What is an ERP system?

Find Out The Basics About Enterprise Systems

It’s crazy to think that ERP systems are almost 70 years old. Although the initial Enterprise Resource Planning (ERP) systems are unrecognisable to the ones currently on the market, the concept remains the same today: a single solution to integrate and manage key business processes.

Despite being the same age as an pensioner, ERP systems show no signs of slowing down. Modern systems are filled to the brim with functionality to help small businesses to manage, monitor and automate their key daily activities. The market leading ERP solutions include different features to manage everything from finance and sales through to warehousing and production. You’ll also find in there tools for HR and CRM.

what is an ERP system

There’s lots of ERP solutions aimed at different types of organisations. Typically, these applications fall into one of three categories. Tier 1 solutions are aimed at big global organisations with ten-figure revenues. 

Tier 2 solutions are usually less complex to deploy and nowhere near as expensive. They are ideal for growing companies or those who may have multiple locations. These end-to-end solutions usually include a whole host of features to help grow organisations in one application.

Then, there are entry level Tier 3 solutions. These basic solutions - which aren't really ERP applications - help companies manage basic tasks like finances or sales. However, start-ups quickly out-grow these tools. And they often result in organisations becoming frustrated with software that slow down their productivity. 

Who Uses ERP Systems?

The beauty of an end-to-end solution is that it can be used by any type of organisation in any type of industry. These solutions have all the tools needed to run every aspect of an SME as standard. Although there’s no definitive figure on the number of organisations who use an ERP system, it’s fair to say that every successful company has some sort of enterprise system managing and automating tasks.

One of the biggest misconceptions around ERP is pricing. ERP solutions are designed, developed and prices for all types of organisations. Although a Tier 1 solution may be out of price for a growing business, systems for 2 users up to 10,000 are available from Seidor. Whatever your size of business and requirements, we’ll help find the perfect ERP system for your business. You can also get a breakdown of how much it costs to deploy an ERP system here.

With ERP everything is easy. You can manage your finances and accounts and link these with your warehouse or production activities. Not only does ERP simplify the way an organisation works by integrating all key tools into one solution, but it also provides access to real-time data that users can access at any time and trust to make the right decisions. 

How do ERP Systems work?

You’d think that by integrating various features to manage different tasks that ERP systems would be quite complex. Yet, that couldn’t be further from the truth. These user-friendly systems typically store data in a centralised database. Data is then managed within the solution by different modules and provides real-time updates on activities and performance. Core activities are automated to improve productivity levels and important managerial reports are streamline and generated almost instantly. You no longer need different applications to manage your finances, monitor and track your inventory or plan your production processes. Like any piece of software, users are given comprehensive training before the system is ‘live’ with real-time data.

With critical functions managed from a single application, SMEs can make quick productivity and efficiency gains. These will also lead to a boost in profits and cost savings across an organisation. In fact, there are many ways in which ERP systems help organisations to save money. Firstly, because these systems are typically end-to-end, this helps SMEs to reduce the amount of applications they require to complete daily tasks. There have been some companies reduce their annual IT budget by nearly £100k just by stripping out all their disparate solutions in favour of a solution such as SAP Business One or SAP Business ByDesign. 

How Can ERP help a business?

ERP solutions are proven to help make SMEs make significant savings by improving stock management and eliminating unnecessary inventory spending by accurately forecasting demand. SMEs can also avoid purchasing surplus stock by gaining better control over their supply chain.

By streamlining processes and ensuring you can meet customer demand, you’ll also increase satisfaction levels within your client base and improving the chances or repeat or return business. An ERP solution is the cornerstone of every successful business. It’s also no coincidence that organisations who manage to accommodate growth do so with an integrated solution. 

Running a growing business can be tricky. It’s difficult trying to juggle all those different plates at the same time. And with so much going on at one time, it’s often difficult to allocate time and focus on tasks that matter. That’s where ERP solutions help out. 

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Ultimate Guide To ERP 2021

Ultimate Guide To ERP

Business Management systems help organisations take back control. Tasks are simplified; core processes can be completed automatically; and you can get to grips with what’s really going on across your business.

Because there’s only one database that holds information, there’s a single source or truth across your business. There’s no extracting data from multiple systems to run reports; no more silos of data; no more extracting reports from one system and uploading them into another. Everything that happens in your organisation is tracked and can be monitored to make better, more strategic decisions.  

One of the biggest impacts an ERP solution has on an organisation is on productivity. Users love solutions like SAP Business One because it helps them to get more done with less effort. The systematic nature of ERP means there no longer a requirement to spend hours importing data into one system.

Organisations can finally maximise resources and improve outcomes without increasing overheads. It’s only by improving levels of productivity that your organisation can grow and reach it’s potential.

Just as an ERP solution helps a company become more productive it also helps it be more efficient. What’s the different between productivity and efficiency? Think of it like this. Productivity = quantity. Efficiency = quality.

ERP is guaranteed to drive levels of efficiency across small businesses. Because you’re not constantly juggling those plates with an ERP system, you can focus on driving levels of quality across your organisation. 

Why is ERP so expensive

The size of your company and the number of users will ultimately define the overall cost of your project. ERP doesn’t automatically equal expense. Each user will require a license to access your solution. However, you’ll also have to factor in consultancy days for blueprinting, configuration and training. These can often match or exceed the cost of your licenses but are essential in ensuring your project is a long-term success. Also, if you select a solution with a detailed roadmap, like SAP Business One, it’s likely to be the only solution your business will ever need. When you calculate the cost of a project and then break it down over a five, 10 or even 20-year period, these projects are actually really attractive when you consider what you’ll get in return. Organise a no-obligation quote, based specifically on the requirements of your business, here.

Your next steps

Download our exclusive Ultimate ERP Guide 2021 to find out more about enterprise systems and how these can help growing organisations. Alternatively, if you’d like to speak with an ERP expert today, one of our experienced ERP experts are always on hand to answer any of your questions. Use the buttons below to find out more… 

Find Out More About ERP From Seidor

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