When growing a business finally reaches a level where spreadsheets cannot serve, company managers may need to search for “What is ERP?”. ERP systems if the solution for organizations to digitize their process, save them from mountains of spreadsheets and increase their workforce productivity.

Although many business professionals might have heard the term “ERP”, not all of them understand exactly what ERP means, how it works, the benefits it can bring to their organization, or how to choose the right ERP system.

MonsterOdoo is a team of Odoo ERP professionals helping companies of all sizes innovate their operations by providing full Odoo ERP deployment services. In this article, we will provide the answers to all the above questions to get you ready for your successful ERP deployment to innovate your business and boost growth.

ERP stands for enterprise resource planning. The easiest approach to understanding ERP is to assess all of the essential business operations required to run an enterprise: accounting, finance, human resources, manufacturing, supply chain, sales, procurement, and so on. At its most basic level, ERP aids in the effective management of all of these processes in a unified system. It is frequently referred to as the organization’s record system.

What is ERP - Blog image

Every organization must execute work that involves a large number of stakeholders with different responsibilities. However, this is difficult when the information required to perform operations and make crucial choices is dispersed across disconnected systems. Employees struggle to find what they need and may not have access to all data whether it is stored in basic business management software or spreadsheets. For example, the accounting and finance departments may use separate spreadsheets with different statistics for expense tracking.

For the last quarter-century, many of the world’s most well-known and successful companies have relied on ERP to operate their businesses. This software may now be customized and priced to fit the demands of organizations of all sizes.

These disconnected data resources will hinder collaboration, efficiency, productivity, and especially organizational growth. It is also difficult to access a full picture of the business with accurate reports to make data-driven decisions.

An ERP system addresses this issue by centralizing information in a database to provide managers and staff with cross-departmental visibility. It also eliminates the issues associated with competing data sources, allowing them to assess multiple situations, uncover process improvements, and achieve significant efficiency benefits. This equates to cost savings and increased productivity as individuals spend less time searching for data.

For the last quarter-century, many of the world’s most well-known and successful companies have relied on ERP to operate their businesses. This software may now be customized and priced to fit the demands of organizations of all sizes.

Benefits of ERP to SMEs

As mentioned above, organizations of all sizes can benefit from ERP, not only large corporations but also SMEs.

Choosing the right ERP system offers SMEs many competitive advantages. Below are the 6 key benefits of ERP to transform SMEs businesses:

ERP benefits
  • Reduce Operating Costs: small businesses have a selection of affordable cloud-based ERP solutions such as Odoo ERP to choose from that eliminate the need for additional hardware, IT staff, maintenance, and upgrades.

  • Streamline Flow of Information: ERP technology automates repetitive processes and workflows to decrease manual mistakes and increase business process efficiency. As a result, your small business’s data accuracy, cooperation, and operational visibility all increase immediately.

  • Enhance Employee Productivity and Collaboration: By automating processes and allowing instant access to data, your employees can avoid tedious tasks, get more work done and enhance collaboration.

  • Scale along with the business growth: ERP systems, such as Odoo ERP, are modular,, which means that each application may be installed in combination or independently. As a small business, this allows you to pick and choose what functionality works best for you at the present, while still leaving the door open for seamless, easy expansion when your business scales bigger in the future.

  • Informed and Timely Decision Making: Allowing to access complete operational visibility is one of the most significant benefits of an ERP system. When you have a clear view of the entire picture at all times, you can make rapid, confident judgments and pivot based on solid facts.

  • Improve customer satisfaction: ERP software helps you to focus on the customer experience and strengthen your brand trust by providing improved tracking, simpler procedures, fewer mistakes, and more consumer insights.

How do ERP systems work?

ERP systems function by utilizing a defined, standard data format. Information entered by one department is immediately accessible to authorized users throughout the organization. This consistent framework keeps everyone on the same page. 

Assume a local food distribution network includes many outlets that frequently share goods and workers. When quality, sales, and personnel data from these locations is entered into the ERP system, it is structured to reflect the location from which it came.

How does ERP systems work?

The real-time data is then incorporated into departmental business processes and workflows. Leaders can observe whether one location is considerably better than another a few towns over at preventing waste and seek to figure out why, while operations can ensure staffing levels fit with traffic patterns.

ERP systems bring the most value when companies facilitate modules for each major department and ensure timely accurate data entry.

The collected data allows for faster data discovery and reporting, as well as a comprehensive picture of company performance and insights into how resources are allocated.

What ERP includes?

An ERP includes a number of different modules with features that can be tailored to fit your business demands. The most widely used ERP modules include:

  • Finance: The backbone of almost every ERP system. Finance modules keep track of all transactions, including accounts payable and receivable, and conduct reconciliations and financial reporting.

  • Customer relationship management (CRM): The popular modules for businesses in a wide range of industries. CRM keeps track and manage all communication with clients, customer interactions. It also can assist lead management to help sell more and enhance customer service.

  • Human Resource Management (HRM): It maintains complete employee details, such as accessible PTO and performance reports, and may identify workforce patterns across departments or demographics.

  • Inventory Management: An inventory management module displays current inventory levels down to the SKU level and continuously refreshes those data. It also monitors crucial inventory parameters. Products-based companies need this module to optimize stock on-hand based on current and forecasted data.

  • Manufacturing: This module assists businesses in coordinating all of the stages involved in manufacturing the products. The module can verify that production keeps up with demand and track the amount of items during-process and finished.products

  • Procurement: The procurement module handles purchases of raw materials and finished products. It can automate quotation and purchase order requests and, when connected to demand planning, reduce overbuying and underbuying.

  • Project management: This module makes it easy to plan and manage the workforce for projects. Project managers can assign tasks and track progress with clicks without having to chase every member of the team.

How much does ERP deployment cost?

ERP software price varies greatly based on the vendor, modules, and deployment style. In general, overall costs might range from less than $10,000 per year to millions of dollars per year. ERP systems are priced based on the demands of the target users, therefore those developed for new and high-growth organizations will be less expensive than those utilized by Fortune 500 corporations.

Because there is no hardware to acquire or system specialists to employ, cloud-based ERP, especially SaaS solutions, typically offer cheaper initial costs than on-premises software. A SaaS solution is one in which the vendor handles maintenance and charges its clients an annual fee, sometimes on a per-user basis.

Industries-specific ERP examples

  • Manufacturing & Assembly: ERP and supply chain solutions are used by all manufacturers to satisfy product quality targets, manage asset utilization, limit overtime expenses, handle customer returns, and more. Manufacturers may also get complete inventory management by tracking stock movements, identifying top and underperforming items, and managing procurement more effectively.

  • IT & Technology companies target to maximize their development capabilities to ensure all projects are delivered on time without any errors. With the right ERP solutions, they can streamline the process, enhance team communication to prevent misunderstanding, and nurture an innovative workplace.

  • Wholesales: All of these businesses aim to cut distribution costs, boost inventory turns, and minimize order-to-cash time. To attain these objectives, they require the ERP system integrated with inventory management, purchasing, and logistics functionality, as well as tailored automated processes.

  • Retail & E-Commerce companies need a robust ERP system with the ability to help them manage sales across multi-channel from brick-and-mortar stores to websites. The solutions need to be able to be integrated with POS devices, manage inventory, and track and manage online orders from website to shipment.

  • Service & Consultancy businesses require powerful, real-time ERP technology to help them stay on schedule while managing project profitability, resource utilization, revenue recognition, recurring revenue objectives, and customer service.

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