What is Enterprise Resource Planning and Why is it Important for Your Business

Enterprise Resource Planning has been around since the beginning of the twenty-first century, evolving past large mainframe computers on-premises to cloud infrastructure as SaaS (software-as-a-service). But what is Enterprise Resource Planning? and why is it important for business?

What is Enterprise Resource Planning?

Enterprise Resource Planning (ERP) refers to a system of integrated modules that companies use to manage essential aspects of their business, such as procurement, inventory, sales, marketing, finance, human resources, and more.

The integration of multiple business processes facilitates the flow of data between multiple departments – enabling companies to gain broad and more comprehensive insights into the activity and state of the business. The information gained here is made available to other divisions where it can be used productively.

Common ERP Modules

ERP systems function much like how a brain controls the different limbs in the body – only in this case, the limbs that ERP systems oversee and support are the business processes. In an ERP system, these processes are reflected as modules.

Some of the most common types of ERP modules include sales, finance, human resources, procurement, manufacturing, logistics & supply chain management, R&D and engineering, and enterprise asset management.

Types of ERP

ERP systems today can be installed in 3 ways: on-premise, in a cloud, or in a hybrid setting with both on-premise and cloud solutions.

• Cloud ERP

Cloud ERP software is hosted on the cloud and provided as a service over the internet. With this type of ERP, the developers are responsible for providing regular maintenance, updates, and security. It is the most popular form of ERP in large part due to the low upfront costs and how easy it is to scale and integrate into the business.

• On-Premise ERP

On-premise ERP is the traditional form of ERP where ERP software is installed locally within your organisation’s hardware or servers. With this type of ERP, the responsibility of installing or maintaining the software rests entirely on the company’s shoulders.

• Hybrid ERP

Hybrid ERP combines both forms of cloud and on-premise applications. With this type of model, a portion of the ERP modules or applications will be held in the cloud, while others will be on-premise. Some companies prefer to use on-premise ERP systems for corporate functions and cloud ERP systems for regional offices or for specific business units.

Why is ERP Important?

In 2021, the global ERP software market was valued at USD 45.82 billion. Fortune Business Insights expect this number to reach USD 90.63 billion by 2029, growing at a Compound Annual Growth Rate of 9.1%. This growth is representative of the growing role of ERP in today’s business climate. Below are some benefits of implementing an ERP system.

Scalability

Growth is intrinsic to business. Not only do modern ERP systems make it operate across different regions, markets, or products, they are much easier to improve on as the business grows. New functionality can be added accordingly as the business evolves.

Real-time Insights

ERP systems offer a central location where data can be collected, stored, and analysed. The insights acquired can be used in strategic decision-making.

Increased Productivity

ERP systems enhance business productivity in many ways. For example, basic repetitive tasks can be automated, allowing employees to focus on tasks that can provide more value to your company. Furthermore, tasks that usually take more time to accomplish are achieved in a much shorter period.

Data Security

Data is taking on greater prominence, especially in this day and age, because it facilitates good decision-making. ERP systems can help you secure this critical asset. Traditional methods of managing data may result in important information being spread in unofficial channels, while ERP systems have customisable security layers ensuring that employees only have access to the information they need to do their job.

Final Thoughts

For over three decades, Eurostop has been helping businesses establish systems that allow them to manage their merchandise and business processes with efficiency and ease. We have a broad selection of retail ERP software, including solutions for stock control, tenant management, enterprise point of sale (EPOS), and more.

Speak to our experts to learn how we can improve your operations.