What is an ERP system or ERP software?

But what exactly is an ERP system?

Various business processes take place within an organization. These include: accounting, sales management, purchasing management, personnel management (HRM), customer relationship management (CRM), inventory management, quality, logistics, marketing, project management, production, etc.

Automation is often used in carrying out these processes. Many organizations use multiple software packages for this purpose. There are often several separate systems in use, such as MS office, accounting software, customer relationship management software, or custom software. As a result, data is stored in many different places and in different ways. Departments often have their own ways of working, with their own forms, lists, and approval processes.

An ERP system is ERP software that can automate the entire company at once, bringing all data and all business processes together in one package. This can deliver major benefits in efficiency and profitability. 

Advantages of an ERP system

The main advantages are that all data is stored centrally and all business processes are standardized. As a result, data from different business processes only has to be entered once, and everyone works according to a predefined process. All kinds of analyses can also be carried out easily, providing much better insight into the quality and efficiency of processes. This allows a company's management to gain much better control over the organization and steer toward better quality and efficiency. With an ERP system, companies become more efficient and therefore more profitable. Less is wasted, and productivity and quality increase while costs go down. This leads to higher customer satisfaction and therefore a stronger competitive position.

An ERP system improves your process

When implementing an ERP system, highly experienced business consultants carefully examine the business processes together with you and how they can be improved. A professional ERP software package contains thousands of “best practices” for many different industries.

A good consultant can therefore give management insight into how other companies in the industry carry out certain processes and explain what the advantages and disadvantages are. This helps management to think carefully about the business processes and how they can best be organized within their own organization.

A successful ERP implementation therefore almost always also results in a better organizational structure. Good ERP systems can adapt to an existing business process, but they can also provide an organization with structure to optimize processes. Also read the
5 important steps when implementing an ERP system.

Why doesn't everyone have an ERP system?

It is true that an ERP system makes organizations more efficient and more profitable, and it gives management optimal tools to steer the company properly. But when do you start with an ERP system? Every company started small, and you only purchase what you need at that moment. This often starts with accounting. As the company grows, many processes are often managed and controlled in Excel or other programs for specific processes, such as project management. That is when inefficiency in a company begins to manifest itself.

Of course, it is also true that ERP systems are known as expensive and complex. This prevents people from choosing ERP software. Unfortunately, invisible costs are often preferred over the visible costs of an ERP implementation. It is the wrong choice, and postponement often leads to increasing resistance. Inefficient ways of working come to be seen as the only correct ones. Maintaining data twice ultimately always leads to more errors. Change is difficult and takes a lot of energy. The costs of an ERP system can no longer be the problem.