What is an ERP System?

3 minute read

What is an ERP System?

ERP, which stands for ‘enterprise resource planning,’ is the software businesses use to manage their daily activities. ERP systems link and define business processes, enabling a seamless flow of data; by combining data from multiple sources, ERP systems eliminate duplicate information and data re-entry errors to provide accurate and up-to-date information. ERP systems are essential for businesses of all sizes and in all industries.

ERP 101

Instead of having disparate databases containing siloed information, an ERP system pulls data into a single database; consolidated data means business departments can see/use the same accurate and up-to-date information and have a comprehensive view of business processes. Businesses can also automate back-office functions as they pertain to technology, services, and other areas of operation.

The Business Value of ERP

The effect ERPs have on today’s business world is significant. When all data and processes are bundled into the ERP system, companies can align dispersed departments and improve workflow, which offers considerable time and financial savings.

Specific benefits include:

  • Improved business insight due to real-time information generated by reports
  • Lower operational costs because of streamlined business processes
  • Enhanced collaboration because users can share information
  • Improved efficiency
  • Consistent look and feel across applications
  • Reduced risk due to improved data integrity and financial controls

How Can eCommerce Sites Benefit from ERP?

ECommerce platforms can consolidate information from customer service, finance, HR, manufacturing, distribution, order entry, and supply chain processes into a single business suite with an ERP.

Since an ERP keeps information in a single database and integrates with other operational applications, an eCommerce system can access critical financial, inventory, and customer information faster and easier to build enhanced analytics and reports to identify customer trends. For example, if an ERP is integrated with financial data, users can see who is buying what and when. If the ERP is also integrated with a company’s customer relationship management software, it will identify things like low customer retention rates.

ERP is beneficial to eCommerce in more than analytics and reporting. Working in online wholesale or retail businesses is a multistep process; eCommerce systems can also use their ERP to track order fulfillment and update shipping information and inventory. ECommerce companies that invest in an ERP system will increase internal transparency, improve the customer experience, and grow the company.

If you’re interested in learning more about integrating your eCommerce site with an ERP, call us. We’d be happy to talk with you about the process and show you a demo!

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