What is ERP?
Enterprise resource planning (ERP) is a type of software used by organisations to manage and integrate the separate elements of a business, including accounting, procurement, marketing, finance, HR and much more. Fundamentally, an ERP system allows businesses to run smoothly, using software to streamline operations.
What does it do?
ERP is essentially the glue that binds together the various systems within an organisation, and enables the flow of data between them, eliminating data duplication and ensuring accurate reporting.
For example, within a retail supply chain, an ERP system could run a financial analysis to predict future stock needs. This in turn helps the manufacturing department to perform at optimum capacity and produce the right number of certain products to meet purchase demands. Simultaneously, the CRM module of the system could record customer data, such as purchase habits and popular products, to inform a more effective sales strategy.
Why should I care about it?
The key benefit of ERP is improving workflows, which can reduce costs significantly.
These cost savings are a result of sophisticated business insight to inform key decisions, improve collaboration between departments, a consistent infrastructure from the back office to the front office and reduced risk due to improved data accuracy and financial controls, among many other factors.
The right approach will help a company’s people strategy, too. From an HR perspective, an ERP system which improves efficiency and simplifies workflows can result in greater employee satisfaction. Because by automating certain tasks, team members will be able to dedicate their time to more productive and meaningful tasks.
Who is talking about it?
Microsoft, Oracle and SAP all have dedicated ERP systems, as well as Acumatica, SYSPRO and Dynamics GP, with each business continually developing the platforms to meet various customer needs and keep up with industry changes.
For example, SAP announced its initiative in 2020 towards helping its customers address sustainability and build carbon and climate considerations into the S/4 Hana system.
Useful links:
Enterprise Resource Planning (ERP)
