ERP Meaning: Here’s What It Means and How To Use It

Don’t know what ERP is? Read on to find out what ERP means and how to use it in your business processes. 

ERP is something that can save businesses and their employees tons of time in the long run, and it can quickly increase the efficiency and effectiveness of a platform. Below, discover what ERP is and why it should matter to you! 

What Does ERP Mean?

The acronym ERP stands for Enterprise Resource Planning. It is a process that is focused on a business’s integration and project management. ERP implementation is often done using ERP software to assess databases in real-time and create insights that can help the company’s processes work better. 

One of the biggest reasons ERP systems are so powerful is the way they manage a company’s inventory and Human Resources. ERPs pull complex businesses all of their moving parts into one system. They tend to deal with a wide array of core business processes, incorporating them into a central database that can be accessed by company leaders. 

ERP software systems can also integrate other processes into the common database by adding additional modules. Some of the things that ERP systems can do include helping with purchasing inventory, Human Resources, marketing, and financial decisions. 

At the end of the day, ERP software is usually manufactured to help integrate all of the processes that are needed to run a company efficiently and concentrate them in one place. 

How Does ERP Help a Company?

In a large business or organization, it can be hard to manage every aspect of a company and make sure all of its different branches are working together well. Even when a business is small, it can be hard to make sure that all of the different departments are in harmony, which can lead to efficiency issues.  

Thanks to the evolution of cloud-based SaaS (Software as a Service) that can be used on all kinds of stationary and mobile devices, ERP software has become more and more available to organizations of all kinds. By using ERP solutions, different branches and departments can access real-time data that helps them stay on the same page. 

The interconnected nature that ERP creates in businesses can help with risk management, supply chain management, and regulatory compliance. All of these aspects of ERP help businesses be as effective as possible and capable of increasing their margins while lowering operation costs. 

How Can ERP Affect Specific Kinds of Companies?

If a company is focused on manufacturing, it will likely use its ERP system to help with purchase orders and vendor communication. ERP software can alert a company when it needs to order more raw materials and help it make sure everything is processed efficiently. 

If the company is a restaurant, ERP software can help to ensure inventory management is handled in the best way possible. It can be hard to know how much inventory to order at any given time. ERP can use machine learning and artificial intelligence to know exactly what to order, when to restock, and how long inventory will last. 

If a company deals with large numbers of people, ERP can help handle CRM (Customer Relationship Management) effectively. It can also help make HR departments more effective so companies can manage their own employees in the best way possible. 

For companies that specialize in retail, ERP software can help them know when to order more inventory for their stores. Since ERP can be cloud-based, stores can provide and share data between their different locations to increase overall resource efficiency. 

If the company has a large number of different locations, ERP software can help increase communication and clarity between locations, even when they aren’t nearby. When all of the locations get their information from the same central database, it allows them to make informed decisions that will enhance their ability to make effective business decisions. 

When data is shared in an accessible and helpful way, it helps companies achieve their maximum levels of efficiency more easily than ever before. 

How Is Cloud-Based ERP Helpful?

Throughout the history of ERP software, processes were mostly done from a mainframe computer. This meant that while the on-premises ERP software still did all of the tasks it needed to do, it was typically only accessible through the local area network. This did the job well in most circumstances, but it still limited the company when people weren’t actively in the building. 

However, since the advancement of the IoT (Internet of Things) and increased deployment options, Cloud ERP has become more and more common in businesses. This allows people to use ERP software and services no matter when they are. This gives them access to the general ledger made by their software from home or any alternative workplace. 

Since the modern world has more alternative workplaces than ever before, access to cloud-based ERP allows people to work as effectively as possible without having to leave the comfort of their own homes (or coffee shops). Of course, many people still prefer to work in normal offices, but having the option to work in different places makes ERP software much more accessible and useful.

Sources: 

1. What is ERP? | Oracle
2. Enterprise Resource Planning (ERP) Definition | Investopedia
3. What is CRM? | Salesforce.com