Understand ERP

What is ERP?

ERP stands for Enterprise Resource Planning.

Enterprise Resource Planning systems collect data and financial information from various areas within an organisation, then stores that data centrally on a computer. ERP systems are typically made up of different modules depending on the type of organisation and its requirements. For example, a firm of lawyers don’t need a stock control system as naturally they don’t carry any stock, but will need to know how much time is being spent on every case that they are dealing with.

ERP systems can integrate the processes between a sales department, accounting department, manufacturing, logistics and stock. As a result, sales management will know what has been sold, know that an invoice can be generated for each sale and the items sold can be checked to see whether it is in stock. This therefore unifies the organisation by enabling various departments to see what is critical to their department but not necessarily within their control.

Enterprise Resource Planning sounds like a solution for large companies, yet ERP as it’s more commonly known, is effective business software that helps both big and small companies alike. Vendors like SAP and Epicor tend to tailor for big / Mid-Sized organisations; Motorola provides industrial based CRM / ERP Solutions whilst Mamut and Sage cater for SMEs.

ERP for Small Companies

Small businesses face many of the same challenges as large organisations, albeit on a smaller scale. These include customer management, inventory and logistics, cash flow and visibility over key financial metrics.

However, ERP typically has been viewed as a system to be used for much larger organisations, potentially with hundreds or even thousands of employees or users. This has occurred because traditionally the cost to purchase, deploy and support ERP systems was expensive and therefore exclusive to an elite few. Furthermore, ERP systems were not only complex and expensive, but contained many features and functions that were not of any value to many smaller companies. Many vendors attempted to address this by scaling down their systems to meet the needs of the SME but this resulted in a solution that was compromised.

There are now a number of systems developed purely for the SME and SMB customers, and priced accordingly. Many small and mid-sized businesses are now realising the benefits of dedicated ERP systems for the SME market, such as improved control over the business, increased efficiency and profitability.

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