Answering questions like ‘what is an ERP system’ might seem a bit obvious for some of our audience, but here at Pioneer B1 we truly believe in helping all businesses, whether they are just starting out or ready to expand. To that goal, we will occasionally take a look at topics like these to better serve our audience, no matter where they are in their business journey. Want to learn what an ERP system and how it can benefit you? Read on. If you are already looking to implement an ERP software successfully, Christina has you covered.
What is an ERP System? ERP, standing for enterprise resource planning, typically refers to a category of business management software that helps manage business processes through a range of applications that work together. These allow a company to collect, manage, interpret, and store the data from each of the different pieces in their complex business. More complex (in technology, not in use) ERPs include programs that help budget, plan, predict, and report on the financials of a business as well, giving all that data a clear value to the user. Let’s break it down even further. Typically, an ERP has these attributes:
- Applications in an integrated system
- Functions in real-time (or near enough)
- Database that is usable by all applications
- Consistency in user experience across applications
What Kind of Applications Are There? The different applications are usually grouped together in ‘modules’ to allow for easy customization of an ERP for whatever a business needs. Here are some of the typical options for an ERP module. Management Accounting
- Budgeting, Costing, Cost Management
- General Ledger, Fixed Assets, Payables, Matching and Payment, Cash Management, Financial Consolidation, Receivables, and Collections
- Engineering, Work Orders, Bill of Materials, Scheduling, Workflow Management
Customer Relationship Management
- Order to Cash, Order Entry, Pricing, Inventory, Shipping
- Sales and Marketing, Commissions, Customer Contact, Service, Support
Supply Chain Management
- Planning, Resource Planning, Costing, Billing, Time and Expense, Activity Management
This is far from an exhaustive list but it should give a good overview of the kinds of functionality that can be expected from certain ERP modules. Not every business needs each piece, that’s why they are designed with modularity in mind.
- Supply Chain Planning, Supplier Scheduling, Order to Cash, Purchasing, Inventory, Claims, Warehouse
Fun Fact: Governments use ERPs too, though in the public sector they are called GRPs (guess what the G stands for)
Why Do I Need an ERP System? Alright, so now that we have laid out the basics of what an ERP system entails, you might already have an idea of just how beneficial this can be. By having all of your individual business processes streamlined, and made consistent across platforms you get incredible results. Higher Productivity When all of your individual processes are built to fit together, work happens seamlessly. Your company works faster, stays on the same page, and are able to do more with less (resources that are). Clearer Insights With all the data stored in a single database, it makes for easier to understand insights into the performance of every aspect of your business. Simpler IT When every application is a part of the same ecosystem, it can make for easier troubleshooting. That means if there is every a hiccup, it gets fixed faster and you’re back to the sky-high productivity mentioned earlier. Rapid Reporting And Analytics Real-time communication between all the applications in the ERP system makes it possible to get up to the minute reports as you need them, sharing results, and fine-tuning processes on the fly. Peace of Mind! Leveraging technology to do more with less puts you at a position of power. You have control over the finest details of your business. With that, you are able to more accurately predict, plan, and pivot when needed. With increased productivity, clearer insights and quick reporting you can rest easy knowing exactly where your business stands Now, it’s important to remember, all of this has been a basic rundown of the functions and purpose of an ERP system. There is a wealth of in-depth documentation and experts out there who can really dig deep with you. Here at Pioneer B1, we are experts (and Gold Partners to boot!) with SAP Business One, an all-in-one solution that takes care of ERP functions and so much more. Want to see what SAP Business One can do for your business? Schedule a demo, get in touch, let’s take your business to the next level!