What is an ERP or Enterprise Resource Planning System ?

What is an ERP or Enterprise Resource Planning System ?

by Joe Shara on 31/07/2019

Updated at 27/01/2023

An Enterprise Resource Planning system commonly known as “ERP”  is an enterprise management software whereby manufacturers manages and integrates important business processes such as human resources, marketing, sales, finance, inventory and purchasing. 

ERP systems are enterprise software majorly used by mid to large companies to help implement the best practices in order to increase their  productivity and efficiency while minimizing errors.

In other words, Think of and ERP system as the glue that joins all the computers in an organization. But why is that important? 

Did you know?

When enterprise resource planning software was introduced into the business, the software was used to manage huge manufacturing companies. Today, the software has been revised to benefit both large, mid-sized and start-up organizations.

The usual scenario

In essence, in a big company, you would have every department being run by a different optimized computer and software, making it hard to share important data needed by others stakes, whether is for analysis, operation or management. 

An ERP system in action 

Now with the popular rise of ERP system, it is easily possible to connect  all devices in a way the information can be centralised and accessible by everyone with requires authority.

An Enterprise Resource Planning software is like the CNS of your organization as it gathers information about the main functions of the business, then process those information and makes them available to the other parts of the organization. It is cost effective and improves your communication channels by making information accessible faster for a more productive use.

Better yet, some custom ERP systems can even connects all the technologies used in your business with the development and integration of APIs, leaving behind incompatibilty software issues that is costly to manage. This entails integrating, stock-control systems, accounts payable, custom databases and order-monitoring systems into one system.

How Does an ERP System Work

Thank god for technology advancement. Today, since computers have become sophisticated, complex and critical in any organizations survival, Enterprise resource planning help companies stay on top of their game and ahead of their competition. ERP systems work by integrating all the business processes into a commonplace from which the entire organization can be run. This type of enterprise software will centralize your information by using the same database throughout the entire business to store data for different departments and various computerized functions.


When to Purchase ERP system

Investing in any new technology or software is always a very important decision. Upgrading your IT system and equipment can drastically help you increase your productivity and profit if you do it at the right time and with the best deal from the right  IT Firm. But how do you know it is the right time for a system upgrade?

A good way to find out is when your productivity decrease or simply when your financial results are down. For example: 

  • Are you experiencing any data access, the management or sharing issues?

  • Are you  observing sluggish time struggles when it comes to extracting or processing information

  • Are you getting errors and inefficiencies  in reconciling your business process

  • Or you are simply looking for better and faster ways to help your teams and employees

All these reasons are a sure signal that your business might benefit from an ERP system because your sales forecasts can simply just not be based on mere guesswork when you require a solid figure that can be provided by an API through the API development process. Also, sometimes, some enterprise software could experience a tough time in managing a huge volume of orders. The following are time-tested indicators of a company that requires an ERP system.

Issue Exemple 1: Difficult in accessing your Company Information

Many companies today still use spreadsheets (Microsoft Excel or similar) to store data. The problem with such tools and software's is that its takes longer for you to get accurate answers such as: how many orders do you make in a month or what are your average monthly, quarterly and yearly sales? 

As a business owner and manager, having difficulties in answering these questions implies that your data compilation, extraction and projection process is weak and you should consider an Enterprise Resource Planning software for your business.

Issue Example 2: Hectic Accounting Process

Another major signal that will for you to consider an ERP system for your business  will come from your accounting department when their processes start taking a lot of time for completion.

Industry that needs an ERP Systems.

In our daily business practices, we realize that it is impossible to manage all the business aspects by our own brains. That is why ERP systems are the heartbeat of most of the business and the following are examples of business industry that have recorded a high yields and increase in their productivity just by incorporating an ERP system. They include:

  • Insurance companies

  • Automotive companies

  • Real Estate companies

  • Retail enterprises

  • Logistic companies

  • Tour and travel companies

  • Media and entertainment companies

  • Health care companies


From the look of things, with an  ERP system, your employees will have an easy access to company data and it  will facilitate communication channels with the client and improve the services rendered to customers. Also, it will enable executives to have a holistic and accurate view of the business. Contact us today to find out how we can help your company. 

If you need any help with your resource management or you need advice what kind of ERP to purchase don't hesitate to contact our web agency. We run the best web agency in Montreal.


Frequently Asked Questions

An enterprise resource planning system is business management software through which manufacturers manage and integrate important business processes such as human resources, marketing, sales, finance, inventory and purchasing.

Generally, ERP systems are enterprise software primarily used by medium and large companies to help them implement best practices to increase productivity and efficiency while minimizing errors.

1- Insurance companies 2- Automotive companies 3- Real estate companies 4- Retail companies 5- Logistics companies 6- Tourism and travel companies 7- Media and entertainment companies 8- Healthcare companies

It is often the hectic accounting process or a difficulty in accessing company information that ERP solves.

Joe Shara

Joe Shara is a in-house journalist and Oshara editor. Tech savvy guy who follows all the latest web & digital developments. Loves cats and complex coding problems.

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