Enterprise Resource Planning

What is ERP?

What is ERP?

Enterprise Resource Planning helps you:

  • Integrate and synchronize business processes
  • Share real-time insights through a centralized data repository
  • Automate tasks through connected workflows
  • Comply with industry and regulatory standards
  • Expedite customer service and tailor messaging
  • Analyze company financial health across departments

Integrate and synchronize business processes

Enterprise resource planning (ERP) is a method of interweaving various front office and back office departments and workflows.It contains a range of capabilities, and its main purpose is to streamline operations, generate revenue and increase productivity through this connectivity.

For example, with ERP software, users could look at the budgets of different projects to help anticipate the cost of a future project. This reduces the amount of time spent negotiating for a certain spending goal. Another example would be the ability to look at the status of machines in the warehouse, along with the number of unfulfilled orders to measure optimal production speed.

ERP also ensures that everyone in a company is on the same page. If a product is out of stock or has been canceled, the sales staff could see that information in the ERP system and refrain from selling those items. Overall, ERP can help boost efficiency, increase revenue margins and reduce communication errors through the integration of various processes. ERP often includes the following workflows:

Share real-time insights through a centralized data repository

When people talk and write about ERP, the centralization of data and real-time information is one of the most prominently mentioned benefits. Because an ERP system contains data from across a business in one location, users can easily access insights from other areas of a company to inform analyses. This “desiloing” of information leads to more accurate insights and can lead to improved workflows.

For example, if the financial team has data insights on how many projects run over budget as segmented by department, this information could be easily accessed by the departments themselves without the need for the financial team to compile a special report. This increases productivity and information accessibility. In fact, some new data points might even be revealed that weren’t easily available when the information was contained on different computers and siloed by department. Alleviating the burden on other teams to compile statistical documents related to certain business aspects is a key benefit of ERP.

Automate tasks through connected workflows

Automation is a term that gets thrown around by people in the technology sphere all the time, but how can it actually work in a software system? ERP is a great example of a tool that leverages automation at its core. ERP systems are excellent candidates for workflow automation due to their emphasis on operational connectivity. Because these connections are already established, it’s relatively simple to develop automated processes.

Some automated functions might include automatic reordering of materials from a best-price vendor when inventory levels reach a set point. This helps alleviate the number of tasks that are on the plate of your staff members, therefore freeing up time for other duties that they might not have time for otherwise. ERP software often automates and streamlines financial reporting workflows. When sales orders are entered into a system, financial information can be automatically sent to the general ledger to track revenue. This also reduces keying errors and duplicate data entry issues.

Comply with industry and regulatory standards

Legal and industrial compliance are essential facets of a successful business. Many ERP vendors offer products that contain tools to help companies adhere to regulations to save money and time. Specifically, this may include quality management features that flag products that will need to be inspected further to ensure regulatory compliance.

Some vendors also allow quality managers to mark items that don’t pass inspections so that employees can go back to the drawing board and figure out what needs to be changed to meet necessary standards in the future. Here are some of the rules that ERP can help businesses comply with:

  • GAAP
  • IFRS
  • Importer Security Filing (ISF)
  • RoHS
  • Conflict Minerals

Expedite customer service and tailor messaging

Some ERP vendors enable users to optimize the customer experience through targeted messaging and retained sales information. By tracking the conversations that customers have had with sales representatives and the products they’ve purchased, you can improve customer experience by personalizing communications and reducing reiterative messages.

These programs can also store payment information to make the actual purchase process easier for all parties involved in a transaction. Here are some of the specific capabilities you might find in an ERP program’s CRM tool:

  • Contact Management
  • Marketing and Campaign Management
  • Email Integration
  • Pricing and Tracking
  • Salesforce Automation
  • Pricing and Tracking
  • Marketing Resource Management
  • Order Management

Analyze company financial health across departments

Financial tools are the bread and butter of ERP. Without financial data included in your system, ERP operates in a bubble that doesn’t account for actual market conditions and company standing or positioning. It’s a core tenet of ERP that is typically put into a system before any other functionality.

There is a diverse range of financial tools that vendors can include in their programs, so if you decide to purchase an ERP, it’s important to make sure that all of the features you need can be implemented into the system you buy. Here are some of the financial reporting capabilities that help make ERP such a valuable tool:

  • General Ledger
  • Accounts Payable
  • Accounts Receivable
  • Budgeting
  • Bank Reconciliation
  • Invoicing/Billing
  • Support for Multiple Currencies
  • Cash Flow Management
  • Payroll


How Do ERP Systems Work?

ERP systems work by creating a centralized center for various business processes to operate. This system contains data from different workflows and uses this information to automate tasks and generate useful insights. Users can select the tools that they want to have included in their solutions based on their individualized business needs. These programs can be installed through different methods such as in-cloud, on-premise or hybrid deployment, making them an effective option for businesses of a variety of sizes.

How Do I Know I’m Ready for an ERP System?

There are a few key signs that your business might be ready to implement a system. Here are some of the factors that might indicate it’s time to upgrade your operations

  • Manual workarounds for business processes
  • Missed revenue opportunities due to too much on your plate
  • Customers annoyed at ineffective customer service
  • Inability to measure data across the organization
  • Large amount of time spent on tasks that should be simple

What Are the Different Types of ERP?

There a few different types of ERP deployment — on-premise, cloud-based and hybrid. The option that is best for your organization depends on factors such as needed accessibility, current workflows and level of investment. Now let’s go over the basics of these deployment methods so that you can decide which option is best for your business.


On-site deployment is a method of installation where the vendor or one of its partner organizations come to your company and install the software directly on staff computers. On-premise software is available to users when they are using specific devices. One of the key benefits of this deployment method is the ability to use the program when an internet connection isn’t available and an increased level of security because the platform will be hosted on your company’s own servers.

However, the initial investment required to deploy ERP software on-premise is relatively high compared to cloud-based solutions, which can be a dealbreaker for some businesses. The system also might not be available at any time and in any location due to the restrictions of on-site deployment, therefore reducing accessibility.


Cloud-based ERP allows you to access the program from any location and at any time as long as an internet connection is available. Depending on the priorities of your company and your business model, this might sound immediately attractive. The upfront cost of implementing cloud-based ERP is lower than that of an on-premise solution.

However, some businesses don’t like the idea that their information is in the hands of a different company and that it’s ultimately up to the ERP vendor to retain security. However, when considering this argument, it should be noted that cloud ERP is typically a very secure solution and that without proper privacy methods, cloud ERP wouldn’t be sustainable.


A hybrid deployment method is just as it seems — a mix between on-premise and cloud-based deployment strategies. With this method, companies can install core programs on-site while leveraging the cloud for additional features such as the “latest and greatest” add-ons. This helps businesses ensure consistency and reliability through the on-site portion of their package while also gaining flexibility due to the ease of adding new functions to the program.

What Are the Latest and Greatest ERP Technologies?

With the rapid development of new technologies, it makes sense for ERP vendors to follow suit and implement these new tools into their systems. Here are some of the technical abilities you might look for during the ERP selection process.


ERP is uniquely primed for automation due to its centralized business processes. This technology’s main benefit is its ability to increase productivity by reducing manual workflows. Examples of operations that can be automated include sending employees direct deposits for their work, reordering of materials based on set inventory levels and the monitoring of quality assurance to ensure adherence to industry and regulatory standards for items that you produce.

Artificial Intelligence (AI)

AI functionality can help businesses with tasks such as demand planning and forecasting to maximize revenue. This tool can look at historical data and processes to estimate the amount of goods customers will want, and then it can use this information to reduce inventory levels and product spoilage. Additionally, this tool could assist in identifying bottlenecks in the production system so that you can hasten workflows and alleviate any hindrances to your operations.

Internet of Things (IoT)

The internet of things is an extremely useful component when included as part of ERP. This technology is basically the connection of various physical objects through the internet. An example of how this looks in ERP could be through RFID tracking of objects and the monitoring of machine downtime. By connecting these devices to the internet, you can develop insights about them without being in their proximity.

ERP has a storied history. Although Gartner first introduced the term in 1990, it stems from MRP or material requirements planning systems that existed in the 1970s. MRP was focused mainly on manufacturing processes. However, users eventually started requesting integration with other tools such as finances, HR, sales and marketing. Therefore, ERP software was introduced to facilitate operations both in the front and back office. As technology changes, so does ERP. This is why it’s important to stay up-to-date with the latest features by selecting a vendor that leverages new functionality and methodology.

How Do I Select an ERP System?

When selecting an ERP that is right for you, it’s important to keep a few things in mind. You should consider your operational needs, the deployment method you seek to use, the size and industry that your company is in and your budget. These are just a few of the factors that can make or break whether or not a vendor belongs on your selection list.

The process of choosing an ERP can be arduous, which is why we at SelectHub have created an easy-to-use requirements interface to help you find the vendor that best fits your business needs. If you’re not quite ready for that, we’ve got tons of other resources to guide you along the way, whether it be our ERP Requirements Checklist or our list of ERP advantages and disadvantages.

Have a question about which software vendor is right for you? We’d love to help! Reach out to our team for individualized recommendations by messaging [email protected] or via phone at 877-692-2896.

Recent Articles

ERP Research and Reports

Confidence Comes from Data

ERP selection is complex and beset with problems for both IT buyers and solution providers. We do 3 things to make it fast and simple:

FREE Software Selection Platform

Our platform provides best-practices, including requirements templates & vendor comparisons, to help you make the right decisions for your unique needs, in a fraction of the time. Try it FREE.

Aggregated Reviews

We have collected every software review available online, crunched every last word using our proprietary Sentiment Analysis algorithms, all so we can tell you how a software product is viewed in its marketplace, retrospectively.

Professional Analysis

We relentlessly collect and analyze data about software, then compile and share it so every company has the same access to the information. The information we gain is then used in our Software Selection platform to help you find the right software.

Your Guides

Our industry journalists proudly distill the helpful information you read on SelectHub, always on the mission to share what matters so you can make your best decisions independently.

ERP articles are written and edited by:

Mariah Hansen

Lead Editor

As the lead editor at SelectHub, Mariah edits and manages content for more than 40 different software categories, as well as writing for a couple of them herself.

Show More

Madeline Reinbolt

Market Research Analyst

Madeline Reinbolt is a Market Research Analyst at SelectHub. She writes content for Enterprise Resource Planning (ERP), Employee Performance Management and Recruiting.

Show More

Thought Leaders

SelectHub has sought out and invited thought leaders to contribute to our ERP Industry articles and resources. These thought leaders ensure we deliver quality content with the most accurate information, focusing on what matters most. No thought leader is compensated for their contributions, but shares our belief that information should be democratized so everyone can make the best decision.

Laurie McCabe

Co-founder and Partner, SMB Group

Laurie brings more than 25 years of experience in the IT industry to her current role as Cofounder & Partner, SMB Group. Laurie has built widespread recognition for her insights in the small and medium business (SMB) technology market.

Show More

Lisa Anderson

Founder and President, LMA Consulting Group

Lisa Anderson is the founder and president of LMA Consulting Group, a consulting firm that specializes in manufacturing strategy, end-to-end supply chain transformation and technology adoption that maximizes the customer experience and enables profitable, scalable, dramatic business growth.

Show More

Eric Kimberling

CEO, Third Stage Consulting

Eric Kimberling is one of the most recognized and respected independent ERP systems experts in the world, giving unbiased advice to clients for over 20 years.

Show More

Ed Cowsar

CEO, OspreyData

Ed’s more than 30 years of leadership and success in a variety of industries includes a unique combination of expertise and experience with product design, sales, engineering, operations, change management and innovation for technology and services firms, as well as highly-regulated industries.

Show More

David Haimes

Senior Director, ERP Cloud Development

David Haimes is a senior director in the Oracle Cloud Applications Research and Development Organization, focusing on next-generation functional and technical architecture.

Show More

David Dozer

CTO, Blaze IT

David Dozer is a business consulting and IT specialist with more than 15 years of experience in the enterprise software realm.

Show More

Shelly Gore

ERP Architect, A Bigger View

Shelly Gore is CEO and co-founder of A Bigger View. For over 25 years, she successfully designed and implemented complex IT and Cloud-Based ERP systems for corporations in North America and Europe.

Show More

Grady Brett Beaubouef

Business Value Realization Director, Oracle

Grady Brett Beaubouef is an ERP expert with 20 years of industry experience. He works as a Business Value Realization Director at Oracle

Show More

Harsha Sarjapur

Co-founder, InfoSourcing

Harsha Sarjapur is the co-founder of InfoSourcing Inc., an ERP solution provider that assists businesses of all sizes with the implementation of ERP solutions. He has worked in the ERP industry for the last 20 years.

Show More

Erik Kiser

CEO, Orderful

At 25 Erik started a consulting firm focused on writing EDI and B2B integrations for manufacturers. Through scaling the company he realized that there is a great opportunity to improve business for the manufacturers by providing a software hub approach.

Show More

Chuck Langenhop

Senior Director, CFO Advisory Services

Chuck Langenhop is Senior Director with CFO Advisory Services in Richardson, Texas. His experience includes change management, process reengineering, ERP selection and implementation, and financial planning &

Show More

ERP Functions and Software Requirements List

There’s definitely a lot of buzz surrounding ERP software these days. You might’ve heard it’s a necessary tool to stay competitive in today’s market. Or, you’ve heard how efficient it can make your business operations. But first, let’s start with something simpler. Enterprise resource planning (ERP) software is a business solution that integrates all your applications and manages your resources. So what can an ERP software do specifically? To answer that question, we need to understand the basic ERP functions.

Madeline ReinboltERP Functions and Software Requirements List
read more

What is ERP and How Does It Work? Meaning, History, Features and More

There’s a large number of available software solutions on the market for a wide range of processes. Whatever your business is, there’s likely already a software solution out there that meets the specific demands of your industry. One solution that companies of all sizes tend to purchase is ERP software. ERP stands for enterprise resource planning. But what exactly does this term mean, and how doos an ERP system work? We’re glad you asked. Read on to learn what is ERP and how it works, basic features of the software, installation and implementation, featuring insights from industry thought leaders.

Madeline ReinboltWhat is ERP and How Does It Work? Meaning, History, Features and More
read more

The Best Online Accounting Software: Top Systems for 2020

No comments
Browsing for the best accounting software that matches your accounting preferences is similar to walking into a bakery and looking for the perfect donut. There are so many varieties and flavors to choose from that you get overwhelmed. We can relate to that. Nevertheless, have you ever considered investing in an online accounting system? You can thank your lucky stars because our handy-dandy research team has dedicated time to searching for and finding the best online accounting software to compile a list of the top choices for small and mid-size business for the coming year.

Khaleel HayesThe Best Online Accounting Software: Top Systems for 2020
read more

ERP Software Selection Process and Criteria

A good enterprise resource planning (ERP) system should have an impact on every single part of your business. These highly sought after enterprise applications help manage activities including planning, research and development, purchasing, supply chain management, sales, and marketing. There are countless ERP software solutions available, so it’s crucial that you make the right ERP choice that fits your organization. But do you know what the ERP selection process looks like?

Madeline ReinboltERP Software Selection Process and Criteria
read more

Best Machine Shop Management Software for 2020

No comments
Choosing new manufacturing software is as difficult as browsing for a new book at a bookstore. There are so many genres of solutions with a plethora of accessories that stretch as far as the eye can see, leaving you in a state of overwhelming wonder because you don’t know which solutions and features are best for your practices. It’s totally understandable. Have you considered machine shop software, or software designed specifically for machine shops to streamline your machinery and production? You’ve come to the right article.

Khaleel HayesBest Machine Shop Management Software for 2020
read more

SME Software: The Best Accounting Software for SMEs

Imagine what would happen to your business if you woke up one day, started running through your balance sheet and discovered huge discrepancies. (Houston, we have a problem.) Accounting is a fundamental part of running a successful business and accounting software for SMEs – small and medium-sized enterprises – can often mean the difference between business bang or bust. Use the right accounting SME software and everything runs like a well-oiled machine. Choose the wrong one, and you’ll break the bank – literally.

Khaleel HayesSME Software: The Best Accounting Software for SMEs
read more

Budgeting Software: Our Picks for the Top Solutions in 2020

No comments
Shopping for new accounting software is like shopping for a new refrigerator. These applications come with a boatload of functions that make you scratch your head about whether or not you need them. We get it. Have you ever considered purchasing budgeting software? A solution that streamlines budgeting practices, manages the revenue you earn and offers thorough analyses of your financial information to make thoughtful business decisions. Kudos to our handy-dandy research team because we have a top-notch list of the best budgeting software around.

Khaleel HayesBudgeting Software: Our Picks for the Top Solutions in 2020
read more

Best Cloud ERP Software Solutions: Which Systems Win for 2020?

In this year and beyond, the factors that drive organizations to compare cloud ERP software solutions often begin with a few strong focuses. In particular, product quality, production and process monitoring, an increased use of analytics and business intelligence (BI) applications and the need for greater mobility are becoming necessities for companies adopting new ERP software (enterprise resource planning).

Madeline ReinboltBest Cloud ERP Software Solutions: Which Systems Win for 2020?
read more

The Best Business Management Software in 2020

No comments
Are you a small to medium-sized business that’s sick of managing operations on pen and paper? Do you desire to simplify your processes, improve communication and increase customer satisfaction? That last point can be quite the feat for a business operating the old-fashion way — the modern consumer typically expects an omnichannel experience that allows them to access your services with their smartphone – for example, to schedule appointments or make payments. If this is painting a familiar picture for you, we invite you to consider business software solutions that can help manage these expectations while simultaneously lightening your own workload: ERP software.

Madeline ReinboltThe Best Business Management Software in 2020
read more

ERP Market Share and Trends in 2020 and Beyond

The ERP software market has been around for over 40 years and is still thriving today. By constantly leveraging technological developments and providing opportunities for business innovation, the ERP market has grown alongside the industries that it serves for decades — and is projected to continue this pattern. This article analyzes the ERP market in 2020 and beyond, including a list of the software vendors that are dominating the ERP market share today.

Madeline ReinboltERP Market Share and Trends in 2020 and Beyond
read more

Benefits of ERP: Advantages and Disadvantages of an Enterprise Resource Planning System

Deciding which technologies your businesses should and shouldn’t invest in is difficult, to say the least. On the one hand, you want to be the one responsible for innovation and growth within your company. But you also don’t want to be the one to pull the trigger on a failed project. So, is an ERP software investment worth the risk? To find out, you need to weigh the benefits of ERP, specifically how ERP system advantages and disadvantages breakdown when compared against each other.

Madeline ReinboltBenefits of ERP: Advantages and Disadvantages of an Enterprise Resource Planning System
read more

Process Manufacturing ERP Software Market Guide

Although the manufacturing industry employs a smaller percentage of Americans than it did 50 years ago, there are still sectors that are thriving and experiencing substantial growth. Most of these companies fall within the process manufacturing sphere. Process manufacturing refers to the processing and the combination of raw materials and ingredients to create finished products. To deal with the specific challenges in this field, many businesses turn to process manufacturing ERP software.

Already know that your business needs process manufacturing software and looking for the top available solutions? Click here to go straight to our list of the best options on the market now.

Khaleel HayesProcess Manufacturing ERP Software Market Guide
read more

The Best Open Source ERP Software Systems for 2020

No comments
Enterprise Resource Planning software (ERP) is a suite of applications that manage the wide range of business processes at an organization. An ERP system is a large investment of time and money that ultimately keeps your business up and running. Therefore, committing to a software vendor can feel like a leap of faith, relinquishment of control or even a financial impossibility. Or maybe a pre-packaged solution just feels too confining for your unique, growing business. If these scenarios sound familiar, we invite you to consider an alternative: open source ERP.

Madeline ReinboltThe Best Open Source ERP Software Systems for 2020
read more

The Best Free Accounting Software For 2020

No comments
Shopping for the right accounting software is like shopping for a new suit. You want a solution that’s uniquely tailored for you and your firm’s needs. This may sound like an ancient treasure hidden in a pyramid, but free accounting software exists and they possess tools to enhance your bookkeeping practices with automatic processing, reporting, invoicing and more. Thanks to SelectHub’s top-notch research team, we’ve developed a complete list of free accounting tools.

Khaleel HayesThe Best Free Accounting Software For 2020
read more

ERP Requirements Template and Checklist

It’s very common for software buyers to spend too little time gathering their ERP requirements. Understandably, many buyers focus more on how their current processes will transfer over into the new system. However, selecting ERP software is a more complex task than a replacement for pen and paper. It’s quite transformative when properly executed, but the only way to do that is to think about that transformation from the beginning, with effective requirements gathering practices and our helpful ERP requirements template.

Madeline ReinboltERP Requirements Template and Checklist
read more

Billing and Invoice Software: An Elaborate List of The Best Solutions

No comments
Whether your company is an enterprise or a local mom-and-pop shop, keeping up with bills and invoices should be one of your top priorities next to keeping your customers satisfied and delivering top-notch products or services. Our research team has composed a comprehensive list of the best billing and invoicing software to simplify your enterprise accounting software needs. Before we proceed to our list, it’s important to know some of the recommended features that come with this software.

Khaleel HayesBilling and Invoice Software: An Elaborate List of The Best Solutions
read more

Accounting Automation: Understand How It Optimizes Your Business

No comments

The accounting industry is updating its business practices to enhance productivity and remain relevant among their competitors and clientele. One upgrade the accounting industry is implementing is automation. Accounting automation is an accounting solution that utilizes artificial intelligence (AI) to maintain repetitive bookkeeping duties such as data entry and analyzing crucial documents.

Khaleel HayesAccounting Automation: Understand How It Optimizes Your Business
read more

Top ERP System Examples

No comments

Enterprise resource planning software (ERP) is made up of tools intended to facilitate the management of all information that impacts a company’s business decisions. Depending on your company’s niche, you’ll benefit from different functionality available in ERP software. Manufacturing companies have different needs than consulting firms. Businesses that focus on retail require distinct capabilities than those in the financial sector. This article can help you learn more about what functionality is available in different ERP examples and evaluate which might be best for your corporation.

Madeline ReinboltTop ERP System Examples
read more

The Best Production Planning Software in 2020

No comments
Winter is gone and spring is blossoming fresh trees and flowers. Don’t you think it’s time your business did the same? An effective manufacturing ERP system or production planning software may be what you need to cultivate and grow productivity.

Facilities use production planning to ensure raw materials, employees and other necessary items are ready to create finished products within their scheduled timeframe.

Khaleel HayesThe Best Production Planning Software in 2020
read more

What’s the Best Way to Implement ERP Software?

No comments

Enterprise resource planning (ERP) implementation: requires more planning and budgeting than for a wedding. And just like marriage, without proper preparation and planning, it often ends in failure. Whether you’re an ERP software veteran upgrading your current system or a newcomer in the world of ERP implementations, it’s no question that the process is intense. Fear not — this article walks you through the ins and outs of implementation, including steps to take, how to avoid failure and insights from industry thought leaders.

Madeline ReinboltWhat’s the Best Way to Implement ERP Software?
read more