• Generic ERP
  • 05.09.2022

What is Enterprise Resource Planning (ERP)?

Taking informed decisions that make business great again!

Dr. Andreas Maier
Dr. Andreas Maier
05.09.2022
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“ They must realize that even if ERP doesn't manage these functions as well as what they had, the benefit to the organization of having a single system of record outweighs the inconvenience of a less capable system. “

If you're an entrepreneur, then you know that managing a company can be difficult. You may be using some software to help manage parts of your company or sales, but you will likely reach the boundaries of the manageability of data shortly after starting your business. 
It would help if you had a comprehensive ERP solution to get a handle on things. ERP solutions help you better manage every aspect of your business. From accounting and finance to human resources and operations, the right software will ensure you have all the tools for everything "insights" you need at your fingertips.

What is Enterprise Resource Planning (ERP)?

ERP systems are software applications that allow businesses to manage their resources effectively. This includes inventory, accounting, human resources, customer relations, and more. ERP systems are essential for businesses that want to streamline operations and improve efficiency in many ways. 

Some ERP systems are more comprehensive than others. For example, some ERP systems may only offer basic accounting and inventory management features. At the same time, others may offer a much wider range of features, including enterprise asset management, supply chain management, manufacturing, and others. 

You must consider your specific needs and requirements to choose the right ERP system for your business. 

What’s the difference between ERP and financial software?

Businesses use two types of software: ERP Software and Financial Software.

ERP software is more comprehensive than financial software because it manages all aspects of a company’s operations. In contrast, financial software is limited to tracking income, expenses, cash flow, and sometimes invoicing. Additionally, ERP software typically has more features than financial software, such as supply chain management, manufacturing, and customer relationship management. Most of the time, financial software is more affordable than ERP software. However, because it has fewer features, it is also limited and generally doesn't bring extra value to a business by providing insights into the company’s core business aspects.

So, financial software is the way to go if you’re looking for software to track your company’s financials. If you need something more comprehensive that will manage all aspects of your business, then ERP software is the better choice.

The real value of an ERP

The real value of an ERP system lies in its ability to provide insights that can help businesses make better – and more informed decisions. For example, an ERP system can provide information about which products are selling well and which are not. This information can be used to decide inventory levels and production schedules. Additionally, ERP systems can help businesses track their customer orders and identify trends. This information can be used to improve customer service and make marketing decisions.

ERP systems can also help businesses manage their supply chains. By tracking supplier orders and monitoring inventory levels, businesses can avoid stockouts and disruptions in the production process. Additionally, ERP systems can help businesses negotiate better deals with suppliers.

Finally, ERP systems can help businesses track their financial performance. By tracking sales, expenses, and profitability, businesses can better decide where to allocate resources. Additionally, ERP systems can help businesses comply with financial regulations.

Ten reasons to adopt an ERP solution

There are many reasons businesses should consider integrating an ERP system into their operations. ERP systems can help businesses reduce duplication of effort, eliminate data silos, and improve communication and collaboration. In addition, ERP systems can provide businesses with valuable insights into their operations, helping them to identify areas where they can improve efficiency and cut costs.

  1. Reduce duplication of effort: By integrating all the different processes into a single system, ERP systems can help businesses reduce duplication of effort. This can lead to significant efficiency gains, as well as cost savings.
  2. Eliminate data silos: Data silos can lead to inefficiencies and errors. ERP systems can help businesses eliminate data silos by integrating all the different processes into a single system. This can improve communication and collaboration, as well as reduce duplicative effort.
  3. Improve communication and collaboration: ERP systems can improve communication and collaboration by integrating all processes into a single system. This can help businesses reduce duplication of effort, eliminate data silos, and improve communication and collaboration.
  4. Provide valuable insights: ERP systems can provide businesses with valuable insights into their operations. This can help businesses identify areas where they can improve efficiency and cut costs.
  5. Improve efficiency: ERP systems can help businesses improve their efficiency by providing valuable insights into their operations. This can help businesses identify areas where they can improve efficiency and cut costs.
  6. Cut costs: ERP systems can help businesses cut costs by providing valuable insights into their operations. This can help businesses identify areas where they can improve efficiency and cut costs.
  7. Streamline operations: ERP systems can help businesses streamline their operations by integrating all the different processes into a single system. This can lead to significant efficiency gains, as well as cost savings.
  8. Reduce errors: Data silos can lead to errors. ERP systems can help businesses reduce errors by integrating all the different processes into a single system. This can improve communication and collaboration, as well as reduce duplicative effort.
  9. Improve decision-making: ERP systems can improve decision-making by giving businesses valuable insights into their operations. This can help businesses identify areas where they can improve efficiency and cut costs.
  10. Increase competitiveness: ERP systems can help businesses increase their competitiveness by providing valuable insights into their operations. This can help businesses identify areas where they can improve efficiency and cut costs. As a result, businesses implementing ERP systems can improve their operations and reduce costs, giving them a competitive advantage.

6 Steps for selecting the right ERP System

  1. Do your research
    ERP systems are not cheap (at least in most cases), so be sure to do your homework before purchasing. Make sure to research different systems and compare their features to find the one that best suits your needs.
  2. Consider your business size
    Not all ERP systems are created equal. Some are better suited for small businesses, while others are geared toward larger enterprises. Make sure to select a system that can accommodate your business size.
  3. Determine your budget
    ERP systems can be costly, so you'll need to determine how much you will spend on the software. Be sure to consider both the upfront costs and the ongoing maintenance costs.
  4. Evaluate your needs
    Before selecting an ERP system, take some time to evaluate your business needs. Determine which features are most important to you and look for a system that offers those features.
  5. Get demos and quotes
    Once you've narrowed your options, get demos and quotes from different vendors. This will help you compare the costs and features of each system.
  6. Make your decision
    After careful consideration, it's time to make your decision. Be sure to choose a system you're confident will meet your needs and help improve your business operations.

Conclusion on ERP systems

Now that you know the importance of ERP systems and the benefits they can provide to your business, it's time to take action. Be sure to research different systems and compare their features to find the one that best suits your needs. Once you've decided, get demos and quotes from different vendors to make an informed purchase. Implementing an ERP system can be a big investment, but improved efficiency and profitability can pay off.

Do you have questions about ERP systems? Want to get a personalized demo? Contact us today for more information. We would be happy to show you why SIX ERP differs, and you will love our transparent pricing.

About the author
Dr. Andreas Maier

Andreas is a result-oriented CEO who brings nearly 30 years of experience gained in the high-tech industry. His experience ranges up to leading positions in Fortune 100 companies such as rentalcars.com (PCLN) or Intrasoft International, a leading EU based R&D software vendor. He holds a Ph.D. in Neural Networks from the University of Cologne, Germany. 

In the past Andreas has successfully founded and co-founded several startups among others XXL Cloud Inc., eShopLeasing Ltd, and WDS Consulting SA. His expertise is strongly focused on modern headless Commerce and the optimization of processes in IT ecosystems.

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