What is an ERP System?
ERP  which stands for Enterprise Resource Planning  can be an immensely powerful business tool, if you understand how to use it correctly. Enabling you to streamline business-critical processes and information flows across your entire organisation, an ERP system can help your business keep pace with the relentless speed of modern enterprise. Find out more about the characteristics of ERP systems with our helpful guide and see whether it could be a good fit for your business. Essentially, an ERP system is a type of software that is used to manage and integrate important, day-to-day business activities. This covers a broad range of areas, including project management, supply chain management, procurement, and so on. In a nutshell, ERP systems tie together numerous business processes to create a single, fluid system and enable the flow of data. There are several different types of ERP system, each of which has their own unique benefits:  Cloud ERP (also known as SaaS ERP) - an ERP system hosted on cloud-based software  On-premise ERP - an ERP solution that runs in your own data centre  Hybrid ERP - a solution that allows you to run some applications on-premise and some applications on the cloud  Characteristics of ERP systems  ERP systems integrate all the systems that are essential for running the business. From order management and accounting to human resources and customer relationship management (CRM), you can use an ERP system to streamline these processes and information flows, creating a shared database that everybody in the organisation has access to. Without an ERP system, this data is siloed by each department and can be difficult to access. This reduces the efficiency of your business, hinders information flow, and provides a significant barrier to collaboration and communication. Its also important to note that ERP systems allow for an improved level of automation, reducing your businesss reliance on time-consuming manual processes. For example, you could automatically reimburse employees who havent taken all their PTO by the end of the year by integrating HR with your accounting processes. Alternatively, you could set up accounting within your ERP system to send invoices automatically by pulling data from customer history. Advantages of Enterprise Resource Planning (ERP) systems  There are a number of benefits associated with ERP systems. One of the key advantages of Enterprise Resource Planning (ERP) systems is the fact that it can provide you with real-time information, which enables companies to proactively address issues before they become significant. Plus, an ERP system can offer enhanced customer service by providing a single source for tracking billing and relationships. In addition, the improved automation provided by ERP systems can help you to streamline your business model and cut down on unnecessary manual processes. This automation can make it easier to achieve financial compliance with local regulatory standards, reducing the amount of risk that your business is exposed to. While all businesses are likely to benefit from an ERP system in some capacity, there are certain conditions that may make an ERP system particularly beneficial for your organisation. Youve got too many disparate systems  When your business was growing, you may have developed different systems for each department, each with multiple data sets. However, problems can arise when these disparate systems stop working together effectively. Youre unable to answer basic business questions  After a certain point, you may struggle to answer basic questions about your business because you dont have visibility into siloed data and systems. If you cant answer questions like what was the overall number of returns last quarter? or what was our order cycle time from every distribution centre? then it may be time to consider an ERP system. Youre spending longer on daily activities  You may find that as time goes on, youre spending increasing amounts of time on key activities, such as closing your accounting books. By integrating solutions and data within one system, you can complete these basic tasks much more efficiently. We can help  GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.