What is ERP

What is ERP (Enterprise Resource Planning)? [2020 Update]

What does ERP mean? You may have heard this word before. But have you ever asked yourself what ERP can do or what the advantages that ERP can bring to your business are? Through this article, we hope you can get a deeper understanding of how ERP solutions can transform your business. Here’s a brief introduction to ERP, and why it seems like everyone’s talking about it.

What is ERP?

1. Definition

  • ERP stands for Enterprise Resources Planning. In general, it is a process used by companies to manage and integrate critical parts of their businesses.
  • Many ERP software applications are essential to organizations and allow them to improve their resource planning. Moreover, it combines all the processes required to effectively and efficiently run the company within a centralized system.
  • These ERP software systems can integrate multiple functions within an organization such as planning, inventory purchase, sales, marketing, finance, human resources, etc., into one single space.

2. ERP fundamentals

The fundamental of ERP systems

ERP systems are built around a single data structure. Thus, business processes are interlinked around this structure to foster workflows between business divisions. It also helps ensure the information used throughout the enterprise is transmitted seamlessly. In other words, ERP is the vehicle to integrate people and technology in modern business.

Let’s get some more clarification with the example below. Imagine that you wake up and have an idea in your mind about making a product. In this case, you usually sketch that idea on paper. However, Enterprise Resource Planning can help you put together lists of the materials required to create your product. In fact, the ERP system will estimate how much money a unit will need and how to decide on the product’s price. After that, your product is transferred to the factory. Also, ERP allows you to set up your supply chain to put the materials needed to make the product. As a result, the suppliers of materials will then send orders. The scheduling process is also set up for shipping and payment systems by ERP.

3. The Business Value of ERP

With ERP, your business will have considerable advantages in the digital transformation race. Not only in job management, but ERP also makes it easier and more systematic. For that reason, ERP helps your business to achieve the profit the company is aiming for.

  • Real-time detailed updates
  • Optimized business processes and increased productivity through streamlined organization and optimization methods
  • Enhanced customer service by offering relationship tracking and invoicing systems
  • Improved work efficiency through general user experience across a wide range of clearly defined business functions and business processes
  • Reduced costs and risks in management and operations through unified and integrated systems

4. Types of ERP

In particular, Enterprise Resource Planning systems are usually divided into different modules. The following modules represent a specific department within the company and link it through a central database. Consequently, it is possible to efficiently and promptly manage a company’s business processes between departments.

The difficulties that businesses are struggling with

  • E-commerce
  • Procurement
  • Logistics
  • Warehouse and inventory management
  • Accounting and financial management
  • Supply chain management
Businesses face the significant obstacles of management

1. Many software are available for different processes

Many business processes have become outdated and stagnant for a long time. Besides, they have multiple fragmented systems run simultaneously. That could be quite confusing and a waste of time in the long run. Especially, if it could create a more convenient and refreshing workflow for everyone, there’s no reason to be afraid of change. The switch to ERP allows companies to track everything from anywhere, anytime.

2. Redundant data

The more companies grow, the large customer has. That results in a lot of metrics that need to be processed. Redundant or duplicated data can happen to employees of the same company. Therefore, the business will slow down and confuse between departments.

3. Lack of knowledge and communication about the company

One of the most significant benefits of an Enterprise Resource Planning system is that it allows information sharing on a large scale. When a larger business doesn’t have an ERP system, there is too much information that employees can’t entirely comprehend. Therefore, information flow sealing, making the machine cumbersome, and not working smoothly. Spending a lot of time transferring work between departments leads to reduced efficiency.

4. Not meeting customer expectations

In business, your most important priority will always be your customers. It’s essential to make sure that you keep your customers in mind with every change. When your business grows, it means that the number of customers increases. The number of transactions such as revenue, expenditure, debt, inventory data, and even shipping information becomes overwhelming. That leads to a slower response to customer demand, facing customer dissatisfaction. Fortunately, that’s a big problem for companies that don’t have sound management systems having to deal with.

5. Trouble for IT

If you are a business leveraging multiple systems for all of your processes, and all of which must be managed by your IT department. There is a very high chance of errors and time-consuming work. In addition, consistent tweaks, numerous unnecessary custom integrations, and upgrades can be a few of the most significant downsides of having multiple systems.

How Does ERP Help Improve Business Operations

Enterprise Resource Planning is a great multifunctional tool. It can enhance your entire business. From the top floor to the company floor, ERP connects every perspective of your business. Besides, improving your operation to run smoother and engaging your businesses more productive.

ERP helps to improve business operations significantly

1. Communication and Business Intelligence

Analyzing your business data is not an easy job. You can organize your company’s information flows because of a sound ERP system. You will be able to use a variety of analytical tools to make informed business decisions and stay competitive in your industry. Communication between departments can also be improved when different teams no longer work on separate systems.

2. Supply Chain and Warehouse Co-ordination

The ERP platform oversees your entire supply chain that makes the business run smoothly and keeps up to date with inventory issues. That will help your company respond to customer needs optimally. At the same time, you are making it possible to negotiate future projects and business development.

Effective supply chain management will facilitate the improvement of warehouse processes. Moreover, an ERP system will have functions that support your warehouse operations, such as batch and serial number tracking, warehouse management,…

3. Supplier and Partnership

When your company and your business interests grow, your supply chain and partnerships can become more complex. The ERP system will enhance easy access to documents such as contracts and approval data,… That improves business operations. Besides, supplier information will also assist with production planning and inventory management.

4. Human Resources

In fact, a human resource management tool in your primary business system. All aspects of human resource management can streamline to improve business operations. Therefore, it will help automate and handle the data and storage challenges for your HR department.

We can take a look at some of the success stories below when they apply ERP to their business:

  • Saddleback Leather company increases Sales and saves $1 million+ with Acumatica. Besides, 33 percent lower cost than NetSuite with 10 times the functionality and $750,000 savings in IT costs.
  • FedEx has significantly cut manual effort and increased the speed of code deployments. They use Oracle Cloud’s digital transformation and platform capabilities. As a result, they have a 2X faster speed to market.
  • Custom Profile company using IQMS ERP saved time and prevented errors with simple connections in packing slips to invoices. Improved inventory control and tracking with engineering change order flexibility. Therefore, increased an on-time delivery rate of 99.99+ percent and zero shipping errors.

TOP ERP Solution Brands

More businesses nowadays are looking for a solution to standardize their most essential business processes. They want to improve efficiency and return-on-investment (ROI). That why ERP software is becoming a suitable solution for companies of all sizes. We took considerable time to provide this Top modern ERP Software Companies and its flagship ERP tools.

  • Microsoft Dynamics ERP
  • SAP Business One
  • Oracle ERP
  • NetSuite OneWorld
  • Acumatica Financial Management software
  • Epicor ERP
  • SyteLine
  • Sage Business Cloud X3

Integrate ERP

The ERP integration of legacy systems

You are probably wondering why we mention this section. Nowadays, integration is an important concept related to any ERP system. Some companies may have legacy systems that they want to continue using them. As a result, they want to use a particular structure because it is the best of their needs. It is the job of ERP to interact and connect with these other systems. Therefore, integration becomes a tool that helps us to communicate with that.

One struggle companies have had to integrate their ERP system with their other enterprise systems. They want to meet growing business demands. But ERP implementations commonly span a few years. That starts as a few functional modules often develop into a primary ERP system with several stand-alone applications. Enterprises need to find a new way to implement ERP systems. Besides, allow them to integrate isolated applications and provide a united application architecture.

So the question is: How to find out the solutions for this problem?. Our company, Beehexa, provides an Hexasync integrated ERP solution and custom modules in ERP. If you are interested in this topic, we will talk more in-depth about Integrating ERP with Hexasync in another article.


At this point, you must have had a partial overview of the word ERP. In short, ERP is not just a tool but a universal key. That helps your company could find the best way to manage your business. We highly recommend an ERP solution, which is Acumatica. This software is kept up-to-date with the latest features, functions. With access to these new technologies, you can quickly improve their business best practices. Your business can automate processes that used to require massive manual intervention. That enables them to make better decisions faster and more efficiently.

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