5 Benefits of ERP Software

Mark Canes

ERP software is designed to manage all aspects of a company’s operations, and includes tools for inventory management, order entry and processing, accounting, warehouse management and more.  ERP stands for Enterprise Resource Planning and is typically categorized as a Tier 2 software system.  This means that a true ERP system is best for companies who have outgrown their existing introductory systems, and are looking for a solution that can scale with their company growth.  It also means that the price tag associated with an ERP solution can sometimes cause a bit of sticker shock.  However, once you compare the benefits and opportunities of using a fully-integrated solution, the value of such a system becomes very clear.  Below we have further outlined 5 benefits of ERP.

Improved Customer Service

One of the inherent benefits of ERP software is that all information is stored in a single database, which helps streamline operations across multiple departments. This makes it easy for any given employee with the right user permissions to quickly look up inventory, customer, or sales information in order to make informed decisions.  This data is especially useful when speaking directly with customers and for those who work in customer service. When clients phone in with questions surrounding what available credit they have on their account, how much they owe, their purchase history or a need to update their contact details, this information is all readily available at the click of a couple of buttons.  This eliminates the need for searching through multiple systems and in some cases, the need to search through hard copy files.  To further simplify processes, reports with the above information can be automatically generated and sent out to customers on a regular basis - for example a report that outlines overdue accounts.  Other features such as the ability to track communication, set next action dates, assign sales reps, and create notes, means that information about your customers and potential customers is easily accessible within one system. In many businesses, this leads directly to increased sales.

Cost Reductions

Properly implemented ERP should result in cost reductions across multiple areas of your business. This is especially apparent in businesses with many manual processes and those moving off of introductory and disparate systems.  On the inventory side of the business, proper inventory management increases the accuracy of shipping processes which reduces the costs of dealing with returned merchandise, lost inventory and customer service costs. It also provides tools for accurately predicting your customers' buying patterns, which reduces the costs of holding inventory and decreases dead stock.  On the accounting side, automating processes such as accounts receivable collection (by sending out reports to customers) reduces the amount of time and costs associated with manual approaches.  An all-in-one solution means data only has to be entered into the system once, by one employee.  This eliminates the costs of manually entering data into multiple systems and the associated keying errors.  Another area of cost savings can be gained from choosing to implement the software as a cloud solution, which results in lower IT maintenance costs and eliminates the need for expensive server hardware.


As a fully integrated, all-in-one solution, ERP software makes it easy to extract information from the system for real-time insight into business health.  Information that is stored in the system can be pulled into reports that can then be automatically sent to the appropriate stakeholders.  Advanced reporting provides information to the management and sales teams in order to make quick decisions and evaluate areas of opportunity. Software that provides users the tools to create their own custom reports gives companies even more flexibility.

Increased Automation

ERP software can also be easily connected to other business systems for better automation.  Although ERP software helps eliminate the need for multiple systems, companies may still wish to integrate the system with other existing solutions.  The difference with ERP software is that this integration is often executed in real-time with a two-way connection which increases the automation of processes, and eliminates issues with managing multiple stand-alone solutions.  Examples include ERP that is fully integrated with an online eCommerce store in order to share inventory and order information.  Other areas of increased automation stem from the ability to set parameters and generate reports in the system that automatically change statuses and fields based on certain criteria. The overall result is usually the ability to do more with fewer (costly) resources.

Growth Opportunities

ERP allows your business to pro-actively plan for the future and business growth.  Although introductory systems such as QuickBooks are perfect for small businesses, as your business grows and order volume increases, it will soon become clear that more advanced features are the ticket to continued company growth.  True mid-market ERP systems will provide additional functionality for virtually unlimited database size and transaction volume, meaning your business will be able to continue using the software even as growth increases overtime. ERP systems also provide functionality for multi-currency, multi-company and multi-warehouse in order to expand the business and serve more markets.  In addition, many ERP systems provide advanced features for specific industries such as: lot tracking, landed cost tracking, eCommerce integration, barcode scanning, POS and many more.

What is ERP?