By : Jennifer Karpus-Romain | March 3, 2020 | 4 min read

The Importance of ERP

importance of ERP

It’s almost impossible to overstate the impact of enterprise resource planning (ERP) solutions in the modern business world. Over the last few decades, ERPs have replaced disconnected workflows, incompatible business tools, and siloed fiefdoms of data. Overall, ERP is dramatically increasing overall efficiency, so it’s game-changing business technology (to say the least).

Meanwhile, it’s not always easy to explain what a great ERP solution actually does for a business. In the 1990s, ERP was pitched as an “integrated suite of business management applications.” But as ERP has evolved, it’s outgrown this definition. Today, it’s an essential part of the modern business world. But what makes one ERP solution better than another?

Why is ERP so important, and what are the fundamental elements of a great ERP solution? These questions can be surprisingly tricky to answer. The ERP ecosystem is complex, and every company that uses ERP software has its own specific needs. Features that are non-negotiable must-haves in one industry can go largely unused and unnoticed in another. But there are some basic elements that every great ERP solution contains…

Five Essential Functions of ERP

At the core of every professional-grade ERP software suite, there are five core business solutions. These tools are built to work in concert with one another. In other words, they provide complementary insights while they streamline data management. While every business won’t use all five elements, most rely on at least two.

Inventory & Supply Chain Management:

In an increasingly interconnected, global market, it’s essential for companies to have complete visibility into their supply chains. ERP tools provide valuable insights during every step of the process—from raw material-delivery estimates to warehousing demands for distributors. These insights allow for more efficient planning, reduced costs, and faster response times to unexpected delays and problems.

Financial Management & Tracking:

Every business needs basic accounting tools. But without an ERP system in place, there’s often a disconnect between sales, inventory, and payments. Luckily, ERP solutions provide a vital link between operations and accounting, which makes it much easier to follow transactions throughout every stage of the process.

Manufacturing Resource Planning:

In the manufacturing world, profits never occur by accident. Many manufacturers need the best possible planning tools to help them protect their razor-thin margins. Every unplanned expense or delay caused by assembly line problems or equipment repairs can have severely negative impacts on the bottom line. ERP tools allow managers and executives with powerful resources to avoid these costly headaches altogether.

HR Management:

One of the most overlooked elements of ERP software is its utility as a tool for hiring and human resources. ERPs often include excellent modules for personnel tracking, benefits management, and training. They can also deliver much-needed employee evaluation data, and they can even be useful during the recruiting phase.

Project Management:

Most ERP solutions include a range of scheduling, budgeting, task assignment, and other planning features that are ideal for large-scale project management. With the right integrations and customizations, ERP can easily rival dedicated project-management software, in terms of utility and functionality.

ERP’s Secret Superpower

Even the best ERPs aren’t designed to handle every aspect of business operations. For instance, sales and marketing tend to fall outside the scope of a standard ERP solution. Another example is customer service and support, which has almost no direct relationship to the kinds of data that ERP systems are designed to manage. Instead, these business processes tend to be assigned to dedicated customer relationship management (CRM) solutions.

But ERP solutions can still play well with others. In fact, most ERP software is relatively easy to integrate with other data-driven business solutions, which allows for even greater insights, efficiencies, and cost-reductions. The result is something along the lines of Super-ERP. It’s faster than a speeding purchase order, more powerful than a real-time inventory report, and able to leap sales projections in a single bound!

However, this advancement isn’t all hyperbole.

Consider the benefits of even a basic ERP/CRM integration:

  • The sales team can instantly call up data for an inventory and supply chain during a call with a prospect, which allows them to give precise delivery estimates and real-time price quotes.
  • If there’s a big bump in quarterly sales, CRM can send an alert to the warehousing staff via ERP, which tells them they need to plan space for more inventory.
  • Customer service reps can look up order histories within the CRM, which makes it easier to quickly resolve tickets and keep customers satisfied.
  • Executives and managers can create detailed sales projections, which take product supply levels into account.


This article only scratches the surface of everything a well-designed ERP/CRM integration can do. There are other kinds of integrations that allow you to create a streamlined, automated workflow across your entire business. All you need is a little imagination and the right ERP implementation partner.

To learn more about building the right ERP solutions or about ERP/CRM integrations for your company, contact Faye for a free consultation.

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