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How Do ERP Systems Work?

Building Material ManufacturersHow Do ERP Systems Work?

Many business owners and leaders have heard of enterprise resource planning (ERP) solutions and what they can accomplish. Advances in technology and infrastructure have leveled the playing field making ERP an affordable option for businesses of all sizes in any industry sector. While you may be ready to upgrade your business technology, you might be wondering how do ERP systems work? Here’s what you need to know.

The Foundation of ERP Is Integration

An ERP system is made up of several integrated applications that businesses may already have in place, but are using as standalone programs to manage, such as:

  • Accounting and financial transactions
  • Supply chain and vendor support
  • Inventory and warehouse management
  • Manufacturing and distribution operations
  • Human resources and payroll systems
  • Sales and marketing
  • Customer service and engagement

Instead of separate software for accounting, inventory, customer relationships and other important business processes, ERP is an all-in-one solution.

Modern cloud-based ERP systems are giving small to mid-sized businesses the ability to compete with enterprises. They are subscription-based and allow companies to control IT budgets and eliminate the need to buy expensive hardware and software. They are also much more scalable and allow businesses to add or change users, features and functions based on current needs.  

4 Key Advantages of ERP Systems

  1. Time-saving automation: A centralized solution aggregates data in one spot, making it easier for your employees and leaders to enter, access, analyze and use. Data is easily shared for multiple uses within the system. For example, after a customer places an order, you can automatically update inventory availability and schedule production or shipments. Built-in workflows eliminate redundant data-entry between systems, which saves valuable time and protects the integrity of your data. These and other automations boost productivity and free up time for your employees to focus on other tasks.


  1. Real-time business intelligence: Many ERP systems include built-in business intelligence (BI) and reporting features. Instead of creating and reconciling reports from multiple software programs and spreadsheets, an ERP solution will capture and deliver key metrics in the form of real-time dashboards, charts and reports. Business leaders can monitor trends in sales, for example, and identify seasonal or product trends at-a-glance. This information is valuable for forecasting, planning inventory purchases and scheduling production. Centralizing your data will highlight ways to reduce waste, cut costs, work more efficiently, boost sales and, most importantly, protect profit margins.


  1. Scalable and flexible: Today’s ERP solutions are not static; they are surprisingly scalable. You can add or change users, features and functions as your business grows and changes. To protect your investment, it’s important to select a business management solution capable of aligning with your business needs and goals right now and today, but flexible enough that you won’t have to worry about outgrowing it quickly.  


  1. Strong customer service support: An integrated ERP solution delivers the right data, to the right people, at the right time. The faster your sales and service reps can access customer information, the faster they can respond to customer needs. Prompt, accurate customer service is essential in this digital era for long-term loyalty.

ERP Systems Position Your Business for Success

The marketplace is fast-paced and customers have high expectations these days. Using disparate software programs to run the business is inefficient and that’s where the real value of ERP comes in—efficiency. They empower businesses to compete and thrive in a digital era. Let us know if you have any questions about ERP systems and if they are a right fit for your business.

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