ERP Software

The buyer's guide on ERP systems is intended to help businesses and industries meet their resource planning requirements. On a wider note, the guide offers in-depth knowledge and understanding of the importance of ERP tools along with the benefits and pitfalls of ERP implementation in the organization. If you are planning to invest in an ERP system, then you can explore the profound details related to the ERP software solutions in the following sections.

ERP stands for Enterprise Resource Planning that serves as the centralized and comprehensive system which helps in supporting all the business process management processes  of a company. 

Enterprise Resource Planning System is used to plan and manage the various activities of the organization that includes accounting, procurement, customer relationship management, reporting, supply chain operations, risk management, compliance, human resource management, manufacturing, and financial services. 

The following main ERP components are:

• Human Resources - From onboarding to offboarding and from benefits administration to timekeeping, the HR ERP component deals with all the activities. It deals with the full spectrum of employee management.

• Customer Relationship Management - This component allows keeping track of all the customers. Within the ERP solutions, this element helps in leading data along with it enables the optimization of marketing and sales efforts.

• Supply Chain Management - With the help of real-time data, this component helps in creating an updated, accurate production plan. 

• Inventory management – It manages the processes of sales, warehousing, and order fulfillment, stocking a warehouse and tracking functionality.

• Financial Management - The company can store and analyze business data with this element. It manages tasks related to accounts payable, accounts receivable, costs, budgets, and forecasts. 

• Manufacturing operations management - It includes activities related to planning, publishing, scheduling, collecting, and analyzing functions.

• Governance, risk, and compliance - The ERP system manages the tasks related to tax compliance, tracking, role-based permissions features, report writers.

• Business Intelligence – It helps in creating data-driven decision-making processes, collects and analyzes data, and offers actionable insights about the business processes. It delivers insights in the form of reports.

The ERP tool in the organization integrates and automates the business processes. In real-time, it shares information related to the enterprise side that helps in improving customer service and corporate brand. The ERP provides better interconnectivity between the departments of the organization with the help of a single integrated software program.

Across the company, the ERP integrates all departments and functions into a single computer system, which in turn helps in serving the needs of different departments. ERP influences businesses in the following ways:

• The ERP system can offer business intelligence tools and regularly provides an opportunity for improvement and refinement in the business processes. It assists in the business planning and projecting process.

• The ERP tool issues related to productivity enhancement, customer service, inventory, quality control, cash management, prompt delivery, project management, and data-mining system.

• The ERP systems monitor orders, supply chains and make the distribution process effortless by tracking the movement of the materials. It offers faster tracking from production to end-user which helps in the completion of the task.

• The ERP system in business helps in getting inventory levels under control. It manages real-time inventory levels, inventory orders, warehouse management tools, and information related to purchasing data.

• ERP system makes financial management easier across all the departments by managing the issues related to accounts receivables, accounts payable, payroll, tax calculations, profitability analysis, acquisition cost per customer, purchase order preparation, and much more.

• ERP software companies bring a net decline in the cost of resources used by the organizations. One computer technician can maintain all the company’s software with the help of a single management system. If the ERP system is server-based or is supported by a third party, then it can decrease power consumption. 

“ERP is a philosophy for operating a business model. If your company does not want to adapt to this philosophy, save yourself the headache, and don’t pursue ERP.” 

                                             Michael Pelphrey (Directing the ERP implementation)

The primary benefits of employing the ERP system in the organization are:

• Offers real-time data and information - In an organization, you can have a systematic and uniform flow of business data and information across all departments. 

• Make better collaboration - ERP tool increases collaboration by increasing access to data from other departments.

• Boosts productivity - ERP system implementation allows businesses to experience remarkable enhancements in their efficiency along with overall productivity.

• Seamless Integration - Enterprise Resource Planning (ERP) systems make use of an integrated centralized database that assists in the main processes of a business.

• Supports cutting operation costs -  ERP software for business helps in reducing the business’s labor and operating costs. The companies can experience maximum ROI and save money by managing their time and entrepreneurial resources.

• Collaboration and Scalability - ERP software provides collaboration between departments and allows the addition of new users and functions to grow efficiently.

• 360-degree view of business operations - ERP system offers a 360-degree view into businesses like sales, planning, customer service, production, HR, distribution, and accounting.

• Paperless operations - In the ERP system, you can have your files and documents at your fingertips which you can access from anywhere. It helps you to do away with the need for printing and wasted papers.

• Better-informed decisions – The user can view every aspect of business processes with the help of ERP software solutions. Businesses can make better-informed decisions.

• Proper inventory management - The ERP software allows users to have the details of the product by knowing from where every piece of the product came from, where it is and where it is required in real-time.

• Enhances business reporting - Effortlessly the companies can respond to complex data requests which in turn helps in saving time. The user can run their reports with the ERP system tool.

• Apt data and cloud security - Enterprise Resource Planning Software provides appropriate data and cloud security functionality to the users.

• Powerful business insights – ERP system software allows businesses to make informed business decisions and can have advanced insights from analytics tools. It integrates data for the entire organization.

• Easier regulatory compliance – ERP software offers the information of the business data that includes details regarding who, what, when, where, why which in turn can ease the regulatory compliance process.

• Streamlines business processes - ERP software for business streamlines the process of sales and communication among departments of the organization.

• Greater efficiency and flexibility - ERP system helps in boosting productivity and simplifying business processes.  ERP software solutions can adapt to the changing needs of the growing business.

• Correct Forecasting - By employing ERP software, the users and managers can have the tools and resources required to make more accurate forecasts.

ERP software allows the standardization and integration of business processes across various departments like finance, procurement, sales, accounting, customer support, CRM, human resource, and inventory in the organization. The ERP software for business allows the automation and amalgamation of core business process that includes taking customer orders, maintaining inventory records along with financial data, and scheduling operations.

The most commonly found features in ERP system software are as follows:

• Integration- ERP platform is fully integrated that allows you to analyze and monitor data-driven tasks. It combines sales, engineering, accounting, and other business functions. ERP tools maintain the natural flow of information.

• Customer Relationship Management – In a centralized and organized database, the ERP software records customer information that includes names and contact numbers. The business can handle marketing automation, sales pipeline activities, and lead management tasks by employing CRM tools. You can enhance long-term customer retention by ERP’s customer service management capabilities.

• Automation – ERP system implementation helps in automating the everyday tedious tasks that include payroll, invoicing, reporting, accounting, and order entry. It is easy to reduce human errors by automating business processes.

• Inventory Management- ERP software solutions allow smooth supply chain operations. It keeps track of in-house stock quantities. In business enterprises, it helps in preventing events like backorders and surplus inventories along it create a balance between them.

• Finance and Accounting- Enterprise Resource Planning (ERP) systems provide real-time information to the managers regarding accounts receivables, accounts payable, general ledger, and financial reporting.

• Mobile functionality- ERP software for business provides mobile access to its database and processes that allow companies to gather information about their employees effortlessly. The companies can grant remote access to their employees from product pricing to transportation services with the help of this functionality.

• Human Resource Management- Within the ERP system software, the HR component helps in the activities related to employee management, payroll, recruiting, training and development, hiring, payment automation, tax, and benefits deductions. It handles the complete employee database. 

• Data Analysis- The ERP system analyzes the data related to all business operations. It includes client and sales data along with production statistics. You can track organizational productivity and efficiency with the help of the data analysis feature.

• Sales and Marketing – You will find the taxation rules and shipping tracker feature in the advanced form of enterprise resource planning software. The sales and marketing component manages sales workflows like sales inquiries, sales orders, sales invoices, and quotations.

• Core Manufacturing- Enterprise Resource Planning System allows companies to align the manufacturing and inventory processes. It accelerates the production cycle and streamlines the production process. With the help of the inventory management system, it allows cost reductions. You can get detailed reports on business-critical inventory information with this component.

The other essential features of ERP software are:

• Deals Management
• Customizability
• Email automation
• Payment gateways
• Workflow management
• Document Management
• Asset Management
• SMS notification
• Recruitment automation
• Financial Reports
• Project Management
• Contact Synchronization
• Reimbursement Service
• Integration with WooCommerce plugin

The primary delivery models for ERP software are:

• On-Premise- This type of delivery model is considered traditional and is purchased by the company. In its server, the company installs it. As per the typical needs of an organization, the on-premise software system gives the leverage of customizing the application. Within your company-owned servers, your business data remains secure.

• Private Cloud- The organizations can host the application on a private server, which is located on-premise by making use of individual cloud-based software. ERP vendors have ownership of the software. You can hold a high degree of control over it because the cloud server is private. The vendors manage and update the server remotely. In this type of ERP solution, the customers have the flexibility to develop their customizations and applications.

• Public Cloud – The ERP vendor server owns and remotely hosts this type of ERP software. On a subscription basis, you can access it over the internet. Across multiple servers and database resources, you can install this application. If your business is spread across various locations, then you can make use of this technology. The other name of this model is SaaS (Software-as-a-Service)

• Hybrid- Both on-premise and cloud format is combined to form this type of ERP solution. Without losing data or functionality, the Hybrid solution allows customers to migrate from one delivery model to another. 

• Hosted – In this type of ERP model, you own the software but not the server. By paying a monthly fee, you can use third-party servers where you can locate your data. ERP vendors manage data back-up and data security. The software is accessed through virtual private networks.

Enterprise Resource Planning Software manages business functions efficiently. You need ERP software due to several reasons:

• Simplify the business process – The business operations gain speed, efficiency, and accuracy with the ERP system. The automation and integration feature can increase productivity and reduce time and labor costs.

• Supports company growth – The businesses can spend less time pushing paper and more time drilling into the areas that help the company to move forward by utilizing an efficient ERP system.

• Better Collaboration – The ERP tool provides a central database where the data is compiled, shared, accessed, and stored. This system helps in reducing errors, which are caused by working with incorrect data. The system helps in improving collaboration.

• Improves Inventory Monitoring- ERP for start-ups allows tracking and monitoring of inventory levels as ERP systems make use of barcoding, RFID (radio frequency identification) tags, and serial numbers that help in tracking the inventory levels.

• Mobility and flexibility- The ERP software solutions provide accurate information to the users by leveraging the centralized database. It offers remote access to the database that helps in processing the multiple functions.

• Enrich accounting and financial reporting- ERP system implementation allows tracking of the incoming and outgoing transactions. With the help of the centralized platform, it helps in increasing the visibility of crucial operational data.

• Regulatory Compliance and Security- ERP system software monitors compliance, streamlines data processing and internal processes, enhances security features like regulated data access, and in-built firewall systems.

• Improves Production Planning and Resource Management- ERP for small businesses not only manages inventory but also looks after manufacturing and provides insights into all manufacturing operations. This application administers the Bill of Materials (BOM) and fixed assets. It helps in improving profitability and supply chain relationships.

• Better CRM- ERP system implementation allows the CRM (Customer relationship management) to have access to the data across business functions. You can see the details like order history and billing information with integrated CRM.

The cloud-based ERP software allows users to access the Enterprise Resource Planning tool over the internet. At any time and from any location, the companies have access to their business-critical applications.

For small and mid-sized businesses (SMB’s), cloud computing is valuable as it provides access to full-function applications at a reasonable price. You can focus on running your business rather than on IT administration with cloud deployment. 

Nowadays, businesses prefer to set up an ERP system in the cloud due to the following benefits:

• Scalability
• Enhances accessibility and mobility
• Offers Cost transparency
• Security standards and compliance
• Sales Automation
• Better system availability and disaster recovery
• Concentrates on core competencies
• Quick implementation
• Speedy updates and upgrades
• Lessen up-front and operating cost

Enterprise Resource Planning software for the manufacturing sector provides one user interface for the entire organization that helps in managing various functionalities. These functionalities are related to materials and parts purchasing, product planning, financials, production scheduling, capacity utilization, order management and tracking, customer satisfaction, procurement, equipment, and assets.

ERP system implementation for manufacturing is considered due to the following reasons:

• Provides access to operational and financial information
• Offers a better supply chain with enhanced inventory visibility
• Improves customer satisfaction
• Simplify processes across multiple locations
• Allows a global workforce
• Grow the business with profound forecasts

The integration of the ERP system in B2B provides the following benefits:

• Fulfills the statutory requirement
• Lessens manual order entry time and errors
• Streamlines inventory management
• Improves the back-end processes
• Manages the operation of the entire management team
• Generates management reports accurately
• Handles issues related to accounting, financials, suppliers, purchasing, customers, and sales

ERP manages the business in an enterprise. The ERP system software contains various modules according to the business hierarchy levels. As per the flow of the business in the organization, these operations are monitored and calculated correctly. The ERP system works according to the setup, which is done by the association business stream. 

You can select and implement the best ERP software for your business by considering the following points:

• Identify your requirements – Analyze and define your business processes before choosing an ERP system. Make out all the weak points in your organization, which can only be improved with the help of ERP software solutions. 

• Be familiar with the cost of the ERP implementation- Consider the price of the ERP system that also includes the cost of implementation and integration. To determine the real ROI in your business, you should compare the features and functions of different ERP systems.

• ERP Vendor- Identify the vendors correctly so that they can provide you with long-term support and assistance in your budget limit. Make sure the vendor fulfills your business requirement for the committed year.

• Accessibility on Mobile devices - Nowadays, it is essential to access the different functions of the ERP system through smart devices like tablets or smartphones. Ensure that your ERP platform delivers an interface that you can run effortlessly on your smart devices.

• Customization and Integration option- In accordance with your dynamic needs, you can adapt and adjust your ERP system with the help of customization and integration capabilities. You can easily do configuration by clicking on options that are available in your ERP software. As per your business requirement, you can change the actual code of the software.

• Implementation and Deployment- Explore the technical expertise and the reputation of the implementation partners before implementing your ERP system. Make sure the right implementation partner should undertake the task of ERP implementation.

• Local, Cloud, or Hybrid- As per your requirement, you can choose the ERP system software between on-premise, cloud, or hybrid models. Usually, the local installations require a high upfront investment. In the cloud system, you need careful integration evaluation before data migration. In hybrid systems, you can have a practical solution with careful customizations.

ERP software is beneficial for businesses that involve complex functionalities. The businesses that can enhance productivity by employing an Enterprise Resource Planning System are:

• Healthcare
• Construction
• Wholesale
• Manufacturing
• Big-box Retailers
• 3PL (third-party logistics) providers
• Distribution
• Logistics
• Professional Services
• Industrial Services

The right decision about your ERP system can be made by considering the following points in mind:

• Value Planning - Both quantitatively and strategically decide that in what ways your ERP system can add value to your business. The outlined plan will help you in highlighting the long-term goals.

• Think about the budget - Before finalizing the ERP system software, you should consider the cost of implementation, installation, and maintenance. You can determine the real ROI (return on investment) in your business by comparing the features and functions of different ERP systems.

• Explore Vendors - Thorough research of the right vendor is a must for your ERP business. The vendor should be compatible with the cloud environment as it is essential for running your business efficiently. 

• Expert advice - In your decision-making process, make sure you include the experts so that they can adequately guide you regarding the ERP system and the process of software migration. The expert decision-maker can assist you in your decision-making process.

• Take your time - ERP implementation is a big undertaking, so you should take ample time before finalizing it. Ensure that your business goals align with the big choices that you are planning for the implementation of an ERP system.

ERP software market has evolved fast with a wide range of functionalities. In the ERP market, the top emerging trends are:

• Cloud-based solutions- ERP for small businesses and start-ups can have automatic updates, universal accessibility, and heightened security with cloud-based solutions. You will find that cloud services are essential for various departments like sales, human resources, manufacturing, and marketing.

• IoT (Internet of Things) – By connecting devices and products to the Internet, you can have better oversight over things like supply chains, appliance performance, shipping partners, and data pool for the decision-making process.

• Mobility- Managers, executives, workers, back office, and front office staff can manage critical business operations on smartphones and tablets. Anywhere and anytime, they can access the business operations on mobile devices. 

• Real-time insights- The functionalities of the interactive dashboard and in-built reporting can create a flawless user experience. The real-time insights allow users to have prompt responses along with faster turn-around time.

• Predictive Intelligence- Businesses can increase their operational efficiency, drive more sales, and enhance productivity with predictive intelligence capabilities. In terms of data and market trends, the BI (business intelligence) tools can strengthen the business core that ultimately helps in augmenting human capabilities.

• Leverage supply chain management- The ERP system can increase the visibility of your supply chain operations, which in turn can help in promoting communication among various departments of the organization. You can keep your organization on the same page with the proper supply chain management system. 

• Adding up social media and digital marketing - Across multiple social media channels, the list of ERP systems can incorporate direct marketing and data gathering links so that they can gain competitiveness.

• Big data analytics- Users can make accurate predictions by using analytics tools. It helps users to form a more intellectual approach to the business strategy. A large amount of data can be generated exponentially due to IoT-connected tools.

• User-friendly– Several top ERP vendors have started making the user interface much more friendly and intuitive. The attractive dashboard and easy-to-use ERP features can encourage the users for the ERP platform.

• Seamless Integrated ERP – The integration of ERP solutions with the existing or new modules can provide lots of benefits in terms of access to real-time data, reduction of hardware and software costs, and automated functioning.

• Built-in Analytics- To meet the competitive market, several businesses are enhancing their analytics capabilities. ERP systems have started implementing this feature too.

ERP software companies consider the cost of licensing, implementation, training, process redesign, maintenance, upgrades support, development for customization, and vendor pricing.

The price of the Enterprise Resource Planning (ERP) systems is based on the business size and the requirement of its operations. The cost of the ERP for start-ups and small businesses is more affordable as they require basic plans contrary to the ERP for big organizations that go for advanced programs. Small businesses can also try free and open source ERP software solutions.

The average cost of the ERP software can start as low as $ 5.6 per year (for example, ERPNext). It can reach as high as $111.37 annually (for instance, ChiefEX) approximately.

GoodFirms performs rigorous research based on the latest business trends. If you are looking at the ERP system for small businesses or start-ups, then you can look at the curated list of top-quality ERP software created by GoodFirms coverage.

Before finalizing the best ERP software for your organization, you can explore the list of ERP software to gain knowledge of the high-quality ERP software solutions available in the market.