ERP (Enterprise Resource Planning) is an acronym that the tech-savvy in the financial industry frequently hear about. It’s no surprise, either, since ERP is something you see in many companies that deal with business management on a daily basis. ERP makes this process much more efficient, and in general, much easier because everything is in one system. Now, what is Enterprise Resource Planning?
What Is ERP?
As mentioned earlier, ERP stands for Enterprise Resource Planning. Basically this software suite is designed to integrate the functions of an organisation across all business functions. ERP combines components of an organisation's processes or departments, so that they can communicate with each other effectively.
What Is An ERP System?
An ERP System is the management system of a business that combines data from all internal and external sources into a single database. It provides functionality for financials, supply chain, customer relationship management (CRM), human resources, project management, manufacturing, sales and more.
The main thing about the ERP system is that it has the capability of integrating various modules together which makes it different from other conventional systems.
History Of ERP
ERP is a management-level software that offers a single point of access to all enterprise data. It was first developed by Gartner Group in the 1990s-2000. Nowadays it has become one of the most widely employed operational solutions in the world. With software giants like SAP, Oracle, Microsoft and Odoo.
Several key trends have emerged in ERP software over the past decade which continue to drive change and growth. A new generation of ERP vendors has revolutionised the way people purchase and deploy business applications.
These changes include everything from more flexible licensing models and simplified deployment to more affordable SaaS (Software as a service) and XaaS (Anything as a service) offerings.
Cloud-based ERP software solutions are part of the new generation of SaaS business intelligence solutions. SaaS or Cloud Computing are two terms that are used interchangeably. The first mentions of Cloud Computing describe this model as “software as a service”, equivalent to SaaS.
Today, ERP systems can be found in the cloud or even in other traditional storage systems. However, Cloud-based ERP options are becoming more commonplace, with various providers offering platforms for finance, accounting, manufacturing and distribution businesses.
How Does An ERP System Work?
We are living in the age of digitalisation when almost all sectors are running a business in the cloud. One of the most significant ways to automate business is an ERP. It's a piece of software that makes it possible for all your company’s departments to communicate efficiently and work hand-in-hand.
These applications support a company’s end-to-end business processes.
For companies with a complex network of subsidiaries and highly distributed operations, an ERP system can play a vital role in streamlining data. It also plays a role in facilitating procurement and procurement chain management across the enterprise.
This software eliminates manual tasks and inconsistencies typically found in manual systems. The purpose of an ERP system is to alleviate some of the repetitive tasks that occupy a large portion of an employee's time and provide easy access for employees at every level of the organisation.
What are the Different Types of ERP Systems?
The three most common types of ERP systems are on-premise, cloud-based, and hybrid. Each serves a different purpose for your business. Hybrid models often include a combination of both cloud-based and on-premise components. Here's an explanation of each model:
1. Cloud-based
When people think about ERP software, they usually think of bulky on-premise software that requires expensive hardware to run. But ERP software can also be found in the cloud.
Cloud-based ERP systems are a software as a service (SaaS) implementations. Instead of purchasing the program, you can access it through a cloud server that you access online. Cloud-based ERP is accessed through a web browser. Software updates and upgrades occur automatically.
2. On-premise
For on-premise ERP you need software that is installed on your own hardware and runs within a public or private cloud environment.
Traditional ERP is on-premise and requires the business to purchase hardware for it. This makes updating it difficult because you have to upgrade the system every time a new version of the software comes out.
3. Hybrid
A hybrid ERP system is a combination of cloud and on-premise systems. Although a hybrid ERP system is a good choice for companies that want to use both cloud and on-premise software, the fact that it's a tier two system might also create some problems.
Hybrid cloud systems are more complex because they need to integrate with different types of software and hardware. They also give you less control and flexibility than an enterprise or in-house cloud solution.
Each type is designed to suit a specific company profile and has its own advantages and disadvantages. The system you choose will depend largely on what type of business you operate, your budget and preferences, your timeline for switching to a new system, and the support you need moving forward.
What Is ERP?: Difference Between ERP And Financials
The terms ERP and financials seem to be used interchangeably today, especially in the small business market. Some people refer to accounting software as accounting ERP or financial ERP. Many organizations use the two terms interchangeably. But are they really the same type of system?
The short answer is no, they are vastly different in their design, capabilities, strengths, weaknesses, deployment strategy and cost.
ERP and financials are twohigh-level applications in the enterprise application domain. The major difference between ERP and financials is that ERP (Enterprise Resource Planning) takes care of all the company's business functions like production, distribution, sales, services and so on. Whereas, Financials take care of only accounting-related functionalities like managing accounts payable and receivable.
The formal definition of ERP is the use of information technology to coordinate all of a company's business-critical systems, such as financials, human resources, manufacturing, and so on. In other words, ERP manages a company's business processes from start to finish.
Advantages Of ERP To Your Business
The introduction of a complete ERP system into a business environment can ensure that a company is able to maintain its competitive edge. The following are some of the main advantages of ERP to your business:
Makes business processes transparent and automates them
Provides a real-time view of the business
Creates a single source of reliable information
Reduces billing software costs
Ensures accuracy and efficiency of business processes
What Is Cloud ERP?
Cloud ERP is a new and emerging way of getting and using ERP software. It's nothing like traditional ERP software. If you understand what cloud ERP is and how it works, you can save your company a lot of money.
Cloud ERP is nothing but the ERP which is hosted by cloud computing. It can be defined as Internet-based computing in which software, platforms, servers etc. are hosted by third parties and service providers rather than the organization itself.
Cloud computing has its roots in both hardware and software technologies. This means no limitations on data transfer speed or data storage capacity. The features of cloud ERP that attract most of the users are; real-time data access, on-demand & scalable services, flexible payment options etc.
Advantages Of Cloud ERP Solution
1. An Easy and managed solution
2. Increased flexibility- Bring your company everywhere and anywhere
3. Lower cost and no need for any new hardware
4. Cloud ERP solutions save you from overhauls and system crash
5. Innovative ways to solve all kinds of business problems
Fundamentals of ERP
The concept of ERP may seem to some like jargon created by the lunatic fringe of the business software industry. This is not so at all. If you want to achieve the highest level of efficiency and productivity using your tools, ERP provides valuable tools.
These are important for seeing how your organisation is measuring up to its mission, how it is developing and where it needs help.
ERP is a solution that can help companies avoid costs and increase efficiency across their business functions. This system can improve the overall productivity of a company by eliminating redundant tasks, preventing human error and improving communication between departments.
Key Features of ERP Systems
ERP is often referred to as Enterprise Resource Planning.
It's a software system that includes the tools used to manage core business functions, including financials, human resources, sales, inventory and manufacturing.
ERP comprises a database containing all pertinent company data along with software modules that make it easy for individuals throughout the organisation to access and work with this data.
Value of ERP in Today's World
ERP helps automate business processes in an organisation to streamline business operations and improve efficiencies. Nowadays, you cannot run your business without an ERP system as it enables companies to get real-time access to their critical data and metrics.
This software helps the businesses to manage their functional and non-functional activities such as;
Manufacturing,
Supply chain
Logistics
Accounting and finance
Customer Relationship Management (CRM)
Human Resource Management (HRM)
Project management and many more.
The integration of these applications has resulted in the creation of a single platform for an organisation that can improve its overall efficiency. Moreover, ERP also provides flexibility that enables decision-making considering a holistic view and the use of information from all sides.
Reasons To Move To a Cloud ERP Solution
Is your business ready for a cloud ERP deployment? If you have made the decision to move to the cloud, you will have many options available to you.
One of the most difficult decisions that any company has to make is choosing a cloud enterprise resource planning (ERP) solution. The stakes are high and a wrong decision can severely limit your business's potential. There are many factors to consider before making this important decision.
To help you make the right choice, we developed this guide to walk you through the reasons for a cloud ERP.
1. Cloud-based solutions are more cost-effective
2. Leverage on the latest technology
3. Have a higher flexibility
Characteristics of an ERP System
1. It includes effective procedures for processing information
2. It is flexible and can easily update with business requirements
3. It provides both short and long-term solutions for organizations
4. It is the central hub of the organization’s IT operations
5. It follows a systematic manner when handling data
6. The software is not just used to manage the finances of a company but also to streamline processes in all departments such as sales, production, human resources and supply chain management
Functional Areas of ERP
Human Resources
Customer Relationship Management (CRM)
Financial and Management Accounting
Sales
Manufacturing
Supply chain management
Manufacturing
ERP Implementation
When a company takes the decision to implement an ERP system, a huge amount of tactical planning and work is required in order to make sure that organisations use this system to its full potential.
No doubt ERP implementation is a complex process. However, thanks to our extensive experience in this field, we have streamlined it considerably. erpSOFTapp has turned one of the most time-consuming processes into a pleasant collaboration.
ERP leads to better business results, a higher quality of service and a substantial reduction in costs. The implementation process, however, is one that needs to be approached with caution. An understanding of the value that can result from a successful implementation is needed as well as a full appreciation for all the requirements necessary to make it deliver those benefits.
Getting Started
Paperwork and manual data entry that has been a standard practice in businesses can now be avoided by using the ERP system. Businesses today need not spend time and effort in gathering and processing information and data and doing paper-based billing and payrolls. With the help of an ERP system like Odoo, all these processes become automated.
Odoo is one of the easiest ERP software that you can implement in your business. It specializes in doing business in various verticals including services, manufacturing, distribution, retailing and others.
Odoo enables its users to handle their business functions through an automated platform which also helps to run the organization smoothly.
This leads to increased productivity, enhanced revenues and decreased costs.
How can you get started with Odoo ERP?
Visit https://erpsoftapp.com/requestademo to try out the Odoo system and begin your business transformation.