Why is ERP Software Useful?

Why is ERP software useful? Its immediate benefit addresses data silos. With ERP consolidating all business processes across your organization, different departments can now use the same data sources, making decisions and analyses that are aligned with the company’s overall goals. Here’s a rundown on the other key benefits of ERP:

  1. Better communication throughout the organization.
  2. Control over costs and savings.
  3. Faster task completion.
  4. Better planning.
  5. Data security.
  6. More flexibility via customized deployment.

Why is ERP Software Useful?

Are you having trouble keeping up with orders and your inventory is in shambles? Is financial management becoming an increasingly difficult task, making it harder to reconcile your monthly figures? Is sales forecasting becoming more like guessing than a methodical process? These may be  signs of data silos and if you answer yes to the following, it might be time for you to implement an ERP system.

ERP software platforms are tools that businesses (mostly manufacturers) employ to effectively integrate and manage critical areas across your organization. These processes include planning, inventory, purchasing, marketing, sales, finance and even human resources. This solution is designed to provide users with total control over corporate departments’ computer systems, facilitating communication and information sharing.

What are examples of ERP software?

ERP software functions as a central control hub, integrating all departments and processes, giving businesses visibility into their organizations by leveraging critical information. It is capable of doing away with redundant and inappropriate technologies by acting as a link to all departments’ systems. It likewise captures data across all corporate divisions, providing relevant users with access to the same for use in improving productivity. This database undergoes constant updating by users themselves in real time. Over the years, ERP systems have grown in popularity among businesses. Proof of this is that 81% of organizations have been found to have implemented or are in the process of implementing an ERP solution.

Why is ERP useful? This is the question that we will seek to answer in this article. The impact of such system on business organizations shall be discussed together with the top reasons for using the tool as well as leading examples of ERP solutions.

Data silos are a major bane to efficiency, one which ERP can address (source: eConsultancy).

It’s No Magic Pill Though

Despite these functionalities and benefits of ERP system, the use of such tool does not guarantee corporate success. The danger of overspending associated with ERP implementation is real. System incompatibility can also pose a problem if users do not change the way their organizations operate. Aside from this, improper implementation of an ERP system could have repercussions that include accumulated costs that could hurt a business in the long run. These problems often stem from organizations’ refusal to part with old processes that may not sit well with new systems.

Why is ERP Useful?

Because an ERP solution unifies businesses’ resources to meet the requirements of all the departments within, they basically facilitate communication resulting in improved operations. Now there are a lot of benefits associated with the use of such tool, but why is ERP useful? Here we discuss the direct impact of ERP platforms on business organizations as a whole.

1. No More Communication Barriers

ERP software effectively gets rid of known barriers to interdepartmental communication inside companies. An example of this would be in the case of departments in charge of sales, which are traditionally independent of others. As ERP acts as a common solution among departments, it gets rid of factors that hinder product delivery and communication. Under an ERP system, each corporate department works in conjunction with all its counterparts to form a single consciousness. This promotes smooth operation and ultimately profitability.

2. Cost Control and Savings

A very significant and apparent effect of ERP software use on businesses is the decrease in resource and data management costs. This is achieved by the fact that reductions in IT management practices result from the use of a singular management platform. Why pay for multiple technicians when you can settle for one? Aside from these, huge power savings can also be made as most ERP systems are cloud-based and are maintained by their vendors. Such result in savings and therefore, better cash flow.

3. Faster Completion of Tasks

ERP apps are also known for their capability to track products–from production to delivery to end-users. If a computer company for example uses such a system, customers can easily make orders and pay for them through online systems. The order is then processed and proceeds to production. The system is basically one big production line involving few staff and a single ordering platform, which can be accessed by relevant departments. This capability promotes faster production, leaving satisfied customers.

4. Better Planning/Reporting

Using an ERP solution amounts to having a singular reporting platform for all processes. This feature allows the application to generate analytics and reports anytime. Functions across all departments can easily be analyzed and compared as the need for the use of emails and spreadsheets is eliminated. Financial reporting is where ERP platforms excel, allowing users to generate cash flow and income statements easily. Efficient financial management is always a sound proposition for any business, which is a very effective tool for growth.

5. Data Security

Data security is one area where ERP solutions are very useful, allowing departments to share information. This results in total control over who gets to access and alter information. Provision of a singular input system is the key to such systems’ ability to provide high-level security. Unlike using multiple systems, it doesn’t result in source conflicts while boosting data consistency, security and accuracy. Information security benefits not only companies but customers as well.

6. Customization Capability

Most ERP solutions are modular in nature, hosting multiple tools in a single suite. Every app that comes with an ERP system can either be an independent platform or can integrate with the whole software package. This allows businesses to choose only the apps they need, resulting in an interface that is highly-suitable for the company. System implementation is likewise a part of customization with on-premise solutions requiring additional hardware while cloud-deployed systems are handled by vendors. ERP scalability results in additional savings for users.

When Is It Time To Purchase An ERP Solution?

There are a variety of signs that indicate the need for an ERP solution that businesses should look out for. Recognizing these red flags could prove beneficial to any organization who seek profitability and growth. Here are some of them.

1. Too Many Solutions for Different Processes

Businesses should take time to analyze their existing systems. Do they utilize different platforms, which could otherwise be done by a single solution? Sticking to such systems could stunt not only corporate growth but bottom lines as well. Not only that, separate systems could prove disastrous to otherwise smoothly running processes. For example, inaccurate sales data could negatively impact inventory management while lack of accounting information could adversely affect processes such as payroll and marketing budget allocation.

2. Tedious Accounting Processes and Complications

One of the most obvious signs that a business requires an ERP solution is if it still makes use of paper sales orders and invoices, which involves hours of manual data entry into varied systems. Take time to think how much time can be saved by automating such processes. In addition, ERP software can also help in financial reporting. Such is accomplished by easily reconciling financial data across different systems and storing them in a single database.

3. Poor Sales and Inventory Management

One of the most pressing concerns among growing businesses is inventory management. It is but natural for businesses to ensure that ample stocks are available in certain locations at the right time. The separate management of inventory, sales and customer information cannot be undermined. If a highly-sellable product becomes unavailable to customers, chances are sales will suffer. The same goes for inventory tracking, lack of which could adversely impact company image.

4. Complicated and Outdated Systems

It is a known fact that managing multiple systems can pose problems for IT managers. The costs, time and complications associated with customizing, integrating and maintaining these platforms are things that businesses could do without. Patching these systems, which often come in the form of legacy software, on-premise and system upgrades could prove troublesome for managers, not to mention expensive.

Contrary to traditional practice, purchasing additional software does not only fail to fix such systems, they also make them more complex. The use of modern technology like cloud-based ERP solutions is bound to resolve these complications as it eliminates the need for updates and can be scaled as a business grows.

Examples of ERP Software

There are tons of ERP solutions out there, each focusing on different aspects of businesses. Here we give you those that specialize in sales, marketing, accounting and production management. The following are some of the most popular ERP systems to date.

1. NetSuite ERP

Another ERP solution worth looking into is NetSuite ERP. This powerful application is targeted at small and large enterprises, helping them automate critical processes that include inventory, billing, fixed assets, finance and order and inventory management. The solution even provides rank and file employees access to key performance reports. Popular integrations include Netsuite apps such as Inventory, CRM and eCommerce, among other products.

The platform also assists users in supply chain optimization as it has an inventory management functionality. This feature provides users with visibility into critical inventory, procurement and supplier indicators. It also offers accounting capabilities, enabling businesses to manage revenue, expenses and financial disclosure. Calculation can even be accomplished using its revenue recognition management tool so that users can generate financial statements for service and product sales.

Want to check out and learn more of the software’s comprehensive features? Simply sign up for a NetSuite ERP free demo here.

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Robust ERP software SYSPRO is specifically targeted at manufacturers, helping them synchronize, integrate and control critical processes. Businesses have two deployment options, on-premise installation or via cloud. The app is capable of managing costs, controlling losses emanating from manual and repetitive processes and paperwork. It can manage distribution as well, helping businesses in warehouse automation. The vendor offers a great free trial plan that lets you try out all the key features of their app first.

Using the software, manufacturers can also increase profits as the solution offers accounting and financial functionalities, which can greatly improve financial management. What’s even better is that the system offers insights that help minimize risk while promoting business growth. Businesses can likewise benefit from the product’s automation capabilities, resulting in the creation of “smart factories,” which feature tools that can automate processes and communicate online.

3. Scoro

Cloud-deployed ERP solution Scoro is ideal for SMBs who are in the business of consulting, information technology and advertising. It has a host of useful functionalities such as work scheduling and tracking, CRM, advanced reporting and project management, to name a few. The software has an interface that is easy to use and gets rid of the need to switch between email clients and apps. The vendor also provides a free trial plan that will allow you to test all the important features of their tool first. You can easily sign up for Scoro free trial here.

One of the system’s more notable features is its control hub, where users can access account and key performance data, tasks and calendar events, among others. This makes the app so much easy to use even for novice users. Aside from this, Scoro also offers country-specific integrations for European users.

4. Sage Intacct

A cloud-based financial management and accounting tool, Sage Intacct offers companies the powerful features of Sage and Intacct. It was developed to boost business performance by making companies more financially productive. The solution is being offered by numerous accounting firms and resellers to their clients. Prominent features include cash management, accounting, vendor management and purchasing, among many others.

Recognized by AICPA as a top provider of financial apps, Sage Intacct enables accounting professionals to make sound financial decisions using critical statistics and figures as basis. The platform is highly-recommended for sectors such as retail, wholesale distribution and healthcare, which are undergoing growth. It is highly-scalable and is able to keep up with the needs of growing companies. All machines running on Windows, Linux and Mac (OSX) are supported.

5. Brightpearl

Brightpearl is a multichannel retail management platform that enables companies to manage key processes like inventory, accounting, orders and customer data using a single console. It is ideal for use by multichannel retailers, helping them grow and improving profitability. An additional benefit is its provision of total control over retail operations, allowing decision-makers to focus on more important matters.

A key feature of the app is its ability to offer insights in areas such as SKU, customer and channel levels. This flexible piece of software can also integrate easily with major shipping companies, ensuring accurate and on-time shipments. Brightpearl offers centralized inventory management and accounting capabilities, making warehouse and financial management easier for users.

6. Horizon ERP

Horizon ERP is a comprehensive integrated ERP that comes equipped with key tools for goods and services tax (GST), distribution, retail and manufacturing as well as inventory management and accounting. Built to greatly accelerate back-end operations and maintain steady business growth, this software greatly simplifies complex processes and minimize issues faced on a daily basis.

On the distributions front, Horizon ERP simplifies the ordering process by allowing users to order by bulk and connecting the sales team to the main office for a smooth and frictionless exchange of information. For retail, the software provides users with full control of all essential tools on a single environment, from storing customer information to ensuring one’s inventory is adequately supplied. On the manufacturing front, Horizon ERP gives users a transparent view of all resources and available tasks for easier tracking and management.


We’ve answered the question: Why is ERP software useful? The benefits are clear and you now have an idea of what some of the leading solutions can bring to your table. However, the efficacy of such applications still rests on whether or not it provides your organization’s needs or if it’s properly implemented. Now committing to one is a major decision but it could very well spell growth and more profits for you. When you’re ready to choose such software for your business, you can read our top 20 ERP software solutions here. Good luck!

Daniel Epstein

By Daniel Epstein

Daniel Epstein is a senior financial research analyst at FinancesOnline and the architect behind our Fintech and ERP content division. His main areas of expertise are blockchain technologies, cryptocurrencies, and the use of biometrics in fintech solutions. His work has been frequently quoted by such publications as Forbes, USA Today, Entrepreneur, and LA Times. With more than 1,800 solutions scrutinized in the last 5 years spent on our team he always prioritized offering readers an unbiased perspective on modern financial technologies.

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