What is ERP?

ERP is an acronym for Enterprise Resource Planning. It allows businesses to understand and plan how resources are used across their entire enterprise in a single software solution, rather than being restricted to a specific department. It enables businesses to simplify their operations by bringing multiple systems into one place.

The origins of ERP date back to the 1960s but its scope has expanded significantly over the last two decades. After initially being a system that provided an inventory management and control solution to the manufacturing sector, the scope of ERP has changed. It now allows any business to manage its accounts, sales and human resources in one system. The result of this rapid evolution is a software solution that offers a vast array of choice to consumers.

This has meant that ERP software is no longer restricted to use by large enterprises, with smaller businesses also increasingly recognising the value to their own productivity. An ERP solution offers a wealth of advantages to its users, which serves to increase business efficiency. These are encapsulated in three broad categories:

Avoid unnecessary errors

ERP automates business processes to reduce the amount of time employees spend entering data into the system themselves. Rather than spending two days manually inputting bank statements into the accounts system, for example, an ERP solution inserts the data automatically. This reduces the likelihood of human errors and also enables a business to reallocate resources away from redundant tasks.

Improve business understanding

By bringing together disparate systems that operate across a business, it becomes possible to analyse performance from within one solution. It breaks down barriers between departments and naturally improves transparency.

Make better decisions

The correct ERP vendor provides customised reports and performance analysis. Businesses are therefore able to decide how they view information in their system, rather than having the format dictated to them by their supplier. By having a personalised overview of the entire business in one place, the management team is able to make better decisions based on a real-time assessment of the vital data.

These benefits demonstrate the significant potential to transform the way any business works, regardless of its size or industry. Rapid growth of the ERP market in recent years is a testament to the fact that this has already been achieved.