ERP Systems FAQs: What You Need to Know

We’ve heard it all: What is an “ERP”? What does it do? And does my business even need one? We’re here to answer all your questions and more.

What does ERP stand for and what is an ERP solution?

Enterprise resource planning software, or ERP, is the type of software that companies use to help run their business – from sales, accounting, and project management through supply chain management, compliance, and everything in between. It centralizes data from various departments and areas of a business into a comprehensive software solution. Oftentimes, you will hear people refer to this type of software as a business management system.

Why is ERP important and what are the key benefits?  

An enterprise resource planning (ERP) software system fosters real-time data visibility and accuracy across multiple business departments from a single centralized source of truth. By integrating end-to-end business information that works together, cross-departmental collaboration and data sharing are simplified, and in many cases, automated. This reduces redundant manual data entry and the resulting human errors, faster business cycles, technology cost savings, and greater productivity for each user.

Some of the specific benefits include more efficient supply chain and inventory management, simplified financial and accounting processes, more accurate and reliable data, visibility into business performance, and insights to drive smarter decision-making. Enterprise resource planning solutions designed for specific industries automate best practices into business operations, streamline processes, and improve operational efficiency and business performance. ERP solutions reduce the amount of manual work required, making each user more efficient and productive.

There are many more benefits to ERPs than can fit here, but if you aren’t sure where to start, be sure to check out our recent eBook: The Ultimate Guide to Business Management Software

What types of businesses use ERP software?

Enterprise resource planning (ERP) software is used by large, medium, and small companies in every industry. Some industries that get the most out of an ERP solution include manufacturing, distribution, professional services, construction, industrial services, healthcare, automotive parts, and transport and logistics, just to name a few. At the end of the day, any business that can benefit from improved business efficiency, streamlined processes, and reduced margin of error turns to ERP systems to help run their businesses.

How do I know which ERP solution is right for my business?

There are many ERP solutions on the market that can make it difficult to find the best option for your business. To start, make sure you are considering a solution that delivers:

• Centralization – Bring all departments and business areas together to ensure data is consistent and processes are streamlined
• Modern Technology – Your industry is changing constantly so make sure that the technology you are running your business on is evolving with it
• Industry Expertise – One-size does not fit all. The challenges in your industry are unique so your software solution should be aware of how you need to manage them
• Training and Support – Make sure the vendor you commit to will support your team well after implementation to ensure that you will get the most out of the software solution
• Flexibility – As things change and your business grows, your software needs to be able to adjust with you, not hold you back

Identifying or replacing a new software solution is a serious commitment so you will want to make sure that you are looking for the right things in a new business management solution.

What are the benefits of a cloud-based ERP solution?

The cloud-based infrastructure has made ERP– once only financially accessible to larger enterprises – affordable to midsize and smaller businesses. Cloud-based ERP lowers upfront costs, accelerates implementation time, reduces physical and staff resource usage, eliminates expensive server and hardware costs, and dramatically reduces the IT personnel a company must employ to maintain the systems. The subscription model of cloud-based software enables businesses to pay only for what they need and quickly adapt to changing business needs by scaling up or down.

A cloud-based ERP solution offloads software upgrades, updates, maintenance, and security to the vendor’s IT department, enabling businesses to minimize IT time and investment.

With a cloud-based ERP solution, employees can access the software from PCs, laptops, tablets, and smartphones, which enables mobility. This not only makes cloud-based ERP ideal for businesses with traveling executives and field personnel but also for modern businesses that have adjusted their workforce post-pandemic.

What are the steps to successful ERP implementation?

Success in using an ERP solution often results from a successful implementation, which includes all the processes up through the “go-live” date. These processes include, but are not limited to:

1. Mapping business interactions with software
2. Evaluating and selecting a solution
3. Creating a budget and schedule
4. Identifying a change management team
5. Creating a structure of internal stakeholders and accountability
6. Cleaning and converting data
7. Installing the software
8. Training users
9. Testing and validating the system
10. Reporting on implementation progress to avoid scope creep.

Why do ERP projects fail?   

According to Gartner, 55-75% of ERP projects either fail or don't meet their intended objectives. Some of the culprits for failure include inexperienced vendor support teams, budget overruns, longer-than-anticipated timelines, or changes in technology capabilities. It is important to understand the obstacles of an ERP implementation and be ready to address them.

I am happy with my current business software system. Why should I change?  

Many companies that implement a new ERP solution report better software configuration and integration. The automatic implementation of industry best practices, cutting-edge features, and support for a growth orientation are all benefactors of a new ERP solution. In fact, 93% of organizations report their ERP initiatives as successful in producing ROI on reducing IT costs, reducing inventory levels, and reducing cycle times.  

What resources do I need to move to an ECI ERP?  

To take advantage of the powerful features of an ECI ERP system, having a clear vision of what your business needs the system to do and defining your process flows is critical. For a successful ERP implementation, adequate resources in the way of budget and dedicated personnel ensure the project can be completed in a timely manner, and that your team receives the training they need to use the software to its full capability.    

To get started and ensure your company is ready for the change, look at our Ultimate Guide to Business Management Software.

Related topic: Learn about ERP Software for Manufacturing - M1