What is ERP software (Enterprise Resource Planning Software) and how to use it? In this article we're trying to answer those questions and also the following:
- What does ERP software do?
- What is ERP and how does it work?
- What is the difference between CRM and ERP?
- Why should you invest in ERP?
- What are some examples of ERP software?
- What is included in ERP?
- Which ERP software is best?
- Why should you invest in a cloud-based ERP system?
What is ERP system definition?
The term ERP is an acronym, and it stands for Enterprise Resource Planning. But, even its full name doesn’t shed much light on what ERP is and what it does. Then, what is the most simple ERP definition? The ERP refers to the systems and software used by businesses to manage their day-to-day business activities, such as accounting, manufacturing and project management.
What is ERP software?
The ERP software ties together and defines plenty of business processes and enables the flow of data between them. The ERP system eliminates data duplication and provides data integrity. At its most basic, Enterprise Resource Planning system integrates various features into one complete system to streamline processes and information across the entire organization. With the ERP software, you can manage small or medium-sized businesses, but also enterprises, across industries.
The ERP software has a powerful and strategic business process management tool. It can be used to manage information within a company. The ERP system provides intelligence, visibility, analytics, and efficiency across every aspect of a business. The ERP technology also facilitates the flow of real-time information. Additionally, ERP software can automate your core business processes.
So, What is ERP and how does it work?
The ERP system is a software that connects different features or software into an all-in-one tool for businesses to use. It is easy to use and most importantly saves time when you don’t have to use all the different systems during the day. For example, you’ll have time tracking, project management, invoicing and resource scheduling in one platform, to name a few. The ERP system can be a cloud-based software that can be used wherever you are. Alternatively, it can be a standalone ERP system that is hosted in the company's web servers or a hybrid one. In this article, we mainly focus on cloud-based ERP systems and we will explore their advantages.
What’s the difference between the terms CRM and ERP?
At first glance, Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) seem quite similar, in many ways. They are both used to increase the overall profitability of a business. The systems overlap some areas, and they can be completely integrated into each other. However, when viewed separately it’s easier to see how the CRM and the ERP each play a role in improving efficiency and increasing sales.
Noticeably, the CRM and the ERP software use different approaches to increase profitability. By making business processes more efficient, the ERP reduces the amount of capital spent on those processes. The CRM works to increase profits by producing greater sales volume.
A business can also be using Manufacturing Resource Planning or Material Requirements Planning (MRP). But, be tuned for our upcoming blog posts on these topics, and now let's not make this more complicated.
What is CRM software?
The CRM refers to strategies, tools, and technologies used by enterprises for developing, retaining and acquiring customers. But, What is CRM software?, well the CRM software ensures that every step of the interaction with customers goes smoothly and efficiently in order to increase the overall profits. The CRM software gathers customers’ data from multiple channels. And the best part: all data is safely stored in a unified CRM database. Therefore, users can easily access and manage highly important data via one data source.
When we talk about the CRM we are usually talking about CRM software. The CRM has actually developed to include all areas of the customer experience, keeping the customers happy, and deliver the value to the customers.
What is ERP?
The ERP software is designed to make a company’s processes more effective and efficient. An ERP platform allows the company to focus on what really matters: the data.
While the CRM is focused on the customer, the ERP focuses on the business. The ERP allows for the rapid sharing of standardized information throughout all departments. The ERP software usually includes the followings:
- CRM or customer relationship management
- Product and purchase planning
- Project management
- Manufacturing and delivery planning
- Invoicing and billing management
- Accounting and financial management
- Sales management
- Supply chain management
- Multiple Branch management
- File & document sharing
- Advanced reporting & analytics
We have prepared a free e-guide on how an ERP system can improve project management to achieve better results. We highly recommend downloading the e-guide -->
What does ERP system do?
The ERP system is designed around a common, defined data structure that usually has a common database. Enterprise Resource Planning system provides access to business data from multiple activities using common constructs, definitions, and common user experiences. The ERP offers applications and tools that help all areas of a business to communicate with each other more effectively.
"There is always space for improvement, no matter how long you've been in the business."
Oscar De La Hoya
The employees in planning and scheduling, for example, have access to the same data as the staff in financial management for their specific needs. All data is available in real-time, which enables employees to make more informed business decisions even faster.
With the ERP software, all vital business functions (estimating, production, finance, human resources, marketing, sales, purchases) share a central source of up-to-the-minute information.
Why should you invest in ERP? What are the advantages of ERP?
It’s impossible to ignore the impact of the ERP in the business world. As business's data and processes are corralled into ERP software, businesses are able to align separate departments and improve workflows. Examples of specific ERP advantages and business benefits include:
- Improved business insight - from real-time information generated by reports
- Lower operational costs - through defined and more streamlined business processes
- Enhanced collaboration - from users sharing data in contracts, requisitions, and purchase orders
- Improved efficiency - through a common user experience across many business functions and managed business processes
- Consistent infrastructure - from the back office to the front office, all business activities have the same look and feel
- High user-adoption rates - from a common user experience and design
- Reduced risk - through improved data integrity and financial controls
- Lower management and operational costs - through uniform and integrated systems
Most businesses can benefit from ERP software. Every organization manages people, purchases products and services, sells something and accounts for finances. The way each activity is handled varies by industry, but every business performs these basic functions. In most cases, it’s more effective to handle these processes through an integrated software platform than through multiple applications never designed to work together.
We have prepared a short guide for on how with the usage of an ERP software the business productivity can be boosted by upto 400%. We strongly suggest you download the free ERP e-guide and take your business operations to next level.
What are some examples of ERP software? Which ERP software is best?
NetSuite is an ERP for every business size, every industry, and every role. The system has been designed for a modern company and it has built-in flexibility. So, as your business changes, you can change your business system quickly and easily. Cloud-based, mobile-enabled and social business intelligence for free and for all. NetSuite ERP gives companies the tools they need to accelerate growth and drive innovation.
SAP is a cloud-based ERP system that can also be used on-premise and hybrid. Their ERP solutions use intelligent technologies to help your business grow and optimize time and resources. It doesn’t matter if you’re a small, medium-sized or a bigger business. SAP grows with you. The ERP system helps you to manage everything from accounting and CRM to supply chain management and purchasing. SAP is real-time ERP software that can help connect people, devices, and networks. It’s fast and affordable ERP with world-class security and reliability.
Taimer is an ERP system provider that is not limited to any specific industry. Cloud-based Taimer ERP is easy to get started and simple to use, even in mobile. It also scales as the business grows. You can boost your productivity to a new level by combining Taimer with a wide range of applications and integrations. You’ll save time and money by centralizing your processes into one unified software like Taimer. The ERP software has both Free version and premium versions. The Taimer Free CRM version is targeted towards freelancers and one-man companies, while the Taimer Sales CRM and Project Management is targeted for early to medium-sized businesses. For enterprises with multiple companies and teams, ERP is recommended. You can also read how Salomaa Group has boost its efficiency using Taimer here.
Salesforce is a web-based ERP software. You can easily log, manage and analyze all activities in one place with their ERP. Salesforce enables you to build a business from marketing right through to business analysis. With ERP you can simplify your day-to-day routines and speed up work. Salesforce also turns your mobile into a portable office. You can check dashboards, reports and analytics whenever and wherever. It’s easier to share files, discuss them, and track content in real time. Salesforce brings together all your information in a single, integrated platform.
What are the types of ERP systems?
The ERP systems usually include features for accounting, resource scheduling, and sales CRM. However, you can combine different features to better meet your needs. Actually, there are three different types of ERP implementations: cloud-based, on-premise and hybrid. Explore the benefits of each, and choose the one that makes the most sense for your business.
Three types of ERP software include:
A cloud-based ERP system is a type of enterprise resource planning software that is hosted on a cloud computing platform, rather than on-premises or within an enterprise's own data center. We will explore more in this article cloud-based ERP software.
An on-premise ERP software is installed and can be run on computers on the premises of the person or organization using the software, rather than at a remote facility such as a server farm or cloud.
A hybrid ERP is also known as two-tier ERP which in simplest form means that some components of the ERP applications would be in the cloud and some on-premise.
What is included in ERP? Why is ERP important?
We have talked about different features and functions of ERP software. Still, there is so much more. Even though the different ERP systems may have similar goals to other solutions, its unique features make it a distinctive competitor in the software market. Here are some reasons why the importance of enterprise resource planning software should be considered by any organization.
The ERP software unifies many of the systems that may currently be fragmented in your organization. From product development to accounts payable, your staff will be able to access all the necessary tools for their job from one centralized system. By unifying different systems into one, you help your staff utilize their time more efficiently. Additionally, with the central database, information is much easier to retrieve. Moreover, your organization saves money with ERP software by eliminating the need for users to be trained on how to use several systems.
A central database of information also aids in improving your analytics and reporting. The ERP software makes it easier and faster for your team to generate various reports. These reports may include everything from income and expense statements to customer KPIs that offer insights into certain business functions. The ability to have access to these reports quickly enables the managers and their team(s) to make better decisions more accurately and in a shorter time period.
Tasks like generating reports, monitoring inventory levels, time tracking, and processing orders have taken employees hours to accomplish. The ERP system can automate the most tedious tasks. So, the ERP increases the organization's productivity, efficiency, and profitability.
The ERP provides ways to improve customer satisfaction. The best way to do that is to provide client-centered goods and services. Most of the ERP systems are equipped with a CRM tool or can be easily integrated with one. With an ERP, your CRM has access to data across business functions. Along with contact information, an integrated CRM can show you details such as order history and billing information, too.
Why should you invest in a cloud-based ERP software?
Implementation of a cloud-based ERP software is simple, quick, and straightforward. You’ll have the software up and running in no time. All data is in the cloud and accessible whenever or wherever, and on any device through the internet - even mobile devices.
Notably, scalability and customization are important no matter what you do. There should be flexibility to scale up and down as the business needs change. Advanced cloud-based ERP system provides even large enterprises with easily available customization options.
Every ERP software should be easily integrated into other business software like accounting software, for instance. Because of all data and available ERP integrations, the interfaces also need to work smoothly together. More integrations are available in cloud-based ERP systems than standalone ones. Just imagine a business wants to integrate the individual system with different banks, accounting software, and other tools!
Depending on the ERP vendor, the cloud-based ERP systems usually have a pay as you go model based on different factors. For instance, there is an upfront cost per user, per month on a subscription basis in a variety of systems we have reviewed in this article. This helps in saving huge costs compared to building and maintaining an ERP system in-house. As the business grows and so its demands, the company can opt into higher tiers that fit their needs.
The importance of ERP software far outweighs the initial cost, time, and effort involved in implementation, if you choose the right ERP solution. So, which ERP software is best? That’s something you’ll have to find out based on your needs, budgets, and company size. With enough careful research and thoughtful consideration, you’ll find the ERP software that is the right fit.
Every business has its own needs and priorities. The best ERP software on the market has all the features above built into one system, it is usually cloud-based, and offers flexibility in terms of company's growth. We might be biased towards the Taimer platform, but we believe Taimer has done something that no other product in the market has done before.
Taimer provides all the features we reviewed in one unified platform including CRM system and contact management, real-time visibility into project schedules, financials, trends, automated project messenger, activities & memos, time tracking, resource planning, expense management, project invoicing, file & document sharing, and real-time follow-ups, to name few. All of these features are available in different Taimer solutions as given here.
Watch the following 1-minute video about Taimer and how it can help you:
Taimer ERP Overview: CRM System, Invoicing, Project & Sales Management
Try Taimer for free so you can see how it works for your own business!
We would like to hear our reader’s opinions, suggestions, and feedback. Do you have any questions that we did not cover in this blog post? Are you using a certain ERP system? What benefits are you looking for in your ERP software? Let us know in the comments down below! Get in touch with us and we make sure your questions get answered. If you like our article, please share the love by giving your feedback and following our social media on Linkedin or Facebook, or Twitter.