What Does ERP Stand for? What Are the Different Types of ERP Software?

What Does ERP Stand for - What Are the Different Types of ERP SoftwareYou may have heard about ERP, but what does ERP stand for? ERP means enterprise resource planning. It is software that helps organizations automate processes for optimization, coordinate data flow and streamline operations. Moreover, it connects the company’s financial, supply chain, operations, commerce, reporting, manufacturing, and human resources activities on a single platform. The right ERP software can help a business run efficiently.

 

What exactly is meant by an ERP system?

In simple words, an ERP system is a software that aggregates and integrates all your business transactions and core functions into a single application, which includes the following:

  • Accounting process
  • Customer relationship management
  • Production
  • Supply Chain and Inventory Management
  • Order Processing
  • Purchase
  • Financial reporting

In addition, a modern ERP system uses the latest technologies such as artificial intelligence (AI) and machine learning to provide adequate visibility into every business aspect. 

 

How does the ERP system work?

An ERP system is a suite of multiple applications that typically includes various enterprise resource planning applications or software that:

  1. Communicate with each other, and
  2. Share a common database

Most ERP systems include several small modules for better access permissions and security. Thus, employees of each department can access their modules to complete tasks. The managers can access modules to create and review reports and data.

 

Why is ERP important for business?

ERP technology is getting better every day at bringing processes together. You can accelerate, adapt and acquire business intelligence with your processes, systems, and data connections. An ERP systems can improve your business in three ways: 

  • It drives optimum performance. With AI solutions, you can access information that enhances your decision-making and reveals ways to improve operational performance.
  • It accelerates the operational effect. By combining processes and data, you bring more visibility and flexibility to employees, helping them take action quickly and deliver more value to the business as a whole.
  • It ensures business agility. Many ERP solutions are built to adapt to your needs and evolve with you, helping you proactively prepare, and respond quickly to any operational disruptions or market changes.

 

What are the signs you need ERP?

Maybe you’re struggling with your legacy system, and are wondering if it’s time to make a change. Three important signs point to the need for new ERP software:

  • You cannot meet customer expectations. Your employees and customers are mobile, but your system isn’t accommodating. It’s time to invest in tools that meet everyone’s needs. And meeting your customers’ expectations can help you gain a competitive edge.
  • The basics are not letting you grow. You may be doing well with basic equipment. But if your current software is limiting your ability to expand further into the market and grow globally, it may be time for a better and more flexible ERP system that allows growth.
  • You’re dealing with conflicting systems. Technology changes and you notice that different systems don’t work well together. Or, you may also notice your new accounting software is not compatible with your old HR system. To better utilize time and resources, a new solution is the way to go.

 

Which business functions can be optimized with ERP?

An ERP system can cover many core functions in your organization, to break down the barriers between the front office and back office and gain the ability to adapt your solution to new business priorities. Some of the major business functions include: 

Finance

Modern ERP increases profitability. It offers dashboards and AI-powered insights that give an overview of your finances to help you tap real-time information anytime and anywhere. It cuts down on entering information manually by automating daily tasks and includes tracking capabilities to help regulate your business.

 

E-commerce

Retailers face many challenges, but an ERP system can provide a complete, multi-channel commerce solution that integrates back-office, in-store and digital experiences. Customers get personalized and seamless shopping experiences through AI recommendations. Retailers can improve sales, reduce fraud and scale their business.

 

Manufacturing 

ERP capability improves business communication and automates daily processes through robotic processes. Thus, manufacturers can meet customer needs and manage resources by accessing real-time data. It also optimizes project management, production planning, and cost management.

 

Human resources

Modern ERP solutions provide ways to manage company data and streamline employee management tasks such as hiring, payroll, and other duties. You’ll be in a better position to recruit and retain employees, as well as monitor employee performance and identify HR problems before they occur.

 

Supply chain

Is your company still entering information and tracking warehouse inventory manually? You can save resources by automating these processes with ERP. Modern supply chain solutions provide dashboards, business intelligence, and even Internet of Things (IoT) technology to help you automate your inventory management.

 

Working of the ERP system

The three main ERP systems function with different deployment model options, and they are:

  1. On-premises ERP software is implemented onsite and maintained in the office space within the organization.
  2. Cloud-based ERP software is a solution where an organization accesses and stores data on any device with an internet connection.
  3. Hybrid ERP software is a mix of the above two solutions. These models allow for migration and integration of benefits that are not available in the existing system. 

 

Types of ERP software

ERP systems benefit the whole organization. There are many ERP softwares available to choose from. Some of the most popular ERP softwares used across industries are:

Oracle NetSuite

It is best for small to medium-sized businesses. It includes five suites, ERP, CRM, e-commerce, professional services automation, and human capital management. NetSuite can also manage multiple subsidiaries of an organization. 

Features include:

  • It has financial management features with built-in business intelligence.
  • Its financial planning features will reduce cycle times and enrich your planning process.
  • It has order management features that will expedite the order-to-cash process.
  • It provides functionalities for procurement, warehousing and fulfillment, supply chain management, and production management.

 

SAP S/4HANA

It is best for medium to large-size businesses. SAP dominates the ERP market. It has rich real-time data analysis capability and can be deployed on an on-premises, cloud, or hybrid basis. It includes an in-memory relational database management system which is used for advanced analytics and data processing. 

Features include:

  • Built-in intelligent technologies such as AI, machine learning, and advanced analytics.
  • It has an in-memory database and a simplified data model.
  • It has capabilities and best practices for a wide range of industries.

 

Microsoft Dynamics 365 

It is perfect for small to large businesses. It is an ERP and CRM solution developed by Microsoft. There are many Microsoft products in this line such as Dynamics GP, Dynamics NAV, Dynamics AX, and more. MS Dynamics 365 can easily integrate with other Microsoft products such as MS Project Server. 

Features include:

Dynamics 365 leverages the integration of ERP and CRM functionalities on the cloud.

It includes finance and operations, sales and marketing, and field service modules.

 

SAP ERP

It is best for large-sized businesses. It is one of the widely used ERPs across industries, countries, languages ​​, and currencies. It has a mobile interface for access anytime, anywhere. Plus, it also provides a seamless migration to SAP S/4HANA.  

Features include:

  • It has deep industry and technical knowledge.
  • SAP maintains data centers, privacy, and product security standards.
  • Its support services help you run your SAP solutions at peak performance.
  • It has long-term plans, embedded teams, and remote technical support.

 

In conclusion 

There are many options in ERP software development. Choosing the right solution depends on your organization and your goals. The ERP system should handle the business processes you are using now and integrate them under one system so that everyone in your organization views the same information.

With many software solutions to choose from, selecting and deploying an ERP system can be a daunting task. The software must meet your company’s needs and goals with the right support. Hence, choosing the right technology partner is also important.

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