Enterprise Resource Planning (ERP): Your Complete Guide

If your business operations are feeling a little disjointed—or you want to make sure your company can grow smoothly, without snags—enterprise resource planning can help.

Enterprise resource planning is both a mindset and a tool—one that you can use to streamline your core business processes, gather more data for decision making, and eliminate redundancies.

• What is enterprise resource planning?
• Benefits of enterprise resource planning
• How to implement enterprise resource planning
• Best practices for maximizing efficiency with ERP

What is enterprise resource planning?

Enterprise resource planning involves a specialized software system that streamlines business operations.

ERP software applications work as a single source of truth for an entire organization, making it easy to share essential data points about:

• Accounts payable and receivable
• Financial reporting
• Sales
• Business intelligence
• Marketing
• Human resources
• Customer relationship management
• Resource allocation and leveling
• Logistics
• E-commerce order management
• Material requirements planning (MRP) and inventory management
• Supply chain management
• Warehouse management
• Regulatory compliance

Implementing an ERP system is often one part of a broader enterprise resource management strategy.

Benefits of enterprise resource planning

Siloed organizations don’t always share data across teams, which can create issues like:

• Sales promising customers a new product that can’t be sourced or developed in time
• Accounting projections and teams resource allocation plans not lining up
• Human resources not being informed about hiring plans
• Logistics and operations accidentally duplicating work, reducing profitability
• Customer service not being kept up-to-date on new marketing campaigns that customers are asking questions about

An ERP can help you improve access to data across departments, reducing your company’s potential for issues like these. You’ll be able to do things like:

• Make better business decisions while considering the impact across the organization
• Improve overall operational efficiency—and potentially reduce expenses at the same time
• Experience easier project resource management
• Increase accuracy of capacity planning
• Deliver better, more personalized experiences to customers
• Reduce risk levels
• Improve operational compliance
• Foster stronger relationships with vendors and suppliers

Of course, as you make data more accessible across your entire organization, you’ll also have to consider making improvements to your data security measures. Many ERP tools will allow you to assign access permissions and implement other protections for sensitive employee data.

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How to implement enterprise resource planning

The first step in ERP implementation is to identify the business processes and departments that can benefit from the tool. This type of planning goes hand-in-hand with developing a sound enterprise management strategy—so if you haven’t done that before, it can be a good place to start.

Once you’ve established which departments and teams will need to tap into the ERP tool, you’ll want to look for a software solution that supports all of your needs.

Choosing your new ERP software

There are a multitude of ERP software tools on the market, with options available for businesses of all sizes. Many ERP tools are available as cloud-based, software-as-a-service (SaaS) solutions that can keep your company streamlined, no matter where they are in the world.

If you don’t think you need a cloud-based ERP, though, you can also find on-premise ERP solutions.

Small businesses may want to look for an all-in-one business management software platform like Striven, Microsoft Dynamics 365 Business Central, or Sage. These platforms contain a mix of modules and tools for essential functions like:

• Financial management and forecasting
• Invoicing
• Approving paid time off
• Payroll
• Time reporting and billing
• Sales
• Project management
• Order processing

A small business management system offers several of the same solutions as an enterprise resource planning tool, but on a smaller scale. They can grow with your company to a point—but if you scale to large proportions, you may need to upgrade to a full ERP suite.

Large corporations can use true ERP platforms like SAP S/4HANA and Oracle E-Business Suite to manage nearly all aspects of their operations. These ERP solutions are likely to be more comprehensive single systems than a platform designed for small businesses, and typically include tools to support manufacturing, logistics, and risk management.

Some enterprise-level platforms, like Oracle Netsuite, make small business solutions as well. If your business plan sees you growing quickly, opt for a platform like this—it can see you through your entire business lifecycle, with pricing and features suited to each stage of growth.

Training your team on ERP tools and processes

Once you select the ERP application that most closely aligns with your business needs, you’ll want to train your entire team on how to use it.

The interconnected benefits of ERP software can only be realized if all stakeholders are actively using the tool. If one department is still putting their data in spreadsheets, while everyone else is using the ERP, you won’t get the most use out of the tool.

You’ll want to:

• Establish an implementation plan and change management processes. Decide if you’ll roll out the tool gradually across departments, or set a firm changeover date for everyone to use it at once. Be sure to also have a plan for how you’ll help your teams work through the change, too.
• Use training resources from your software provider. Some ERP vendors will have training documentation and resources that you can use to help your teams during onboarding.
• Reinforce that the ERP is a single source of truth. Fully explaining the benefits of adopting the ERP system and providing adequate training can help support ERP adoption throughout your company.
• Work with a professional ERP consultant. An ERP consultant is skilled in developing enterprise resource plans, from establishing your key needs to selecting and implementing the right tool. By bringing on these consultants, you can increase your rate of ERP adoption—and success.

Best practices for maximizing efficiency with ERP

Selecting and implementing an ERP tool is only part of the process. To get the most out of your investment, you’ll want to continue to re-evaluate how you’re using the service. Regular audits can help you make sure it’s being used as intended—and identify any additional needs that may pop up as you grow.

Look for:

• Duplicate and redundant business functions performed by more than one team or user of the platform. An ERP tool should help to eliminate these redundancies—so if you see them happening, work with your team to resolve any issues or confusion about how to use the software.
• Recurring workflows you can automate to save time and free up your team members’ time. This could include things like setting up automation to send client emails as they move through a customer relationship management (CRM) tool or building real-time data dashboards that automatically update and share key information with your team members throughout the day.
• New ways to report and view data, such as taking a deeper dive into usage metrics can help you identify areas for optimization—both in terms of how you use the ERP tool, and across your entire organization. The more data you have access to, the better informed your decisions can be.

If you find that there’s a function or process that your ERP software doesn’t support, look for a complementary tool that integrates with your system. With the help of application programming interfaces (APIs), automation tools like Zapier, and even artificial intelligence (AI), you may be able to connect another tool to your ERP and round out your system as needed.

Ready to get started with enterprise resource planning?

If ERP implementation feels like the next logical step for your business, you can get started by finding an enterprise resource planning consultant on Upwork. These pros have experience guiding businesses just like yours through the ERP deployment process.

You can work with an ERP consultant to figure out what areas you need to streamline, to select and configure the right enterprise resource planning system for you, and to even train your team.

All it takes is an Upwork account—log in or sign up today to post a job and find just the right ERP pro for your business.

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Upwork is not affiliated with and does not sponsor or endorse any of the tools or services discussed in this article. These tools and services are provided only as potential options, and each reader and company should take the time needed to adequately analyze and determine the tools or services that would best fit their specific needs and situation.