Every growing business reaches a point where spreadsheets eventually become unworkable. Enterprise resource planning (ERP) software fills this need by gathering and organizing crucial company data and assisting businesses in maintaining lean, effective operations even as they grow.
ERP is a technology that is changing the retail industry rapidly, but many business owners are still wondering “What is enterprise resource planning?” and “How can it help my business?”
In this post, we’ll explain what ERP is, how it works, what are the different types of ERP, what it can do for your business, and more.
What Is Enterprise Resource Planning
So, what is enterprise resource planning?
Enterprise resource planning refers to a type of software used by enterprises to manage routine business operations like procurement, supply chain management, risk management, compliance, and accounting.
Enterprise resource planning systems enable the exchange of data between numerous corporate activities and tie them all together. They help avoid duplication of data, minimize human error and ensure data integrity by gathering a company’s shared data from several different systems into a single source of truth.
Types of ERP Systems
Enterprise resource planning software can be classified into four separate categories: box ERPs, industry-specific ERPs, flexible ERPs, and large-scale ERPs.
“ERP in a box” or “Box ERP” systems are enterprise resource planning solutions that can be easily implemented and used for essential company operations but it is not possible to alter or tailor them. These types of ERP systems lack the option for installing add-ons but can be perfect for small businesses as they can save money.
These type of enterprise resource planning systems are tailored to work in a certain industry and frequently have very specific features. One example of an industry-specific ERP is ApparelMagic, a fashion software solution specially designed for businesses in the clothing industry.
Flexible or Intermediate ERPs
These enterprise resource planning systems fall in between box enterprise resource planning systems and large-scale enterprise resource planning systems. They are very versatile and can be adjusted to meet a company’s specific needs, but they can be utilized out of the box as well. Intermediate ERPs are excellent for small and medium-sized companies because they are very cost-effective.
Complex or Large-Scale ERPs
This kind of ERP can assist large businesses in streamlining business operations, gathering relevant data from many functions, and presenting it to those who require it for quick decision-making. It should be noted, though that the implementation of a large-scale ERP system is an undertaking that will impact the entire company and cost a significant amount of money. Complex enterprise resource planning systems necessitate large teams of project managers, consultants, and system integrators in order to be successfully implemented and used.
Types of ERP deployment
Modern enterprise resource planning systems vary in terms of their deployment options as well, including on-premises, in a private or public cloud, or in hybrid scenarios that combine settings. Here are some of the key advantages of each to help you decide which enterprise resource planning deployment strategy is best for your company.
This is a traditional way to deploy software, and it gives you complete control. Typically, the ERP software is set up in your data center at the locations of your choosing. Your personnel is in charge of installing and maintaining the hardware and software.
With the ERP cloud, you can subscribe to a service that delivers the software over the Internet while being hosted in the cloud. Regular upkeep, security, and updates are often handled by the program supplier on your behalf. For a variety of reasons, including lower initial costs, increased scalability and agility, simpler integration, and many others, cloud-based ERPs are currently the most common deployment approach.
The hybrid ERP or two-tier ERP approach is available for businesses that want to combine the two to fit their business needs. With this type of ERP, your enterprise resource planning software and data may be partially in the cloud and partially on-premises.
How Do ERP Systems Work
An enterprise resource planning system is made up of software applications or modules that share a common database. While each of these modules typically focuses on a certain area of business (such as supply chain management, procurement, sales, logistics, accounting, or finance), they work together by sharing the same data to meet the company’s needs. Businesses have the freedom to select the modules they need and add more as they expand.
Enterprise resource planning solutions also accommodate industry-specific requirements, either as a fundamental feature of the system’s functioning or through extensions that complement the suite. As mentioned before, companies have the option to purchase ERP software through a licensing model (on-premise) or a cloud-based subscription model (software as a service).
Benefits of an ERP System
Before implementing an enterprise resource planning system, businesses have the same issue – they handle their business activities using a variety of tools and applications, and synchronizing all of them can be very time-consuming.
Deploying an ERP system in your company has several advantages, many of which come from the system’s capacity to serve as the single source of data for your company. The following are a few of the more significant ones
Improved Organizational Visibility
ERP software gives you total insight into and access to all of the most crucial facets of your business. You can quickly access data from any department to get a real-time status report on staff activity. You can keep an eye on daily inventory levels, check monthly sales, make demand projections, or manage customer interactions, all on the same platform.
By removing internal boundaries, this connection also paves the way for improved team communication and the promotion of a more efficient workflow. Finance, sales, marketing, and all other sectors can observe the actions taken by other departments and better coordinate their own efforts
Enhanced Employee Productivity
Time savings and increased employee productivity are further advantages that enterprise resource planning solutions can offer. This is accomplished by requiring less time and effort to carry out their regular commercial operations.
With an ERP, switching between various business apps is no longer necessary because everything is included within a single system. An ERP can significantly reduce or even eliminate the requirement for labor-intensive manual operations when used appropriately. This way, your staff can concentrate on the things that are most important and generate revenue in this manner.
Employee training and adaptability are also greatly facilitated by enterprise resource planning systems since they only require one piece of software to be learned, as opposed to several platforms and applications. It is also great for a simplified onboarding process.
Having one program instead of several can have an immediate positive impact on your bottom line, even though the upfront cost of an ERP may appear intimidating when compared to other solutions.
Since you will be using a single centralized piece of software as opposed to investing resources in numerous systems that each require a dedicated staff, infrastructure, and support teams, using an ERP can lower your overall license costs as well as IT maintenance costs. Due to the fact that your staff will only need to learn one system rather than numerous different programs, you’ll also save money on training expenses.
Improved Customer Experience
Implementing an ERP system is a way to build workflows, core business processes, and collaborations that contribute to an improved customer experience.
ERP connects different business functions like sales, marketing, customer service, finance, human resources, and manufacturing to manage core business processes. It is an effective approach to linking people, systems, and data, thus helping dissolve business silos.
An effective enterprise resource planning solution streamlines stock and inventory management, accelerating order fulfillment and delivery times and enabling your company to meet client needs. In order to provide a deeper knowledge of consumer behavior and demands, it also gathers customer data that can be readily shared across teams. Finally, an ERP makes customer returns, order modifications, and other customer difficulties simpler by integrating customer service, inventory, sales, and financial activities. This results in fewer frustrated customers and increased trust.
The Bottom Line
We hope this article provided an answer to your question “What is enterprise resource planning?”.
Choosing the appropriate enterprise resource planning system for your business requirements might be challenging given the wide range of enterprise resource planning systems accessible to the apparel sector. However, taking the time to investigate and compare your options will be time well spent.
ApparelMagic is the top business management software choice for enterprise resource planning, product lifecycle management, customer relationship management, inventory management training, accounting, and support.
By utilizing the knowledge accumulated from hundreds of deployments over the years, ApparelMagic has developed a fashion ERP that offers apparel companies quick business benefits. Smart, phased implementations with ApparelMagic cover the whole customer lifetime, ensuring continuity from product development and design through customer care and support.