What is ERP Software?

Enterprise Resource Planning (ERP) software products, such as ALERE, are unified software systems that help organizations manage their entire business by integrating all their workflows and processes within a single platform. Instead of having separate software for accounting, inventory, manufacturing, planning, and customer management, an ERP system combines all these functions into a single piece of software, utilizing a relational database, which enables information to flow seamlessly between departments. By eliminating disparate systems, an organization can realize notable benefits, such as eliminating data duplication between disparate business programs, providing a means to relate data between system functions, enabling more insightful reporting, and allowing stakeholders to efficiently leverage historical data for decision making.

A typical ERP system contains several core modules that mirror the key functions of most businesses. The financial management module handles accounting, budgeting, and financial reporting. Supply chain management tracks inventory, manages suppliers, and oversees procurement.  Customer relationship management helps track sales leads, customer interactions, and service requests. Manufacturing modules coordinate production planning with a range of work order utilities, BOM management, route management, and schedulers. These modules work together to capture and instantly propagate data within the ERP system, so activities within one facet of the organization automatically update related information throughout the system.

How does ERP software differ from bookkeeping?

The primary difference between ERP systems and traditional bookkeeping software lies in scope and integration. Bookkeeping software focuses primarily on recording financial transactions and generating basic reports, much like a sophisticated digital ledger. ERP systems, by contrast, encompass the entire business operation and create connections between every department. While bookkeeping software might tell you how much inventory you sold last month, an ERP system can predict when you’ll need to reorder, automatically generate purchase orders, track shipments, and analyze which products are most profitable. It’s the difference between keeping financial records and actively managing business operations.

Who should consider an ERP system?

Organizations that should seriously consider implementing an ERP system typically share certain characteristics: they have multiple departments or locations that need to share information, they’re experiencing growing pains from outgrown software systems, or they’re struggling with duplicate data entry and disconnected processes. Manufacturing companies often benefit significantly from implementing an ERP system, as they frequently need to coordinate complex supply chains, production schedules, and inventory processes. Essentially, any organization where employees frequently ask “What’s the status of…” would likely see significant improvements in efficiency and decision-making capabilities with a well-implemented ERP system.