

Sandeep Chowdary

Sandeep Chowdary

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COMMENTS

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