What is ERP Software? ERP Defined
Wondering what ERP software is? What ERP means? ERP is an acronym for Enterprise Resource Planning. ERP software is a series of integrated modules that share a common database to manage day-to-day business processes, operations and workflows. Incorporating industry best practices, ERP helps organizations streamline business processes while staying on top of continually changing regulatory requirements.
What does an ERP system consist of?
An ERP system consists of a series of integrated modules that share a common database and can be scaled based on the size and requirements of the organization. Each module is designed to work independently, or together and therefore modules can be implemented using a phased approach. Core modules typically include General Ledger, Accounts Payable, Accounts Receivable. Purchase Order and Sales Order and if needed, Inventory. In addition to the basic core modules, more specific modules like Human Resources, Customer Relationship Management, and MRP can be added to meet a wide variety of business and industry specific requirements.
How is ERP software deployed?
Unlike days of the past where the only option available was an expensive, inflexible legacy system requiring a large room to house the ginormous mainframes (think Hidden Figures, the award-winning film depicting NASA’s mathematicians -where a room was reconfigured to house NASA’s first mainframe computer), today ERP systems can be deployed on-premises, in the cloud, or as a hybrid ERP solution. Of these options, the cloud provides a point of entry for smaller companies. Note that the long-term costs of cloud vs. on premises ERP softwarwe should be evaluated during the software selection process because whereas cloud provides a low-cost solution upfront, there comes a point where the long-term costs can be more.
Common business goals of ERP software
ERP systems vary as do the goals that organizations are looking to achieve with an ERP deployment or upgrade. Today ERP options are available for businesses from the SMB market to large enterprises. Regardless of the business size, there are some commonalities amongst business goals because today businesses are looking for ways to:
- Improve productivity
- Improve decision making process
- Be more competiive
- Create an environment for growth
- Meet the expectations of today’s younger workforce
- Meet the expectations of a new generation of customers
Amongst today’s trends, organizations are looking for end-to-end solutions that best meet their requirements today plus provide the flexibility to change and grow with the organizzation over time. The difficulty of using or maintaining older ERP systems that typically consist of multiple point solutions with multiple databases is a major driving force behind ERP upgrades. With that, today’s ERP vendors are aligning themselves with third party products and offering the integrations to their ERP systems in effort to expand the functionality of their ERP modules. For software vendors, integrating point solutions allows them to better focus on the core functionality while letting the third party software companies serve as the experts in their area. Epicor ERP for example, integrates with DocStar’s for businesses wanting to move to paperless document management and Avalara’s sales tax solution to automate the process of updating sales tax tables to remain compliant. In addition, unlike ERP of the past, many of today’s ERP systems offer tools for collaboration, social, and mobility. In the end, today’s focus is all about the customer and the younger workforce and meeting their needs while also sustaining your business.
Top 20 list that leads to ERP decisions
- Single database vs multiple disparate systems
- Single database for improved accuracy, consistency and security of company data
- Standardized business processes based on industry best practices
- Improved visability
- Access to real-time data
- Improved Business Intelligence and Analytics
- Easier reporting, without IT’s involvement
- Collaboration capabilities
- Improved workflows
- Streamlining processes, such as the financial close process
- Eliminating paper transactions and paper
- Easier access to information
- Improved Supply Chain Management
- Improved inventory management
- Automation of tax updates
- Improved Productivity
- Cost Reduction
- Regulatory compliancy
Now that you understand the definition of ERP and a few of the benefits of modern ERP, it’s up to you management team to decide the timing of an ERP upgrade.
If you would like to learn more about the capabilities or cost of a modern ERP system like Epicor ERP, give us a call. MIS has been helping organizations meet their business goals with technology for over 30 years and we’ll be happy to talk to you about the latest technologies including Cloud ERP. Hear what we have to say and then decide for yourself if the timing is right to upgrade your ERP solution. Not ready today? That’s ok, we’ll be ready when you are. Our goal is for you to experience Exceptional ERP™ – that’s what we call ERP project success.
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