What is an ERP System? Why Use One?

Enterprise Resource Planning

What is an ERP system?

The business realm has its own specialized jargon, jam-packed with confusing acronyms. More likely than not, much of your time as an entrepreneur, manager or executive has been spent quickly googling a particularly baffling abbreviation. However, that's the world we live in. So, as we search for solutions to the various pain points facing our growing business, one more acronym is sure to show up - ERP or Enterprise Resource Planning.

Once defined, acronyms often make perfect sense. For instance, once you know that ROI is "Return on Investment", the meaning becomes clear. With ERP however, this is not quite so evident. Just what is Enterprise Resource Planning? Apparently it has something to do with the enterprise as a whole. So far so good, but what are these resources and why do we need to plan for them? Somehow the term does not fully reflect what it actually seems to entail. Alternative monikers that perhaps better describe the concept might include:

  • TOM – Total Operational Management

  • TOS - Total Operational Synergy (or Solutions)

  • TOI – Total Operational Integration (or Insight)

  • EWC – Enterprise Wide Connectivity (or Communication)

However, for now ERP seems to have stuck.

For the philosophically minded, a good expression would come from Jeremy Benthams' concept of a panopticon.

    An "all-seeing" structure that permits a complete view of all of the parts or elements of something.

In other words, an ERP system is a software-based technological solution to common organizational pain points that brings together and integrates every core business process into one cohesive view that's available to all relevant employees/stakeholders in real time.

Integrate your core business processes

As a startup, Excel spreadsheets may be all that is needed for you to keep track of simple expenditures and revenues. However, as businesses evolve and grow, it's easy to start accumulating single-purpose pieces of software that address one particular need. Unfortunately, this can grow out of control, pretty fast. 

  1. Starting Out - Excel Spreadsheets.

  2. Invoicing - Freshbooks, Invoicely or Zoho.

  3. Accounting - Quickbooks, Sage 50 or Xero.

  4. Website – Joomla, Wordpress etc.

  5. E-Commerce - Magento, Woocommerce or Shopify.

  6. CRM - Salesforce, Hubspot etc.

  7. Email Marketing - Mailchimp, AWeber or Drip.

  8. And so on...

This is just a small sample size of the various options that demonstrates how quickly your business systems can become segregated

These multi-platform issues arise due to differing operational requirements, and bigger businesses aren't immune. Think of the unique requirements of managing inventory warehouses, distribution logistics, manufacturing processes, sales efforts, marketing plans and finances. A good ERP system (like Odoo) is designed to alleviate the inefficiencies and complications created by having these performance-draining disparate systems that have randomly developed over time.

What is an ERP?

An ERP System is a software-based technological solution to common organizational pain points that brings together and integrates every core business process into one cohesive view that's available to all relevant employees/stakeholders in real time. It should promote organizational efficiency and prevent the accumulation of many disparate pieces of software.

Why do you need an ERP?

It should be a little clearer now as to why the implementation of an ERP system should be considered. At some tipping point, the negative impact of these disparate systems on operations and the bottom line becomes unworkable. 

At JT Moniker, we have chosen to work with Odoo ERP for many reasons. The most prominent of which is that it provides the most benefit for the lowest price. So, what are these benefits that you should look for when selecting an ERP for your business? 

Sales are the lifeblood of any business. In a customer-centric enterprise, successfully and consistently achieving sales is a multistep process that touches every part of an organization. Smooth internal communication between departments combined with external communications with customers, suppliers or stakeholders is vital. Hindrances at any stage of this process impacts your business as a whole.

Seamless workflows that provides relevant real time information becomes an invaluable tool, enabling  individuals within an organization to better perform in their respective areas of responsibility. This facilitation of operational proficiency by defining and automating business processes is a key driver of growth.

Reverse application creep by consolidating the flow of data between the integrated departments of an organization. A single interface for your business should dramatically improve internal processes, and therefore increase performance.

Standardizing business processes and the interactions or communication between departments creates efficiency by making key information readily available to all stakeholders in a timely fashion.

Integrating sales, marketing, procurement, operations, customer service and accounting on a single unified platform promotes organizational efficiency and harmonious departmental interaction - resulting in improved productivity.

Monitor and control business activity at the management level. With top level permissions, executives and managers are able to spot inefficiencies and opportunities easily and react accordingly.

Long term cost savings result from retiring costly legacy systems, riddance of integrations between 3rd party apps and the overall operational efficiency gained as a result of using an ERP.

Reducing redundant data entry and data integrity is promoted as a result of the streamlined, process-oriented flow of an ERP system (especially Odoo, which is very workflow dependent). This reduction is the result of a single input being used and passed through the system in a logical, step-wise manner.

Implementation of automated processes further promotes data redundancy and operational efficiency while allowing companies to redirect, or reduce the obsolete resources and personnel.

Make data-driven decisions based on the intelligence that's generated each day from every operational function that is performed within an organization. In today's highly competitive and ever-evolving business environment, making statistically driven decisions is the best assurance of continued sustainable growth. 

How can an ERP help your company?

Imagine a single app or system capable of integrating the inputs and outputs from all of the operational business activities an organization is engaged in. Further, capturing this activity in real time and instantly communicating it throughout the organization to be used and actioned as needed by relevant team members. This is how a good ERP system, like Odoo, is a must for any growing organization.