Otherwise known as “Enterprise Resource Planning”, ERPs are a type of software that allows businesses to create a more streamlined system for all daily activities involved in regular operation. From accounting to product management, some ERPs are rather simple in nature. Others, however, are much more complex, offering large organizations the ability to manage things like risk management and supply chains. The goal of any ERP is, however, to allow businesses to better plan their performance, offering both predictions and results so that organizations have the data they need to grow, scale, and continue to operate responsibly and profitably.

The main reason an organization chooses to use an ERP is that it places a variety of complex information and data in one place, often receiving inputs from multiple sources used within a company. Not only do ERPs make daily operations smoother, but they also help to ensure that data isn’t duplicated or misinterpreted.

How do ERP systems actually work?

ERP systems have become such an important part of many organizations’ operations because they dramatically improve efficiency. Not only is there one singular source of information (the ERP), but the singular data produced allows companies to make more intelligent decisions, especially regarding finite resources. Because of the data collected and integrated into an ERP, businesses are able to increase growth without risking damage to products or services provided.

While ERPs vary in what they offer organizations, the majority have the following in common:

1. A singular integrated system with one common database
2. Real-time operation data and figures
3. Support for all applications and systems used by an organization
4. Cohesive user interface across all applications

Depending on the specific ERP system, you’ll find that the service is either offered on-premise, hosted via cloud, or through SaaS deployment.

Why do businesses value ERPs?

So many organizations continue to rely on ERPs because they provide a cohesive, often indispensable, look at the inner-workings of a business. Streamlining how different departments communicate and work together, ERPs allow for more efficiency, better workflows, and an overall more reliable source for data and information. When used properly, ERPs can dramatically reduce the costs a business accrues — and without damaging products, services, or reputations.

Below are five specific reasons why businesses continue to rely on ERPs again and again…

1. ERPs give organizations real-time information, which means they can better foresee issues, as well as make smart adjustments based on reports generated.
2. ERPs often reduce the cost of operation for all businesses because they make organizations more efficient and allow them to focus on specific tasks that are of the most value.
3. ERPs improve a company’s ability to collaborate by putting everything in one reliable place.
4. ERPs create more efficiency within an organization because of their ability to streamline day-to-day operations and processes.
5. ERPs develop consistency within an organization’s infrastructure because they use one common interface across departments and platforms.