For those in the industry, the answer is obvious, but many software buyers are not familiar with industry jargon and the various classes of software available. So I thought I would take a moment to address the basics: what exactly is ERP software?
ERP is an abbreviation for Enterprise Resource Planning software. ERP software is designed to be a "one-stop-shop" for an organization's software needs. Whereas an accounting software solution would only comprise accounting functionality, an ERP software system would accomplish a variety of tasks across an organization such as:
- Inventory Management
- Customer Relationship Management (CRM)
- Sales and Service
- Order Entry and Processing
- and more!
ERP systems are characterized by the following:
- The system runs on a single database
- The system shares information across business departments
- Information is available in real-time
- The system and installation is elaborate
The main benefit of ERP software is that you get one system that takes care of all of your business needs. Instead of relying on multiple standalone, systems to integrate with each other, you get a single point of entry to manage all of your processes. This allows for better reporting, information management and accuracy with accounting, inventory etc.
ERP Software can be deployed "on-premises" or "in the cloud" with some vendors offering both methods as options. However, many vendors today only offer cloud-based solutions and for SMBs, cloud-based software is the obvious choice.
For more information on the differences between these types of systems read our SaaS (Cloud) vs. On-Premises Whitepaper.