Enterprise Resource Planning System (ERP): The Daily Definition

 In Best Practices, The Daily Definition

What is an enterprise resource planning system (ERP)?

Enterprise Resource Planning System ERP

An enterprise resource planning system (ERP) is the software application used to manage a business’ processes. Put another way, an ERP system supports and sustains a company’s operations. As the central hub of an organization’s operational strategy, an ERP system is the engine that moves a company forward.

An example:

We’re not going to lie this is our favorite thing to talk about. 

If you aren’t familiar with what ERP systems do for your company, picture this:

A customer calls in and speaks with a customer service rep. That CSR accesses the customer’s purchase history with the company while still on the phone with them, then hands them over to the sales rep who worked with the customer before. That sales rep looks up current inventory data for goods the customer is interested in buying. The sales rep places an order. The warehouse receives the order, then prints a pick ticket. The order is picked, packed, and prepared for shipping.

Every employee in this scenario used the same software to complete their tasks. There was no logging in and out of different systems, no data discrepancies, and no time delays as separate solutions communicated with each other. That’s ERP.

Our two cents:

This illustration is only a taste of what the right ERP solution delivers. Let’s say that this order caused inventory levels to dip beneath the reorder point. Good ERP systems recognize that and generate purchase orders accordingly. Special tax requirements? ERP makes it easy. Need to set different price levels? Incorporate some automation? Maybe bring in your ecommerce storefronts? ERP will take it from there.

If you’re looking to standardize your processes, introduce some efficiency, or save on IT costs, an ERP system is what you need. The right ERP solution will transform your business — if you’re currently doing business without one, we encourage you to reconsider.

We hope it goes without saying, but if you want more information on all that ERP systems have to offer businesses large and small, reach out to us! We’d love to start a conversation with you.

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