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What is enterprise resource planning (ERP) software?
Enterprise resource planning software pulls day-to-day data from many departments, merging it into a single source of truth that benefits the entire organization. ERP tools combine detailed information and key metrics taken from a variety of resources, including finance, human resources, operations, manufacturing, sales, and marketing. ERP systems centralize data, minimize manual entries and can make business data visible to key stakeholders and their teams.
For example, a project management module, when included with ERP software, allows project managers to track plans and schedules. As projects progress, the ERP system records the incoming data, making it available to the appropriate staff, who then might make staffing, scheduling, and financial forecasts to react quickly to changing situations. Management can get a true picture of the progress taking place on their various projects. As a result, budgets and estimates tend to be more realistic, because they are based on accurate, real-time data.
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ERP software for different industries
Different industries have different needs from their ERP software. While all ERP systems minimize the manual processes used in day-to-day operations, a wide variety of ERP systems are available. Businesses, whether they are in the construction industry (and using a project-based ERP) or in sales and marketing (with a focus on customer satisfaction) can take advantage of ERP software.
When manufacturing ERP software is used, a business can adapt more quickly to changes in the sales pipeline. Upcoming workloads can be planned more efficiently. Human resources then increases hiring and ensures the plant is staffed. Logistics finds the fastest delivery routes from the latest data. Warehouse management receives constant updates on their inventory, allowing them to fill orders faster. The financial team can improve their forecasts with accurate data. Manufacturing and product teams streamline processes with interconnected features that bring together the functions of other software systems, including:
- Supply chain management
- Inventory management
- Material requirements planning (MRP)
- Fleet management
- Work order software
Sales, marketing, and customer service teams increase functionality and satisfy existing customers with centralized data from ERP modules, including:
- Customer relationship management (CRM)
- Contract management
- Customer service
- Helpdesk
- Marketing automation
HR teams organize workforce productivity through integrated software systems, including ERP modules for:
Interconnected data and business intelligence software provide financial and accounting teams with more accurate forecasts. These tools reduce risk, improve collaboration, and drive growth through automation and data sharing. Overall, ERP suites bring together data via a fully integrated system, often saving the company money that would otherwise be spent on hundreds of unconnected apps.
Custom module combinations fit the needs of retail, franchise, logistics, medical, and many other industries. These industry-specific tools ensure regulatory compliance and the speedy delivery of products. Many modern tools include artificial intelligence (AI) features that help identify process improvements, provide detailed forecasts, and ensure that the company can pivot quickly after manufacturing setbacks.
Because of the complexity and number of features available through ERP software, it has been traditionally adopted by large enterprise corporations, but in recent years, ERP implementations have proven useful even for small and medium-sized businesses (SMBs).
Compare top ERP vendors
Each of these enterprise resource planning systems include modules for sales, accounting and finance, and management of the supply chain. You’ll need to determine which modules are most important to your business before you decide on a solution.
| Product | Marketing | HR | Project Management |
|---|---|---|---|
 |
No | Yes | No |
 |
yes | yes | yes |
 |
No | No | Yes |
 |
Yes | Yes | Yes |
 |
No | No | Yes |
 |
No | No | No |
 |
No | Yes | Yes |
 |
No | Yes | Yes |
For more comparison charts, jump to:
- Enterprise ERP comparison of SAP, Oracle, Microsoft Dynamics
- Midmarket ERP software comparison
- Small and medium-sized business ERP software comparison
Enterprise resource planning software varies widely between systems, industry focuses, and offered features, however, most systems will offer several of these modules:
- Human resources
- CRM
- Finance/accounting
- IT helpdesk
- eCommerce
- Order processing
- Inventory and procurement
In addition to department specific modules like those listed above, many ERP platforms target individual industries, such as manufacturing, field service, and technology. Industry-focused ERP systems combine helpful features, and offer a useful starting point for those new to ERP software. Additionally, vendors do offer custom ERP software configuration options, allowing organizations to design their own business rules.
Human resources
HR software modules connect your employee information and records with all the systems in your ERP. Payroll, time tracking, individual department scheduling and timesheets, succession planning, and hiring information all live in one place and can sync directly with accounting and financial management tools to give companies a cohesive understanding of how human resources directly affect the financial health of the whole company.
CRM
CRM modules, within an ERP software system, streamline sales-critical information with production and product teams. This means a seamless processing of contracts from the sales team to production to shipping and returns. A CRM in an ERP houses complete customer contact information and makes account notes available to all stakeholders in the purchase and production process.
Finance and accounting
Financial management and accounting modules in ERP systems combine financial information from across all the connected modules, giving an organization a complete picture of their accounting methods and revenue. These accounting tools help companies to merge profit and loss reports, and build forecasts that take into account information from the entire company.
IT helpdesk
IT helpdesk modules keep your company’s technology running smoothly. With integrated IT and ERP systems, your IT team can field questions and bugs from across the company, prioritize those jobs, and quickly follow up with stakeholders. These tools help IT departments track the ROI they bring to the team, their financial benefit to the company, and the impact of technology and software upgrades.
eCommerce
Connecting your company’s eCommerce website directly with shipping and product development modules within an ERP is a good idea. Purchasing an ERP with eCommerce integration will help your team draw connections between website health and overall revenue growth. It can also help to pinpoint bottlenecks that slow down production, or logistics issues that delay delivery. Additionally, there are eCommerce accounting modules which integrate online storefronts with back-end inventories. (Salesforce
Order processing
While work order software alone brings continuity to the sales and service sectors of a company, integrating order processing software directly with an ERP gives business analysts insight into both inefficiencies “and” improvements across the sales cycle.
Inventory and procurement
Inventory and procurement software helps companies manage their warehouse and stockroom inventories. These tools ensure businesses keep the right amount of product in stock to cover seasonal and expected surges in demand. These tools, when connected with an ERP, help companies forecast product supply needs and ensure the right staff, shelf space, and logistical coverage.
Project-based ERP
Project-based ERP is a fairly recent innovation, and supports ERP projects. Managing projects has become increasingly complex over the past decade. As a result, large projects are often completed late and over-budget. Project management software can be used by individuals, small teams, and enterprise businesses to improve efficiency and communications. Deltek offers project-based ERPs.
What are the benefits of ERP software?
Enterprise resource planning software provides business operations with many benefits, including operational efficiency to improve the organization’s overall functionality. Accounting, customer relationship management, and business management functions improve significantly.
Reduced software overhead
ERP software allows teams to consolidate their tools into one unified system. Instead of paying separate subscriptions for services, such as core HR, CRM, shipping, and supply chain and inventory management, teams pay for a single platform that handles each of these tasks in a centralized system. The simplest way to achieve this goal is finding a system that requires no integration. Depending on the business’ size and complexity, reducing the number of software system subscriptions can significantly cut monthly overhead.
Increased communication
When data from all sectors of the company are integrated in a single software program to plan and track business events, all of that data can then be made available for team review. Many modern ERP systems invest heavily in analysis tools and visualizations that let team members create reports that show progress, indicate inventory levels, and notify colleagues of wins. Enterprise resource planning software then acts as the single source of truth for stakeholders to compare successes, and prepare for bumps in the road.
Silo reduction
Business silos—where teams work independent of one another to everyone’s detriment—greatly reduce company productivity. An ERP helps businesses publicize their goals and lets teams share their plans with one another. Teams who have access to the same data can compare notes across departments, helping everyone move toward those big business goals.
Standardization of manufacturing processes
For large manufacturing corporations with several facilities, sharing manufacturing plans and best practices can be vital for product and process standardization. ERP systems allow manufacturing teams to store manuals, blueprints, regulatory information, and vital statistics for each process in a single, searchable location. This allows different parts of the company to replicate processes across county and country lines without sacrificing quality or speed.
Inventory reduction
Whether it’s the number of widgets your company makes or the humans that install them, keeping more resources on hand than you need costs money. Enterprise resource planning solutions provide inventory management and analysis that allows companies to run leaner. Using technology like RFID tags, geofencing, and biometric data, enterprise resource planning systems can track assets through their entire lifecycle, from supply to sale. Many ERP systems will suggest inventory improvements over time. With reduced inventories, companies can repurpose storage space and cut down on their payroll costs.
Standardization of human resources information
Many ERP solutions provide Core HR products like payroll, scheduling, time clock, and benefits management. These modules connect the front of house, warehouse, and C-suite. With core HR features, an ERP system can use the time clock software to calculate payroll and benefits, and managers can access employee information when building schedules. Because employees are a company’s most expensive and valuable resource, it’s vital to connect the software that manages them with the rest of the enterprise’s data.
Choosing an ERP software solution
ERP software and the cloud
Cloud ERP describes an enterprise resource planning system operating from a vendor’s cloud platform, rather than an on-premises network. The cloud hosts the provides ERP software and, with organizations accessing the service over the internet. Because the software is hosted by a cloud based ERP system, the service tends to be superior, and comes without the hassle of integrating it with the business’s computer system.
The desire for cloud ERP systems has grown significantly in the last few years, primarily because of their abilities to access and analyze huge amounts of data in near real-time. Cloud computing lets a company leverage the servers and computing power of a SaaS vendor—rather than purchasing their own server farm or data center. Renting computing power from cloud vendors has significantly democratized highly complex computing programs like ERP, making them available to a wide variety of customers. Some examples of cloud ERP services are Oracle ERP Cloud, Sage Intacct, and Netsuite ERP Cloud (sometimes referred to as Oracle Netsuite).
Enterprise resource planning cloud-based software is designed to support the basic core functions that are needed from any ERP. From this software base, a variety of modules (or ERP applications) can be added to augment business functions. Organizations select which modules to add, based on their industry, and their individual business needs. The cloud ERP modules available typically include:
- Customer relationship management (CRM)
- Human resource management (HRM)
- Human capital management (HCM)
- Financial management and accounting
- Material requirements planning (MRP)
- Order management
- Procurement
- Inventory management
- Supply chain management
- Project management
Onboarding and time to market
ERP software is best characterized as a category of categories: each instance of the software can be made up of varying features and modules that best suit the needs of the company.
Because of its complexity, integration of an ERP system can take anywhere from a couple of weeks to several years depending on the size and needs of the purchasing company.
As you research your next solution, pay careful attention to the feature selection. Watch for any ERP integrations that can be made to existing software that is not covered by those features, and the price of any custom or add-on features. You should also ask ERP vendors up-front whether they have dedicated onboarding teams to assist you in those first several months and whether they charge an onboarding fee for any and all initial services.
Pricing
The ERP software market has exploded in the last 25 years, providing companies with lots of options for both single license and subscription SaaS products in varying price ranges. Depending on the features your company needs, an ERP software can range from a couple dollars per user, per month at the SMB level to many thousands of dollars a month for an enterprise corporation. Refer to individual vendors on the Products Page for more detailed information.
Potential pitfalls
Carefully consider any ERP software purchase. These systems can be expensive and will potentially manage the majority of your company’s data. Be sure the right software has been chosen, before signing a contract. Ask the ERP vendor if they provide onboarding support for data uploads, and integrations, with other systems. Additionally, be sure the ERP supports exporting data in a user-friendly way.
The ERP buying process is complex and filled with customization requests and uncertainty about vendor capabilities. Seeking out third-party help for ERP implementation is common, and—in the case of enterprise vendors—usually necessary.
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