What is ERP and why is it so important?


Evolving your approach to ERP is a vital step towards achieving a wider digital transformation. Businesses are looking for new ways to become more responsive to the evolving customer demands while connecting distributed teams and enhancing critical processes. Operational and process efficiency improvements enable effective digital transformation and can be driven by the adoption of a modern business management platform for ERP.

While there is no one-size-fits-all solution, ERP technology is getting better and better at bringing processes together. Read on to learn more about ERP and the benefits to your business.

What is ERP? 

ERP is an acronym that stands for Enterprise Resource Planning. It is business management system that enables you to run and oversee your entire business processes from one place. It typically integrates finance, HR, supply chain, manufacturing, operations and commerce.


What is an ERP system? 

Business leaders and managers some times refer to the ERP as the central nervous system of their business operations. An ERP allows them to gain intelligence, in the form of accurate data that illustrates how the business is performing. 

An ERP solution also gives a business the potential to automate certain processes within a business, and some interactions across different departments.

An example of an ERP in use:

  • The finance department of a business requires an ERP system to close the books.
  • The sales department of the business could use the ERP system to store and manage all sales information.
  • The logistics department would use ERP software to deliver the right products to the right customers.

Why is ERP so important? 

An ERP system is a business management tool that takes all vital departments, business data and processes and brings them into one place. Above all, it makes it easier to plan and orchestrate business operations.

Now, I know that sounds like a mouthful, however, you can better understand what an ERP solution is by thinking about the following scenario:

If you had to write down all the different processes that go into the running of a successful business on blank sheets of paper, how many would you have in total? A lot of paper, right? You probably would end up having too many pages to carry and heading to buy a binder keep all those papers in one place.

That’s exactly what ERP software does for businesses. It acts as a binder for all the different processes that go into the business and puts them all in one place. This helps the business operate in a more efficient way.

One way an ERP system could be used could be to combine a company’s financials, manufacturing, HR, operations and supply chain into one centralised system. This ultimately helps them make their day-to-day operations as streamlined as possible.

Most out-of-the-box software on the market right now is fairly basic. Typically, it doesn’t consider the fact that a business’s needs change into consideration, especially as they expand. Your systems should be able to keep up with your growth. And so, off the shelf solutions will need some configuration by a specialist to meet your needs. 


Not sure where to start when it comes to ERP and digital transformation?
Read our blog 7 steps to adopting an effective ERP solution.

How does an ERP solution help your business?

As your business grows, you will have increasing amounts or data, workflows and processes to manage. For your business to succeed in the long run, you’ll need to ensure you have a reliable way to manage processes, supply chains, resources and more in an organised manner.

Staying organised will undoubtably help your employees be more productive, waste less resources and ultimately help you become more profitable.

Here are just a few ways that your business could use an ERP tool to increase efficiency and organisation within your business.

1. An ERP system provides you with accurate data and business insights

How do you gain and maintain visibility over how much cash, raw materials, debt and production capacity your business has? These resources are essential for every business, so you should always be aware of how much of them you have. A centralised system will enable you to gain this visibility with a complete view across sales, sourcing, distribution, and other planning functions.

2. It can help you and your employees manage their time better

If you had to put a number on the amount of your time the employees of your company spend doing repetitive tasks like counting inventory and populating spreadsheets for a year, how many hours would you have?

100 hours? 1000 hours? More?

It’s important that number is not too high, because time is a precious resource. A cloud-enabled ERP solution can help you and your team automate a lot of these repetitive tasks. This will allow your entire team to have more free time to focus on the more important aspects of your business that support your goal as an organisation.

3. ERP systems can also be used to help you examine your customer behaviour

Nowadays, you can use customised EPR software to track the behaviours and buying tendencies of your existing customers. This will enable you to easily see what’s working in your business and what’s not.

This will dramatically reduce the risks of your business making unprofitable decisions. It will also give you data insights that could help you see what is effective and working well in your business.


The business value of ERP

The main value of implementing an ERP solution is broadly that it enables all employees to do their jobs better.

But more specifically, an ERP system can:

  • Automate the primary business operations.
  • Improve the financial compliance within a business and help reduce risk.
  • Help organisations eliminate waste at every stage of production.
  • Enable your business to improve on its level of customer service.

How do you know it’s time to upgrade your system?

  • You’re spending to much time on your existing system

The needs of a start-up vs a large business are not the same. What once worked for your business 5 years ago, will likely not suffice in present day. In a growing business, it’s important that your systems grow with you.

If you’re still utilising entry-level business applications in a mature business, your approach to ERP will be ineffective. A modern ERP solution will provide greater capacity and capabilities to support planning and process management.

  • Your existing processes are inefficient

If you’re struggling with disparate data sources, information silos and an overload of spreadsheets, you’re not alone. A lack of integration between systems and processes can spiral into larger organisation-wide inefficiencies.

A new ERP solution can provide you with a single, central workspace that connects your functions and streamlines process management.

  • You’re spending too much on ERP system maintenance and issues

If you’re ERP solution is becoming less of an asset and more of a liability, it’s vital to rethink your set up. Paying for expensive integrations, maintaining, licenses, training and more can add up – especially for an ineffective system.

Migrating to a unified ERP system such as Dynamics 365 can help you save costs and improve integration. A trusted IT partner can also take the hassle out of licensing, upgrades and maintenance.

  • You aren’t meeting customer demands

In the changing working world where expectations are higher than ever, it’s important to stay agile. If you are struggling to keep up with the increasing mobility of both customers and staff, it’s time to invest in an ERP system that meets these needs. Otherwise, you could just lose them.

Top tip
If there is resistance to ERP change, one of the ways you can combat this is through requesting a demo from your IT partner. This allows everyone to see the choices and capabilities available. Plus, when everyone feels included in decision making processes, it makes adoption far easier.

Discover what Dynamics 365 can do for you

Dynamics 365 is a modern business application that runs in the cloud. It brings the best of what enterprise resource planning has to offer. This includes a modular, centralised system that unifies all your data and connects your processes. Dynamics 365 helps you access real-time insights that empower your to enhance efficiency and respond to change. 848 is a Microsoft Gold Partner with a team of certified experts specialising in the design and build of Microsoft business applications.