What is an ERP system? And why do you need one?

ERP is an abbreviation for Enterprise Resource Planning, which can be directly translated to enterprise resource planning. A more feasible translation, on the other hand, is usually business software. But what does ERP really mean? In this article we will take a closer look at what an ERP system is, why it is important and which companies are in need of an ERP system.

May 3, 2024

What is an ERP system?

One ERP systems is an ERP system used to manage, integrate and interconnect various business processes within a company with each other. The easiest way to summarize an ERP system is something that keeps order and facilitates all the core business processes required to run a business. By bringing together all the data from a company in an ERP system, the system becomes your company's central nervous system and source of truth, which will not only simplify your business operationally, but also strategically.

Why is an ERP system important?

Economics requires an ERP system to be able to quickly close the books. Sales needs ERP to handle all customer orders. Logistics relies on well-functioning ERP software to deliver the right products and services to customers on time. Accounts receivable needs ERP to pay suppliers accurately and on time. Management needs immediate visibility into the company's performance in order to make timely decisions. And banks and shareholders demand accurate financial data, so they count on reliable data and analysis made possible by the ERP system.

An efficient ERP system is critical to the company's functions, and can be the difference between a well-functioning company and one that lags. The finance department needs to be able to manage accounting, accounting and accounts payable efficiently and correctly. The sales department needs to handle customer orders. Logistics needs to ensure punctual deliveries. Management needs real-time insights and making the right decisions at the right time. Banks and shareholders need good transparency and reliable financial statements.

The hub of all this is spelled ERP system. It is what binds all the different activities together and makes them “talk” to each other, which not only ensures the smooth and efficient operation of the company, but also makes the complex easier.

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Which companies need an ERP system?

It can be argued that any business can benefit from an ERP system. However, they are usually found among larger companies where the information is greater and the processes are more complex.

We at Saldo would say that ERP systems and the size of the company are not really related to each other, but that the simple answer to the question is that all companies that want to streamline their processes and centralize their administration in a single system need an ERP system.

If you recognize yourself in having to time report here, post there, and manage your orders or supplier invoices in a third place, it is likely time to start considering an ERP system. The great advantage of ERP systems or ERP systems is that you avoid duplication. You only need to perform your task once, in one place. When everything is gathered in one place, you also get a much better overview. You can easily understand which parts of the company are performing well and which are lagging.

So, which companies need an ERP system?

  • Companies that want to work more efficiently
  • Companies that want to have a clear overview of their core business processes
  • Companies that want to avoid duplication
  • Companies that want deeper insights

How does an ERP system work?

An ERP system is basically a software or platform that brings together and manages various business processes and resources within a company. The ERP system consists of integrated functions and modules, such as finance, human resources management, purchasing, inventory management and sales. These modules “communicate” with each other and share the same database, giving the company a full overview of the different parts of the business.

Often companies can choose the module (s) they need and scale up or down as needed. In addition, ERP systems or parts of it can be customized based on the company's own requirements and wishes.

Today, the most common solution is that the information is stored in the cloud, which means that the ERP system is always accessible as long as the user has an internet connection. However, companies that for various reasons do not want or cannot use the cloud-based model can of course opt for an on-premises solution.

Which companies need an ERP system?

It can be argued that all companies need and can benefit from an ERP system. However, they are usually found among larger companies where information management is greater and processes are more complex.

We at Saldo would say that ERP systems and the size of the company are not really related to each other, but that the simple answer to the question is that all companies that want to streamline their processes and centralize their administration in a single system need an ERP system.

If you recognize yourself in having to time report here, post there, and manage your orders or supplier invoices in a third place, it is likely time to start considering an ERP system.

The great advantage of ERP systems or ERP systems is that you avoid duplication. You only need to perform your task once, in one place. When everything is gathered in one place, you also get a much better overview and can easily understand which parts of the company are performing well and which are lagging.

So, which companies need an ERP system?

  • Companies that want to work more efficiently
  • Companies that want to have a clear overview of their core business processes
  • Companies that want to avoid duplication
  • Companies that want deeper insights

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What factors should be considered when choosing an ERP system?

When choosing an ERP system, companies should consider the following factors:

1. Needs and requirements of the company

It is important to understand your specific needs and requirements before choosing an ERP system. What features and modules does the company need? What business processes need to be automated? By identifying and defining these needs, the company can choose the ERP system or variant that is most suitable.

2. Ease of use and training

It is important to choose an ERP system that is user-friendly and easy to learn for the company's employees. Training and support should be offered to ensure the smooth implementation and use of the system.

3. Scalability and flexibility

An ERP system should be scalable and flexible in order to adapt to the needs and growth of the company. It should be possible to add or remove modules and functions as the needs of the company change.

4th. Integration with existing systems

If the company already uses other systems and software, it is important to choose an ERP system that can integrate seamlessly with these systems. This will facilitate the flow of information and avoid duplication and manual data entry.

5. Vendor reliability and support

Finally, it is important to choose a reliable and experienced ERP system provider. The provider should be able to offer support and maintenance of the system as well as be available to answer your questions and solve problems.

We create the ERP system you want

At Saldo Redvisning, we love helping our customers automate and simplify their processes. We have extensive experience in tailoring ERP systems based on the specific needs and wishes of companies, and know the difference a well-functioning ERP system can make on the last line.

At the same time, we understand that it can be difficult to know where to start, and that implementing new systems and processes can feel overwhelming. But every journey of change begins with a first step. Why not start it with a The first meeting?

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