Everything You Need to Know About ERP Systems.

Written by: Camilla Therese Øino -

Reading time: 3minutes

Learn all you need to know about ERP systems, from the definition of ERP to the benefits and implementation process.



What is ERP?

ERP stands for Enterprise Resource Planning. It is a system that helps organizations manage and integrate various business functions and processes. An ERP system collects, stores, processes, and analyzes data from different departments such as production, inventory management, purchasing, sales, and finance. This provides the organization with a comprehensive overview and better control over its resources and operations.

An ERP system consists of different modules or applications that are linked to various business areas. These modules may include accounting, production management, inventory management, purchasing, sales, and marketing. Through the integration of these modules, the organization can automate processes, share information, and streamline workflow.

ERP systems can be tailored to specific industries or general enough to fit different types of organizations. They can also be customized and configured to meet the organization's specific needs and requirements. Regardless of the industry or organization you belong to, an ERP system can be an invaluable resource for improving efficiency, productivity, and profitability.


How Does ERP Systems Work? 

An ERP system works by collecting data from various departments and processes in the organization. This data is then stored in a centralized database that can be used by all the different modules in the system. This allows the organization to have a common and updated version of information available to all employees.

In terms of workflow, an ERP system can automate and streamline processes. For example, the system can automate the ordering process by generating purchase orders based on inventory levels and forecasts. It can also automate invoicing by generating invoices based on sales orders and pricing information.

An ERP system can also provide the organization with the ability to analyze data and generate reports. This can help management make informed decisions and identify opportunities for improvement.

In short, an ERP system works by integrating and automating business processes, sharing information, and providing a comprehensive overview of the organization's resources and operations.


Benefits of ERP-Systems

There are several benefits to implementing an ERP system in an organization. Firstly, it can help improve productivity by automating manual and time-consuming tasks. This frees up time for employees to focus on more value-added tasks.

An ERP system can also help improve communication and collaboration between departments. By sharing information and having a common database, the organization can reduce duplication of work, improve accuracy, and eliminate misunderstandings.

Another benefit of an ERP system is better reporting and analysis. The system can generate reports and analyses based on real-time data, making it easier for management to monitor performance, identify trends, and make critical decisions.

Additionally, an ERP system can help improve customer service. Through better information sharing and access to customer data, the organization can provide faster and more accurate responses to customers.

Finally, an ERP system can help the organization comply with various laws and regulations. The system can include features that support compliance with accounting standards, privacy regulations, and other industry-specific requirements.


Implementation of ERP Systems

Implementing an ERP system can be a complex process that requires careful planning and preparation. Firstly, the organization must identify its needs and objectives, and then choose a suitable ERP system that fits these requirements.

After selecting the system, the organization must customize and configure it according to its specific needs. This may include customization of interfaces, module setup, and workflow definition.

Implementing an ERP system also requires training of employees. It is important that everyone who will use the system becomes familiar with its features and how to use it in their daily workflow.

Another important part of implementation is data conversion and migration. The organization must ensure that all relevant data is transferred from the old system to the new ERP system without loss or errors.

After implementation, it is important to continuously monitor and maintain the ERP system. This includes updating the system, addressing any issues, and adapting it to changes in the organization's needs and industry requirements.


Trends Within ERP

ERP systems are continuously evolving in line with technological advancements and changes in business needs. Some of the latest trends in ERP include cloud-based ERP systems and mobility.

Cloud-based ERP systems allow organizations to use the ERP system over the internet. This eliminates the need to purchase and maintain expensive servers and infrastructure. It also provides greater flexibility and scalability, as the organization can easily scale the system as needed.

Mobility is another important trend in ERP. With the rise of mobile devices such as smartphones and tablets, organizations want to be able to use the ERP system regardless of time and location. Mobility allows employees to access the system and perform tasks while on the go, which can improve efficiency and flexibility.

Other trends in ERP include artificial intelligence and machine learning, which can help automate and improve decision-making processes, as well as analyze large amounts of data to identify trends and patterns.

It is important for organizations to stay up to date with the latest trends in ERP to take advantage of the latest features and improvements that the systems offer.