What Is ERP (Enterprise Resource Planning)? A Complete Guide (2024)

Growing companies eventually reach a point where spreadsheets no longer cut it. That’swhere enterprise resource planning software comes in: ERP systems collect and organize keybusiness information and help organizations run lean, efficient operations, even as theyexpand. Most business professionals have heard the term “ERP,” but they may notknow exactly what enterprise resource planning systems can do for their teams.

What Is Enterprise Resource Planning (ERP)?

ERP is a category of business software that automates business processes and providesinsights and internal controls, drawing on a central database that collects inputs fromdepartments including accounting, manufacturing, supply chain management, sales, marketingand human resources (HR).

Every business has multiple stakeholders collaborating to make things work. However, itbecomes challenging when critical information is scattered across disconnected systems. Forexample, the accounting and FP&A teams could each have different spreadsheets withdifferent figures for expense tracking.

ERP systems centralize data, provide cross-departmental visibility, enable efficientanalysis, resolve data conflicts, and drive process improvements. That translates to costsavings and better productivity as people spend less time digging for needed data.

Video: What Is ERP?

Key Takeaways

• ERP is critical business software that collects information from various departments ina common database, enabling leaders to monitor the pulse of a company using a singlevision of reality.
• ERP systems unify critical business functions like finance, manufacturing, inventory andorder management, customer communication, sales and marketing, project management andhuman resources. One major feature is detailed analytics and reporting on eachdepartment.
• ERP can generate major time and financial savings by providing organization-widevisibility that spotlights inefficient manual processes and reveals growthopportunities.
• There are several deployment models for ERP software, including on-premises, cloud andhybrid. While cloud ERP has become extremely popular in recent years, the best approachfor any given company depends on its needs.
• Businesses should ensure they understand the capabilities, implementation models,integration requirements and total cost of ownership of a short list of softwareproviders before picking a winner.

ERP Explained

Enterprise resource planning — a moniker coined by Gartner in 1990 — can beconfusing because ERP is not a standalone application. ERP is a category of businesssoftware, and ERP systems comprise various modules, each addressing a specific businessrequirement.

For example, products-based companies typically have modules for accounting, inventory andorder management, customer relationship management (CRM) and, if they produce or assembleproducts, manufacturing. Services businesses may turn to modules for accounting, projectmanagement, professional services automation, and CRM.

Why Is ERP Important for Businesses?

ERP systems have become table stakes for businesses looking to use resources wisely. They canhelp leaders reallocate human and financial capital or build more efficient core businessprocesses that save money without sacrificing quality or performance.

An ERP is also an asset when it comes to planning and coordination. Employees can see currentinventory and customer orders in detail, then compare supplier purchase orders and forecastfuture demand. If necessary, they can adjust to prevent problems. ERP software also improvescommunication and collaboration because workers can check on the status of other departmentsto guide their own decisions.

As a comprehensive data source, an ERP system also provides reports and analytics that can bedifference-makers for the business. Turning a vast trove of information into charts andgraphs that clearly illustrate trends and help model possible results is an ERP capabilityexecutives find invaluable.

13 Components of an ERP System

An ERP comprises several modules — bundles of features tailored for various aspects ofthe business, including back- and front-office roles. This goes beyond financials andfundamental functions like supply chain management and customer communication.

While most companies find that modern ERPs support their businesses “out of thebox,” some firms need to add to the extensive built-in functionality. If you have alot of specialized processes, look for an extensible system that allows your integrator orIT staff to write code that adds needed features or that can integrate with homegrown orlegacy solutions.

However, before going the custom route, take a close look at your processes — theprebuilt functionality and configurations modern ERP solutions support are based on bestpractices gathered from thousands of companies. Aim to minimize customizations.

Core ERP Modules

1. Financial Management:Afinance module, thefoundation of every ERP system, manages the general ledger and all financial data.Ittracks every transaction, including accounts payable (AP) and accounts receivable(AR),and handles reconciliations and financial reporting.

2. Human Resource Management (HRM):Ahuman resources management(HRM)or human capital management (HCM) moduleis like a workforcemanagement module. It keeps employee records with detailed information, likeavailablePTO and performance reviews, and can tease workforce trends in various departmentsordemographics.

3. Supply Chain Management:Supply chain managementmodulesenable companies to oversee the flow of goods from suppliersthrough manufacturing and into customers' hands. Keep production running smoothly byensuring all materials are available and in the correct locations and accuratelyschedule machinery and labor resources.

4. Customer Relationship Management (CRM):CRM is a popular moduleforbusinesses in various industries. It tracks all client communications, assists withleadmanagement, and can enhance customer service and boost sales.

Additional ERP Modules

5. Manufacturing: Manufacturing can be complicated, and thismodulehelps companies coordinate all the steps to make products. The module can ensureproduction meets demand and monitor the number of in-progress and finished items.

6. Inventory Management: Aninventorymanagement moduleshows current inventory levels down to the SKU level and updates those numbers inrealtime. It also measures key inventory-related metrics. Any products-based companyneedsthis module to optimize stock on hand based on current and forecasted demand.

7. Project Management: Services businesses often utilize aprofessional servicesautomation (PSA) or projectmanagement module to plan and track projects, including the time and resources spentonthem. It can simplify client billing and encourage collaboration among staff membersworking on a project.

8. Ecommerce: Anecommerce module allows retailers and brands tomanage their online stores' back and front ends. With this application, they canchangethe site's look and feel and add and update product pages.

9. Marketing Automation: This module manages marketing efforts acrossalldigital channels — email, web, and social — and enables organizations tooptimize and personalize their messaging. Amarketing automation tool can boostleads,sales,and customer loyalty.

10. Procurement: Theprocurement module manages rawmaterials or finished goods purchasing. It can automate requests for quotes andpurchaseorders and minimize overbuying and underbuying when linked to demand planning.

11. Order Management: This application monitors and prioritizes customerorders from all channels as they come in and tracks their progress through delivery.Anorder management module can speed upfulfillmentanddelivery times and improve the customer experience.

12. Warehouse Management: Awarehouse management module directs activitieslikereceiving, picking, packing and shipping. It can save time and cost in the warehousebyidentifying more efficient ways to execute these tasks.

13. Workforce Management: Aworkforce management(WFM) module keeps track of attendance and hours worked; some can alsomanagepayroll. This tool can record absenteeism and productivity by department, team, andindividual employees.

A unified system can organize your operations and improve processes to reduce obstacles.Over-reliance on email and spreadsheets to collate and share critical information indicatesthat you need ERP. Spreadsheets require frequent, manual updates, meaning they are oftenoutdated. Sharing sensitive data via email poses real security risks and can make itdifficult to find what you need. A lack of integration among systems indicates you’reready for ERP – and having all the modules in one place simplifies your business. Thesystem can eliminate manual data transfers and fickle connections by pulling informationfrom all key business functions into one place.

ERP Integration and Data Sharing

Virtually every organization considering an ERP implementation will have systems in placethatcouldbe replaced by modules of the ERP under consideration. Assuch, part of adopting an ERP system involves determining which existing systems will bereplaced, which must be integrated, and which will be left to stand independently.

Remember, the more information fed into the ERP, the more value you get from your investment,so avoid leaving systems to stand apart from the ERP. Deciding when to integrate existingsystems with your ERP and when to replace those systems with modules from your ERP vendorcomes down to three considerations:

1. Is the existing system doing the job you need it to do? If not, thenthere’s a good case to be made for using the relevant module offered by your ERPvendor.
2. If the existing system is a keeper, is there a connector available from the ERPvendor, the existing system vendor or a third party to get data flowingbetween the ERP and your existing system? And if so, how good is it? Data migration iscomplex. These connectors can do a decent job of integrating systems from differentvendors, but quality and commitment to updates can vary. Remember: Upgrades to the ERPor the standalone system can break connectors or require rework. In the worst case, thelack of a new connector could derail upgrade plans completely.
3. If a connector exists, does it operate in real-time and keep all necessary dataflowing to and from each system? Some connectors operate in real time, andothers sync up systems daily or weekly. Some move a limited data set between systems,and some work in only one direction — from an inventory management system into theERP. If your team has done extensive custom configurations, the connector might not knowsome data types.

These potential complications highlight the advantage of using modules from a single providerto manage different business functions. It’s a good idea to use one vendor to addressyour needs whenever possible. This avoids the entire issue of integrations as the providerbuilds these modules to work together. A unified ERP system not only prevents problems butcan also encourage adoption by flattening the learning curve.

If you decide to keep best-of-breed systems and integrate them with your chosen ERP, realizethat verifying the correct functioning of connectors will become part of every upgrade cycleand that extensive customizations can cause issues. If you aim to automate back-officefunctions with real-time updates, bidirectional operation is important. Ensure you have theexpertise, either in-house or through a partner or supplier, to keep data flowing.

12 Benefits of Implementing ERP Systems

Today’s ERP solutionshave rich featuresetsthatbring countless benefits to businesses. This software has become universally adopted byalmost all companies of a certain size because it drives real improvements. While what anindividual firm sees as the greatest value of this technology will vary, here are keyuniversal advantages ERP delivers:

1. Cost Savings

The biggest value proposition of ERP systems is that they can save your organization money inseveral ways. By automating many simple, repetitive tasks, you minimize errors and the needto add employees at the same rate as business growth. Cross-company visibility makes iteasier to spot inefficiencies that drive up costs and leads to better deployment of allresources, from labor to inventory to equipment. And with cloud ERP, companies may quicklysee incremental value from the software, over and above what they’re spending.

2. Workflow Visibility

With all workflows and information in one place, employees with access to the system can seethe status of projects and the performance of different business functions relevant to theirjobs. This visibility may be particularly valuable to managers and leaders, and it’sfar faster and easier than searching for the right documents and constantly askingcolleagues for updates.

3. Reporting and Analytics

Data is useful only if companies can analyze and understand it; an ERP helps with that.Leading solutions have impressive reporting and analytics tools that allow users to trackKPIs and display any metrics or comparisons they can dream up. Since an ERP isall-encompassing, it can help a business understand how a change or problem with a processin one department affects the rest of the company.

4. Centralized Data

Because ERPs can access real-time data across the company, these systems can uncoverimpactful trends and provide extensive business insights. This leads to betterdecision-making by organizational leaders who now have easy access to all relevant data.

5. Regulatory Compliance

Financial reporting standards and governmental and industry-specific data securityregulations change frequently, and an ERP can help your company stay safe and compliant. AnERP provides an audit trail by tracking the lifecycle of each transaction, includingadherence to required approval workflows. Businesses may also reduce the chance of errorsand related compliance snafus with automation. ERP software provides financial reports thatcomply with standards and regulations, and SaaS applications are well-equipped to helpcompanies with PCI-DSS compliance.

6. Risk Management through Mobility

ERP technology reduces risk in a few ways. Granular access control and defined approvalworkflows can strengthenfinancialcontrolsandreduce fraud. Additionally, more accurate data prevents mistakes that could lead to lostsales or fines. And finally, the ability to see the status of the entire operation enablesemployees to quickly handle risks posed by business disruptions.

7. Data Security

ERP providers understand that your system houses critical, sensitive data and take necessarysteps to ensure it is secure. This diligence is more important than ever as the volume andscale of cyberattacks increase. Vendor-managedcloud ERP software, particularly, uses cutting-edgesecurity protocols to ensure your company doesn’t fall victim to a damaging attack.

8. Increased Productivity

Employees are most effective when they work together. ERP solutions make it easy to shareinformation — like purchase orders, contracts, and customer-support records —among teams. It knocks down walls between departments by giving employees appropriate accessto real-time data on related business functions.

9. Scalability

The right ERP system will be scalable and flexible enough to meet your company’s needstoday and for the foreseeable future. Cloud systems adapt to minor and major operationalchanges even as the amount of data the organization captures and the demand for accessincrease.

10. Flexibility

While ERP software helps businesses follow best practices, it also offers the flexibility tosupport unique processes and objectives. The system allows administrators to buildcompany-specific workflows and create automatic reports important to different departmentsand executives. An ERP enhances your organization’s innovation and creativity.

11. Customer Service and Partner Management

An ERP can strengthen a company’s partner and customer relationships. It can provideinsights on suppliers, shipping carriers and service providers, with the cloud enabling evenbetter, more convenient information exchange. Regarding customers, the solution can tracksurvey responses, support tickets, returns and more so the organization can focus oncustomer satisfaction.

12. Forecasting

Finance and FP&A departments are pressured to develop accurate forecasts in response toevolving conditions. Such dynamic financial forecasting empowers organizations to quicklyadjust plans based on real-time data and new insights. Seamless synchronization between yourERP and planning and budgeting systems empowers finance teams to easily seed actuals andinformation in daily planning and forecasts, eliminating the need for departments tocoordinate and consolidate offline.

Regularly review your current technology and ask: Is our technology helping — orholding us back? When outdated or inadequate systems introduce inefficiencies, muddy thedata waters or can’t support changes the business wants to make, it’s time tolook for a new solution. Inaccurate data is another sign it’s time for your first or anew ERP system. If your data is unreliable, you can’t trust the reports and insightsit produces — and that’s a big problem.

6 ERP Implementation Challenges

Despite all the value ERP brings,companies may encounter challenges in building the business case fora system or implementing it. It’s important to be aware of these potential roadblocksbefore you adopt a system so you can adequately prepare and temper doubts from stakeholders.At the same time, realize that many of these can be avoided by creating a detailed plan andselecting the right ERP vendor.

As you prepare for an ERP project, keep these concerns in mind:

1. Budget Considerations

Because they were expensive to purchase, implement and maintain, early ERP systems wereaccessible only to large companies. However, that hasn’t been the case for two-plusdecades. While ERPs still require time and financial investment, the technology has becomemuch more affordable thanks to both SaaS systems that charge a recurring fee and moresolutions designed for small and midsize businessesentering the market. For instance,organizations can use tools tocalculate estimated savingsafter one and threeyears to determine when returns will surpass costs.

2. Employee Training

Like any new tech, ERP has a learning curve. Anyone who will use the software —ideally, most or all of your employees — requires some training. Although there may beresistance at first, that should fade away as people realize how much the technology willhelp them. Newer systems that receive frequent updates are more intuitive and user-friendly,reducing training requirements and increasing adoption.

3. Data Conversion and Migration Challenges

When moving to a new ERP, you may need to convert some data into a format compatible with thenew platform. This can lead to unexpected costs and delays, so review your databases, andwork with your IT team or an integration partner to identify potential data compatibilityissues early on. Then, you can factor conversion efforts into theERP implementation plan.

4. Resistance to Change

An ERP system is loaded with features that can be daunting to your workforce. However, thesoftware available today is far easier to use than legacy systems because vendors havefocused on improving the user experience. Additionally, employees need access to only themodules and dashboards required for their jobs, which can make them more approachable.Thorough training should temper concerns about complexity.

5. Dedicated IT Resources

In the past, maintenance was a large expense that deterred lower-revenue businesses fromadopting ERP. Not only did a company need an IT staff to handle patches, securityandrequired system upgrades, it often had to pay thevendor or a third-party service provider for its expertise. This is less of a concern with aSaaS system because the provider takes care of all maintenance and regularly moves allcustomers to the latest version — and it’s all built into the subscriptionprice. Companies concerned about maintenance should thoroughly vet a potential supplier toensure it offers a true vendor-managed SaaS system.

6. Doesn’t Solve Process and Policy Issues

If you have error-prone or inefficient processes, an ERP won’t necessarily fix them,even though it may increase accuracy. Itcan, however, uncover problems inyour operations and help you brainstorm better ways to do business. The same goes forpolicies that hold the organization back — it’s up to you to adjust those andthen configure the system to support better ways of doing business.

For business units, ERP software can automate many error-prone tasks, like accountreconciliations,customerbillingand orderprocessing, and provide the information teams need to operate more efficiently.

But the real beauty of ERP is that it can give both a 10,000-foot view of the company’shealthanddetailed insights into a specific process or KPI by not onlystoring and organizing data, but identifying patterns and flagging anomalies that requireinvestigation. Try that with a spreadsheet.

ERP Deployment Options

Various ERP deployment models address the needs of different organizations, and it’simportant to understand the unique characteristics of each so you can identify the bestoption for your business. There is some nuance here, like multiple “cloud”deployment versions — it’s not just on-premises vs. cloud.

On-Premises ERP

With an on-premises system, the business runs the software on its servers and is responsiblefor security, maintenance, upgrades, and other fixes. Upkeep usually requires in-house ITstaffers with the required expertise. For many years, on-premises ERP was the only option.Still, the popularity of this deployment modelhas declined rapidly in recent years,andmarket-watcher IDC predicts continued declines.

Cloud-Based ERP

Cloud-based ERP runs on remote servers managed by a third party. Users typically access acloud ERP through a web browser, giving them greater flexibility — they can dig intoinformation and reports from anywhere with an internet connection. There are multipledeployment options for cloud ERP, including hosted cloud and true cloud.

• Hosted Cloud Solution: A company purchases a license but runs it onremote servers managed by a third party. The servers and other hardware are often rentedfrom the hosting company. Your data is stored in a private cloud as a separate instanceof the ERP used by just one company. Your infrastructure is not shared with otherorganizations, so this is sometimes called single tenant. This setup can give the clientgreater control over the software and allow for more customizations, but it also createsmore work for the business. Think of it as a middle ground between on-premises and truecloud software.
• True Cloud Solution: A true cloud deployment allows companies to pay afee for access to servers and software they do not have to manage. SaaS ERP solutionsare a popular version of a true cloud solution, as the vendor handles everything on theback end, including patches and upgrades. True cloud is also known as multi-tenantbecause multiple businesses use the same software instance and hardware. This reducesthe need for an in-house IT team and ensures that the company always has the software'smost up-to-date, secure version.

Hybrid ERP

Hybrid ERP combines elements of on-premises and clouddeployments. One hybrid approach is two-tier ERP, where a corporation keeps its on-premisesERP in place at headquarters but employs cloud systems for subsidiaries or certain regionaloffices. These cloud solutions are then integrated with the on-premises system. Othercompanies may use cloud solutions for certain business needs while using their on-premisessystems for other functions. Either way, the cloud systems must be linked to the on-premisesplatform to ensure a steady flow of information — often easier said than done.

Open-Source ERP

Like other open-source applications, open-source ERP is an inexpensive, sometimes free,alternative suitable for some companies. Many open-source ERP providers allow businesses todownload their software for free and only charge a low annual fee if the customer wantscloud access. These solutions have improved, with more modern web-based interfaces and agrowing number of modules, but companies need to understand what they’re taking onwith an open-source ERP. Support from the provider will be minimal, and configurations andsystem improvements tend to fall on the client. That means you need technical staff with adeep knowledge of developing and configuring the software.

Cloud ERP has since taken off and fueled much of the innovation over the past two decades.This computing model has allowed companies to better collaborate among internal departmentsand with external partners, sparking new insights that save businesses time and money andpush them forward.

The Future of ERP

Now that companies understand the tremendous benefits of an ERP, they’re looking forways to up the game. Technology like artificial intelligence (AI), blockchain, augmentedreality (AR), and the Internet of Things (IoT) are shaping today’sERP trends. Many of these technologies are alreadyembedded within industry-leading ERP solutions.

Artificial Intelligence and Machine Learning in ERP

AI and machine learning, for example, can automate account reconciliations and flagtransactions that call for a closer look. This saves the accounting team time and offloads atask most don’t look forward to. Machine-learning technology improves as it processesmore transactions and can help develop more accurate forecasts.

Blockchain for Supply Chain Management

Blockchain packagesdata securelyand can increase transparency among companies in a supply chain. Specifically, it can showthe status of specific products in detail and create an in-depth audit trail of anitem’s journey from raw material to finished goods. This also provides informationfrom which the ERP can draw insights.

AR for ERP

Augmented reality has gained a foothold in retail, allowing consumers to virtually place arug or 3D image of a piece of furniture in their living rooms to get a sense of how it wouldlook before purchasing. The ERP can store all the data points and images needed to make ARwork.

Internet of Things (IoT) Integrations

Finally, more companies recognize the value of IoT devices, like sensors, scanners, andcameras, that can feed information back to the ERP. For instance, a sensor that monitors theperformance of a piece of warehouse automation equipment could alert amanagerwhen the machinery starts operating more slowly. That could be a sign the equipment needsrepair, and the business can intervene before it breaks and disrupts operations. An IoTtracker on a delivery truck could show drivers taking inefficient routes and suggest theyalways use GPS.

Unified ERP System

Aside from these buzzy technologies, more businesses want to consolidate all theirapplications on a single platform. Recent research from Gartner reveals that40% ofservices companieswill unify core processes like financials, HR, order-to-cash,procurement, and operations in a single suite by 2026. As software providers expand theirofferings and more businesses realize the value of a unified ERP system, this will becomeincreasingly common.

How to Select the Right ERP System

NetSuite offers a unified, true cloud ERP system to help companies run their entire businessin one place. Its offerings include applications for financials, inventory and ordermanagement, HR, professional services automation, omnichannel commerce and advancedanalytics. All these applications are natively integrated, meaning there are no connectionsto manage, and users enjoy a common interface as they move between modules.

NetSuite was born on the cloud and has over 37,000customers ranging from startups tomultinational enterprises. It has robust reporting capabilities to deliver insights acrossyour business and role-based permissions, so employees only have access to the necessaryinformation.

1. Perform a Needs Assessment

The“right” ERP system for your companyis the one that supports yourneeds nowandis scalable enough to grow with your business, with modulesand features that drive savings and help you capitalize on opportunities. This is a bigdecision, so take the time to evaluate all options thoroughly.

Purchasing and implementing an ERP platform used to be intimidating, even overwhelming. Butthe solutions available today allow companies to take it one step at a time and add whatthey need when they need it. Never has this software been within reach for moreorganizations, and leaders need to take advantage of that. An ERP has become table stakesfor any company that wants the visibility and insights to compete and win.

2. Evaluate Vendors

An ERP is a critical business system that must mesh with how each company operates, so thereis no one “best” platform. Required capabilities, preferred deployment model andcompany size will all affect your decision whenbuying an ERP system. Look to established vendorswithproven records of success working with companies in your vertical. Always ask for referencecustomers and check out success stories. Businesses should also consider the softwareprovider’s roadmap for emerging technologies like IoT and blockchain.

3. Assess Customization and Scalability

Start with the modules foundational to your business and build from there. Companies oftenbegin with a finance module to automate basic accounting tasks and allow leaders to easilyview available cash and money flow into and out of the organization. Products-basedcompanies typically want to digitize inventory and order management immediately because thatcan generate rapid and significant savings around procurement, storage, and shipping. Anecommerce application that plugs into the ERP is a priority for sellers that rely on thissales channel. On the other hand, service organizations may start with a PSA (professionalservices automation) application to simplify employee time, resource tracking, and projectbilling.

After that, aCRMmodule is a prudentinvestment because it can improve customer communications, while supply chain managementmodules for manufacturing, procurement and/or warehouse management can better alignpurchasing and production with demand. A marketing automation solution integrated with theERP to attract and retain customers through creative techniques may be another logicaladdition.

Businesses with many employees should addhumanresources management(HRMS)/human capital management (HCM) systems sooner rather than later to improvethe employee experience and earn a reputation as a great workplace.

4. Perform a Total Cost of Ownership (TCO) Analysis

The cost of an ERP project varies widely depending on vendor, modules, and deployment model.ERP systems are priced with the target audience's needs in mind, so those built for emergingand high-growth businesses will be more affordable than those used by Fortune 500enterprises.

Cloud-based ERP, and specifically SaaS options, usually have lower upfront costs thanon-premises software because there’s no hardware to purchase nor system experts tohire. With on-premises software, companies purchase a perpetual license that’s moreexpensive, but it’s a one-time expense. A hybrid model could be even more expensive,as it requires many resources to support on-premises ERP and the subscription fees for cloudapplications.

The costs of ERP go beyond licensing. When calculating theTCO of various ERP solutions, factor in implementationand operating expenses related to customization, maintenance, training, upgrades andsupport.

ERP Case Studies

used to managetheir inventory manually with spreadsheets, and they relied on Sage Live for financial data.When sales doubled annually for the men's grooming product retailer, they quickly discoveredtheir outdated processes were causing duplicate entries. They adopted NetSuite ERP, whichallowed them to catch inventory-related bookkeeping errors, eliminate external accountants,boost sales, and gain better insights into margins and inventory.

Two friends found major process inefficiencies when they transitioned their candy wholesalebusiness into Green Rabbit, a company specializing in perishable goods logistics. Relying onQuickBooks, Excel, and email led to disconnected databases and IT delays. Green Rabbitadopted NetSuite ERPand implemented it within three months. Now, they can swiftly ship products across thecountry without inventory errors, manage orders without delays, and easily scale their ordervolume without system impact.

While ERP software was initially designed for enterprises — as the name indicates— today’s cloud-basedsoftware-as-a-service (SaaS) ERPofferings havelowered barriers to entry and helped countless emerging and midsize companies increase theirefficiency, visibility and, in turn, profitability. Although there are costs that come withpurchasing and deploying ERP software, it often delivers a quick return on investment.

Gain Control of Your Business Resources with NetSuite ERP

NetSuite’s Enterprise Resource Planning (ERP)Systemstands out as the perfect choice for companies seeking immediateperformance enhancements and sustained growth. Unlike many traditional systems, NetSuite wasmeticulously designed to be cloud-native, offering unmatched flexibility and scalability.This adaptability empowers companies to seamlessly adjust to shifting conditions and supportevolving business needs. With NetSuite's real-time data and role-specific dashboards,decision-making becomes quicker and more informed across all levels of the organization.It's a game-changer for businesses looking to stay agile and competitive in today's dynamiclandscape.

ERP FAQs

What does ERP stand for?

ERP stands for enterprise resource planning, a term research firm Gartner coined in 1990 torefer to the business management platforms enterprises had begun using.

What is ERP in simple terms?

ERP is software that businesses rely on to run and monitor the business performance of theirdaily operations. It stores data from across the company, from finance to supply chain tohuman resources, in a central repository and can analyze and report on all that information.

How does ERP work?

An ERP is an application that makes use of a central database that receives information fromvarious departments within a company. The ERP includes integrated modules dedicated tofunctions like accounting, inventory management and CRM. An ERP gives companies a singleplace to store, view, manage and interpret data.

What is an ERP system?

ERP systems are comprised of modules that focus on certain business processes, such asaccounting, manufacturing and CRM. These modules function using a central database, allowingaccess to real-time data, and give visibility into business performance across thesedepartments while minimizing data duplication. A complete ERP system will help companiesbudget, plan, and report on financial results.

Why is ERP used?

Companies use ERP systems to connect data from multiple business functions within acentralized system, using the same data to maintain a “single source of truth.”This allows different departments to operate with the same results. Companies also save timeand money by automating manual processes and reducing opportunities for errors.

Is ERP just for finance and accounting?

While financial management and accounting are key ERP functions, the system’scapabilities stretch far beyond this department. It can automate and better manage tasksrelated to purchasing, inventory and order management, manufacturing, project management,workforce management, sales and marketing and more.

Why do companies use ERP?

ERP software has become an invaluable tool for companies because it generates major time andcost savings. Beyond automating tasks, an ERP provides company-wide visibility and reportingthat tells executives and managers where teams should focus their time and attention, whichmay mean addressing pressing problems.

What’s the difference between ERP and MRP?

An MRP, or material resources planning, system was a precursor to ERP used by manufacturersto better prepare for production runs. The manufacturing-related tasks MRP systems handled,like procurement and inventory tracking, are just one component of today’s ERPsystems.

What is two-tier ERP?

Two-tier ERP is an approach that has gained traction among larger companies withsubsidiaries, distinct business units or regional offices. Instead of forcing these businessunits or offices to use the legacy ERP, they run on a less-resource-intensive ERP —often a SaaS solution — that’s integrated with the Tier 1 system.

What are the advantages of cloud-based ERP?

Many of the advantages of cloud ERP fall under lower costs and fewer headaches. A cloudsolution is usually cheaper and faster to implement, and post-implementation expenses may belower because the vendor takes care of all maintenance and upgrades. A cloud-based systemcan also seamlessly support your growth, as the vendor manages all hardware.