What is an ERP? Description and basic features

One of the most important types of business software today is ERP. Although it is very likely that you have already heard of this type of tool, or even that you have one, we would like you to be able to be clear about the concept of ERP, since not all business management programs can really be equated with this tool. But do you know what an ERP is and what it is for or how it works?

Below we will show you what an ERP means, what its main advantages are, how an ERP works, what kind of modules exist today and can be used and why it would be important for your company to be able to implement this type of software.

What is an ERP?

An ERP is an enterprise resource planning software. It stands for Enterprise Resource Planning. As a definition of ERP, we can say that it is a type of computer program with which it is possible to have control of the different areas of business management: invoicing and accounting, cost control, budgeting, purchasing, personnel management, etc.

When we ask ourselves what ERP means, some people think of programs that are expensive and difficult to implement. In the past, ERPs were very complex tools, which only large companies used to have. But today there is a great variety of ERP management programs, which can be adapted to all types of companies. Today, fortunately, almost every company is clear about what ERP is, although the most efficient and appropriate solution is not always used.

The ERP system allows you to automate tasks that have traditionally been done manually, which helps you save time, improve productivity and efficiency and reduce costs.

Why have an ERP?

ERP is and should be the backbone of your company. The tool with which everything is connected and in which you can consult any data. One of the advantages of ERP is that it allows you to generate reports, with which you can have a complete view of the company. This type of software is therefore a decisive tool for decision making, since you can see a wide variety of important aspects: sales evolution, best-selling products, relationship between income and expenses, best-selling establishments, production level.

Companies that do not use an ERP is because they are still using office automation tools for business management. This makes most administrative processes very complex and time-consuming. For example, if you want to calculate how much you have sold in the last six months, you have to calculate it manually, and produce graphs and reports from the data you have. Nowadays you can hire an ERP program for SMEs in which you can know this data in just a couple of clicks.

Not all invoicing software can be considered an ERP, since we are talking about a management tool that integrates multiple processes. An ERP is much more than a program to make invoices, or an accounting management program. It integrates the functions that different departments need to do in a single tool.

Benefits of having an ERP

There are many reasons why your company should have an ERP. One of them is undoubtedly that you will be able to automate numerous tasks that until now you performed manually. Companies need to obtain information and be operational much faster, so if you have to calculate sales and expense data manually, you are going to lose a lot of time.

Another benefit of ERP is that you will make fewer mistakes. When you enter data manually into an Excel sheet, there is a high chance that you will make a mistake due to carelessness. Instead, this problem would be solved if every time a sale is made in your physical or online store, it is automatically recorded, an invoice is generated, the inventory deducts the units sold, and the data in the income and expense ledgers is updated in real time.

In short, ERP helps you automate, reduce errors and improve the efficiency of your business. The fewer manual administrative tasks you have to do, the more time your employees have to focus on what's important: selling.

How does an ERP work?

The operation of an ERP is simple. It is a tool that is generally modular and has multiple functionalities in which the data that you need to have in your business is recorded.

Functionalities of an ERP

The features of an ERP can be very varied. The most common are:
  • Invoicing and accounting
  • Expense control
  • Purchasing
  • Inventory and warehouse
  • Production
  • Human Resources
  • CRM
Integration with eCommerce

Vertical ERP software can also include specific functionalities for your industry, which can be of great help to improve your competitiveness. For example, an ERP for winery management can include functionalities for grape harvest management, or an industrial ERP can have more advanced tools for production control, quality control and logistics.

Modules you can add to your ERP

As we have already mentioned, ERP tools are usually of the modular type. This is one of the most valuable ERP features, as it makes it more accessible. This means that you don't need to hire a developer to create new functionalities, but simply configure the new modules you need. All in all, customization is easy when you use an open source ERP, as is the case with Solmicro ERP. In this way, the software is flexible and adapts 100% to the needs of your company.

ERP integration and implementation

An ERP can be integrated with multiple tools, depending on the company's needs. For example, you can connect your ERP with a production control MES software, or with a Human Resources management software, depending on your business needs. Ideally, you should have a comprehensive tool, so that you can automate your company's processes as much as possible.

The implementation of an ERP is done taking into account the specific needs of your business. In this line, a flexible and customizable ERP as Solmicro ERP is the best option for you to have a competitive software adapted to the needs of your company.

Why does your company need an ERP?

Your company needs an ERP because digitalization is essential for competitiveness and profitability nowadays. If you want your company to be efficient and to be able to offer a good service to your customers, you need to tackle digital transformation. And for digital transformation you need an intuitive, flexible and advanced ERP that adapts to the needs of your business.

There are many companies today that already have a management program, or even an ERP, but it is usually an obsolete tool, which is installed on the company's own computers and does not provide sufficient scalability to the organization, since it has many limitations and is not updated. If this is your case, it is important that you evaluate why changing ERP would have advantages for you.

With an ERP like Solmicro ERP you will be able to automate processes, improve decision making and have a more accurate view of your business.