What Must a System Do to Qualify as a True ERP Solution?

What Must a System Do to Qualify as a True ERP Solution?

If you’re a business looking to implement an ERP solution to your workspace then you must have a detailed insight into ERP software. In particular, what these systems are at their core and what they can do for your business. Moreover, what must a system do to qualify as a true ERP solution? 

true erp system

ERP Systems

First things first, you need to understand what an ERP system is. Enterprise Resource Planning Systems, also known as ERP is a type of software used by organizations to better manage their day-to-day operations. ERP helps automate most of your workspace and allows you to centralize your data so you can eliminate manual labor and instead use labor at more mental-intensive processes. 

What Can ERP Systems Do For Your Business?

ERP systems help you manage and integrate the integral processes of your business organization. Consider your company’s planning, sales, marketing, finance, human resource, and supply chain systems.

An ERP system software will help in all of these sectors of your business. As a result, you can better identify your company's waste, eliminate inefficiencies, facilitate seamless communication and collaboration and give more insight into your operations. You can get access to real-time data reflecting your workflows operative in your organization.

Getting easier visibility into every transaction across your enterprise leads to better decisions since it is based on information that is 100% up to date. ERP will essentially allow for connectivity between two or more software applications; it acts as an enterprise application integration middleware.

Now that you have a basic understanding of what ERP software can do for your business, let’s delve deeper into the construction of an ERP system. Specifically, what is at its core? 

true erp system

What is the Heart of an ERP System MCQ?

At the core of an ERP system is its central database. Just as a heart will pump and refresh blood through a body, an ERP system will effectively connect all parts of a company and its core is run by “data” - centralized data. The flow of data that is directed, properly coordinated, and controlled is important for proper insight into your business. 

The primary concern of an ERP solution is to manage and organize data. A common database in ERP systems allows for ease of working on cross-functional projects, ease of sharing ideas across analysis, centralized collaboration, and higher levels of security. 

What Must a System do to Qualify as a True ERP Solution?

If the core of an ERP solution is its central database, then what qualifies as a true ERP solution? Quite simply, it is a solution that is ideal for streamlined data processing. 

The goal of a true ERP software is to properly integrate all your business systems into one singular solution. It should be complete with all the modules and necessary functions included so you can enter data and have your work done for you. 

Another major main characteristic of ERP solutions is that every ERP system is business-oriented for you; for your unique business. It focuses on your operations and features one single database as a master source of all your information. ERP systems are also integral for manufacturing; they are used to identify the resources required for your enterprise operations and help plan out their utilization. There are various types of ERP systems on the market, some of which are configurable to any business type and others that are industry-specific. 

ERP is also considered as an extension of MRP (Manufacturing Resource Planning); a system that also helps centralize, integrate and process information for proper workflow in an organization  across the different stages of resource planning. IT is a major component of such systems and is incorporated into management systems for information analysis and particularly in supply chain management systems.

After all, the manufacturing segment accounts for nearly 25% of the total information technology.

At the same time, ERP systems are considered a large part of process manufacturing in your business, they can assist in both discrete and process manufacturing. Process manufacturing is quite different from discrete manufacturing; discrete manufacturing has pre-made formulas for the manufacturing of distinct items that are identical to the ones created before and will be identical throughout.

Comparatively, process manufacturing helps create formulas to produce an end product. Process manufacturing focuses on converting raw materials into finished products. 

true erp system

Which is the Heart of Any ERP System?

This brings us back to our earlier debacle. No matter what sector of business you target, the advantages of an ERP system will be focused on improving data management and reliability. Data is at the core of your operations and by having a centralized data setup your enterprise is ultimately more productive.

Centralized data can lead to more robust data management, more meaningful reporting, and organizing. ERP can be challenging, but the benefits tend to outweigh the risks when proper planning is put to choosing the best ERP and implementing it successfully.

Just to give you an idea of how widely used this cloud-based ERP software exactly is, consider that a growing percentage of small businesses are using ERP systems today

True ERP software will be flexible and allow for modification suited to your business environment, they should also be able to extend beyond your company. Popular enterprise applications should be integrated into your ERP software. 

ERP for E-Commerce

ERP software also forms a huge part of e-commerce management. The primary benefits your e-commerce business can gain from the implementation of ERP business process management features include forecasting, planning, purchasing, material management, inventory management, warehousing, and distribution of products. You can improve your customer service and customer satisfaction via the incorporation of ERP software. 

For better results, businesses utilize ERP alongside CRM (customer relationship management) software to handle customer history and automatically manage individual customers so their interaction with your business is boosted. You can maintain actual times of sale and see solutions that are more effective for your business.  See warehouse locations and get a range of reports of your products' shipments automatically. 

Enterprise Resource Planning Software

Enterprise resource planning software also helps in System Applications and Products (SAP) in the data processing. This helps integrate the core business processes into a unified system. Consider a webstore actively managed by your ERP system; an SAP ERP integration will help data storage and automatic calculations in your system.

A seamless integration like such is what you want with an ERP system. Some may consider SAP e-commerce integrations a bit costly since they demand high maintenance costs. SAP is widely recognized leader in cloud ERP, and can be a good benchmark for comparing with other vendors once you choose to undertake an ERP implementation.

You should do a side-by-side comparison of features and pricing for leading ERP systems. Look at direct comparisons like Oracle vs. SAP or SAP vs. ServiceNow and also do more general research like SAP vs. other ERPs. Seeing the details and doing a true "apples to apples" comparison will ensure that you understand all the factors and choose the best ERP with with features and pricing that suit your company best. 

In short, look for ERP software that can be seamlessly integrated into your business and can truly identify and manage your core database and business operations.