What is ERP and How Do ERP System Works? Types, Benefits

What is ERP

For successful business practices, you need to speed up the automation processes of your business through various tools. As the smooth, efficient and fast business operations yield high income and revenue. One of the latest tools to boost business operations is the ERP software system. Wondering what is ERP, what are its types, what are its benefits and why it is employed? Let’s explore it all in this short blog.


What is ERP (Enterprise Resource Management)?

This modular software brings together multiple administrative and operational departments of the company in the same place by storing and centralizing the data. It connects and aids various departments to get data whenever there is a need.

ERP contains multiple modules that automatically collect, store and use the information for smooth business operations. Generally, this software brings together the sales department, finance, human resources, manufacturing and other departments of the company in a single place.

Companies are divided into various departments and units that need to interact, communicate and shares data while working on their business operations. All departments of the company need access to the modules they require. Through ERP software, a finance manager can access the HR database and get the information he/she wants.

Now that you’ve got what is ERP, let’s discuss the types of ERP.


ERP Types by Industry

ERP software is useful for every industry. It has different types based on the industry:

  • Apparel ERP is used in the closing industry.
  • Automotive ERP is used in the auto manufacturing industry.
  • Cannabis ERP is for the cannabis industry.
  • Higher Education ERP is used in college and university ERP system.
  • Manufacturing ERP or MPR is used in production processes.
  • Construction ERP is used for managing the construction task

You need to use industry-focused ERP software to get the features as per your industry. A general ERP solution might not be equipped with the features that your industry needs. So, you can only benefit from the Enterprise Resource Management (ERP) software if it is industry-specific and it fulfils your business needs.

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ERP Types by Implementation

We can divide the ERP software based on the type of implementation. These days, there are four types of ERP by implementation:


  1. On-premise ERP
  2. Open Source ERP
  3. Cloud-Based ERP
  4. Hybrid ERP


Benefits of ERP:

There are a lot of benefits of ERP software. Some prominent benefits are as follow:

  • It is used for enhanced business reporting
  • It provides better customer service
  • It reduces inventory cost
  • It improves the cash flow
  • It saves the cost of the business
  • It improves business processes
  • It is used for supply chain management
  • It improves business collaboration and workflow
  • It helps in securing data
  • It enhances business visibility
  • It stores the data
  • It provides enhanced reports

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How ERP Works?

ERP software helps to reduce manual labour and to simplify the workflow of your business by using a centralized database for various business processes. Employees can use the dashboard to find the real-time data collected across the business to figure out the profitability and productivity of the business.

Without ERP, data is shattered and it cannot be accessed by the departments of the company. It saves your time by automating processes. You can easily share and visualize information of the organization through ERP software. This altogether helps you to achieve the business goals.


Quick Sum Up

So you’ve got to know what is ERP, what are its advantages, what are its types and how it works.

You need to remember that this tool is going to enhance and scale up your business if it suits your business. You just need to figure out what ERP software you need to get the maximum output from it.

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Disclaimer: This blog is just for general information on ERP.

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