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What is ERP (Enterprise Resource Planning) in Simple Terms?

What is ERP Software?

There is a vast amount of information available out there pertaining to ERP, or enterprise resource planning. But what exactly is ERP and how will it help your business?

When you think about your business, there are so many moving parts and processes.  You may have one department that handles sales, another that handles human resources, one with accounting, inventory, and so on. All of these departments work independently, in their own silos, to get their day-to-day jobs done. From a high-level, ERP takes all of these groups and departments and brings them all together on one system.

Cloud ERP

When talking about cloud ERP, that means the solution does not require physical infrastructure like (servers and storage), you pay only for what you need, and it is scalable—as your business, users and technology needs expand, so does the software.

One Data Repository

ERP software has one data repository, enabling a single version of the truth throughout the entire organization. With synchronized information, all data will be up-to-date and unified so reporting will be accurate.

System Updates

Cloud-based solutions are known to have simple updates. The system is usually updated once or twice a year and can be done outside of working hours. Normally, users are not affected by updates except for the occasional UI change.

A Business Example for ERP

Think of a business that sells car tires. Their sales team has to go out and make tire sales. Inventory needs to be kept up so that tires can be ordered when needed. Distribution has to be aware of when a sale is made. Billing also needs to be notified when a sale is made to invoice appropriately, while accounting needs to be kept abreast of everything so they can have all records updated from a financial sense.

ERP software is going to sync all of those processes. Before a tire sale is made, the opportunity is created and at time of sale, the account executive updates the record in the ERP system so that the rest of the company sees that a sale is in progress. The sales team knows what inventory levels are at they can check the ERP and see a real-time view of inventory. If an order was placed online, same process. The sales team can see which tires they have in-stock so they never double sell an inventory item. And supply chain managers know immediately when supply and demand are not at the right ratio. It is about sharing information across departments to gain greater efficiency.



When it comes to ERP, it is all about making your company work in a more streamlined manner for easier growth and manageability and cloud-based solutions tend to be more affordable and easier to manage. NetSuite is the world’s #1 cloud-based ERP system on the market. If you want to see how a cloud ERP solution can help your business, schedule a custom demo today.