What Is ERP?

Perhaps you’ve heard the term “ERP” floating around your online circles. Maybe you’ve heard it mentioned by someone in your organization. With increasing popularity (and huge benefits for businesses of all kinds), it’s no surprise that ERP is making its way into water cooler chats and strategy sessions.

So, in case you aren’t already familiar with what ERP is – and what it can do for your company – this is your introduction!

What Is ERP Anyway?

“ERP” stands for Enterprise Resource Planning. In its simplest form, ERP software allows companies to track resources, manage processes, and automate office functions. Integrating different applications into a central management tool, ERP software is meant to streamline business functions. The ERP system – or integrated applications – will collect and store all kinds of vital information. From there, employees and managers can use the system to interpret that data in various ways.

If you’re at all familiar with CRM software for contact and payment info management, imagine those functions extending into inventory, purchase orders, regulations, supply lines, and on and on…

The goal is to have all of your companies vital data within the system, coordinated in a way that reporting, comparisons, big-picture reviews, and searching through minutia can all be done with ease.

What Applications or Modules Might Be Included?

Part of the power of ERP comes in customization. Because every company is different, ERP systems tend to be built out of multiple integrated applications – each focused on a different area of the business. Common modules can include:

• A database of instructional documents
• Purchase orders (complete and in progress)
• Invoices (paid and outstanding)
• Employee performance (based on any number of metrics)
• Customer retention metrics
• Collated sales/revenue data
• Inventory management
• Employee profiles
• Bids and estimates
• Salesperson performance
• Compliance requirements
• Itemized overhead costs

…And that’s just a sample. The idea is to built a database of your important information, and use ERP to integrate them together for easy reporting, comparison, and understanding. Through both on-site and cloud based ERP, software customization is usually an option. That means you can determine the important data to track, and build the application into your system.

What Can It Do?

Because you’re integrating all of your data into one master system, the options for comparison and analysis are endless! For example, you could review the way a new offering has affected your sales staff’s total performance over the last year. You could see what item in your inventory is reordered the most frequently, and how that compares to everything else you order from that distributor. You could compare improvements in employee reviews to training sessions completed… If you can think of it, chances are good that ERP systems can achieve it!

You have the ability to take sets of data and customize the way they are reported, find trends, and identify weaknesses. The ability to compare information across departments is invaluable. It’s all possible because ERP coordinates dense information into useful charts and reports.

Beyond reporting functions, ERP systems connect sales with bookkeeping, supply line with warehouse, management with HR… Centralizing information means no department or individual is left to guesswork or assumptions. Also, the longer the systems are in use, the larger trends you’re able to see. Seeing inventory trends over several years may allow you to reduce storage space and make more educated orders, for example.

You can coordinate management efforts, collaborate on budgets, track pension plans… And so much more.


Answering “What Is ERP?” isn’t simple. There’s just so much going on! Every company’s ERP system will contain different modules  – and that’s the beauty of it! ERP can help you manage all of the complexity of your organization because of its own back-end complexity, and help you make sense of it all with easy-to-use dashboards and reports. Whatever you need to coordinate, and ERP system can be developed to do just that.

If you’d like to explore your options for ERP solutions, please contact us today!

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