January 16, 2020

What is an ERP System and How Can It Benefit Your Business


Enterprise Resource Planning (ERP) systems are suites of customizable applications that integrate business data and thus improve process management. ERPs help executives to manage key operations across departments such as accounting, procurement, HR, CRM, risk management and compliance, supply chain operations, and more.

Running a company without an ERP system is akin to navigating a ship through stormy waters without the aid of a compass. It’s not a mandatory piece of equipment, but chances of making progress increase exponentially if you have one by your side.

How does ERP work?

Typically, enterprises are organized as decentralized and siloed systems. Each business unit carries the load for its local data maintenance. However, when other units require the same data for their specific needs, accessing it becomes unnecessarily cumbersome. The inefficiency of the process reflects in delays, inconsistencies, and duplication of data.

The key value of an ERP system is a shared, centralized database that serves as a hub for the entire enterprise. 

The purpose of ERP software is to provide a comprehensive, 360-degree view of the ins and outs of your business. After deploying an ERP system, each business unit remains accountable for local data maintenance, but with one fundamental difference—there is a single system of record open to all. Staff can pull data and reports from one source, resulting in making more informed and timely decisions. In fact, 95% of companies reported an improvement in processes following an ERP deployment. The optimization of internal processes culminates in multiple benefits—from a decrease in data maintenance costs to improved customer service.

Cloud ERP vs. on-premise ERP

There are two popular types of ERP systems to choose from: on-premise and cloud applications.

Opting for on-premise software entails purchasing a suite and installing it locally, on servers and computers in a company. As such, it offers more control of the deployment process. However, this type of platform requires a more substantial investment upfront and is more high-maintenance for the organization.

Cloud ERP, on the other hand, hosts all data off-site and is, thus, considered to be more stable and secure. Comparatively speaking, the maintenance costs are lower, but since most cloud-based solutions are subscription-based, the expenses can add up over time. Still, SaaS and cloud-based ERP platforms have been prevalent on the market—in 2018, they boasted a whopping 85% adoption rate compared to on-premise platforms.

Clearly, deciding between a cloud-based or an on-premise solution shouldn’t be based on the cost alone. Understanding the long-term impact and indirect expenses (hosting, maintenance, updates, security) is the key to making the right choice. It comes down to whether the solution in question answers your company’s pain points, if it’s in line with your planned budget, and whether your team has the bandwidth to deploy and support the platform.

two women collaborating in an office

The state of the ERP market

According to the Panorama Consulting 2018 ERP report, ERP adoption is not uniform across industries. At 43%, manufacturing holds the lion’s share of the current market. This comes as no surprise as ERP systems were initially tailored to fit manufacturing and supply chain processes.

Here is the complete overview of ERP deployment by industry:

  • Manufacturing (43%)
  • Retail & Distribution (11%)
  • Finance, Insurance & Realty (11%)
  • Information Technology (10%)
  • Professional Services (6%)
  • Non-Profit (5%)
  • Construction (3%)
  • Healthcare (3%)
  • Education (3%)
  • Other (3%)
  • Telecommunications (2%)

Global trends in the IT sector show that the ERP software market will continue to grow. Fior Markets forecast that by 2025, the global market will reach the $61.69 billion mark. The same source estimates that the manufacturing sector will hold one quarter of the market share (24.37%), due to improvements in efficiency and increased adoption.

How does Humanity fit the ERP landscape?

As a specialized platform for employee scheduling, Humanity is a complementary solution to most ERP systems. It is tightly integrated with existing enterprise resource planning systems, so there is no need for double data entry or cross-referencing dispersed data sources. Moreover, Humanity’s features are robust enough to fit the needs of a large workforce, and yet flexible enough to accommodate varying scheduling needs.

One of Humanity’s most formidable partners is Workday, which blends finance, HR, and planning into a single seamless cloud ERP system. Deployable for both midsize organizations and enterprises, Workday provides deep insight into your business and grants the aptitude to adapt to change. Together with Humanity, Workday ensures the agility necessary to handle the demands of the business—employee scheduling included.

For enterprises, the most significant benefit of this partnership is a single system of record for employee data. Thanks to two-way integration, managers can easily assign shifts to thousands of employees, with their skills and availability accounted for. This dramatically reduces the risk of conflicts, understaffing, and absenteeism. Simultaneously, more efficient shift scheduling is also making a dent in labor costs, due to savings in overtime and compliance-related expenses.

Humanity also integrates with other similar platforms, providing a versatile and flexible employee scheduling platform for enterprises that rely on ERP systems.

Primary business benefits of an ERP system

Deployment of an enterprise resource planning application can be valuable for all business types and models. Data collection, process optimization, automation of routine tasks—these are only some of the universal advantages from which any company would profit, regardless of its size or industry.

Unified data with a single source of truth

The main selling point of ERP is, as we’ve established, data integration. It can even be said that other benefits of this enterprise investment stem from having a single source of truth that provides a clear line of sight across all departments.

Having a single data hub eliminates disconnected systems within the organization. Individual employees or teams no longer have to maintain separate documentation or use standalone applications to manage operations. Instead of going back and forth to obtain information or converting data to a usable format, managers can focus on analysis and decision-making.

With ERP, all data is compiled, stored, and shared through a single system, minimizing concerns about how up-to-date, accurate or complete the data files are. Information is entered once and immediately available to relevant stakeholders. No duplicate entries, no cross-referencing, no problems

Streamlined processes and operations

ERP helps employees navigate complex processes by securing a systematic and uniform flow of business data. Furthermore, ERP can completely automate the most repetitive processes, such as replying to customer emails, reporting, routine billing, approval management, etc. This helps to reduce human error, save time, and allow your staff members to focus on what matters vs. menial tasks.

However, to reap the rewards of ERP software, companies need to reimagine and reengineer their existing processes. Sticking with antiquated procedures will annul the positive impact of deploying an ERP system and can even lead executives to second guess this investment. Moreover, employees on the frontlines get mixed messages about how to proceed with their everyday tasks and fail to stay on top of things. Only by committing to ERP processes that have been tested and proven effective, can businesses really notice the benefits of this type of platform.

That said, deployment of an ERP system must include user onboarding and an adoption framework. Employees shouldn’t be held captive by complicated and meandering user flows—in fact, they should be taken into consideration long before platform deployment. Executives have to carefully inspect whether their preferred ERP platform is user-friendly and to thoroughly plan how to prepare their staff for this change. Otherwise, employees will quickly resort to “the old ways” if they are unable to see how ERP is helping their productivity.

Top-of-the-line data security

One of the biggest benefits—as well as priorities—of an ERP system is data security. It maintains a high level of data security by substituting interdepartmental merging of data with a single input system.

While on-premise solutions have a great track record in terms of data safety, cloud-based ERP systems have an additional layer of security. They employ round-the-clock specialists to ensure the data is protected, which makes their servers a more formidable target for cyber attacks. Moreover, both on-premise and cloud ERP systems have backups of critical and sensitive information.

Critical business data is also secured on the local level. The fact that an ERP platform is a central hub for the entire organization doesn’t automatically give the same level of privilege to all staff members. With advanced user-permission settings, managers can protect sensitive data and ensure that employees only get access to information they may need in their work.

woman explaining using a notepad

Superior planning and reporting

With the help of ERP software, managers acquire a deeper level of analytical insight into the operations of their organization. By observing processes through a single system, they can quickly identify bottlenecks and establish more efficient procedures. Of course, they can also recognize operational strengths more clearly thus helping them to gain a clearer picture of where the organization is and in which direction it’s headed.

Moreover, powerful ERP solutions make it effortless to pull reports with relevant and timely business information. This is critical not only in terms of analytics, but for regulatory compliance. Without a clean record of financial or inventory data, executives put their businesses at risk and often have to scramble at the last minute to complete government-mandated reports.

Improved customer satisfaction

Albeit indirectly, your clients will feel the impact of ERP deployment. Once you enhance your organization’s speed and accuracy, customer satisfaction will improve by a wide margin. In 2018, customer satisfaction increased to 68% on average following an ERP deployment.

Because all client information is centralized and processes are streamlined, your team can focus on building customer relationships and improving customer retention. With all relevant data readily available, support teams can cut down on response time without compromising the quality of service.

Additionally, having better relationships with customers means your teams can dissect marketing efforts and craft new acquisition strategies based on direct insights from the people using your services.

Improved collaboration amongst teams

Managing a siloed company, in which each department functions separately from the other, is a highly inefficient way of doing business. ERP systems eliminate the lack of collaboration through transparency.

Once deployed, an ERP takes on the role of a comprehensive database where information from each team is funneled into a single centralized hub. Given that the data stored in an ERP application is both centralized and consistent, departments can seamlessly cooperate and share information instead of shifting responsibility and duplicating the administrative workload.

This promotes a strong culture of collaboration within the organization and helps employees see the company’s big picture.

ERP systems enable companies, no guesswork here

The new world of business requires new ways of working—quicker, smarter, and more agile than ever before. ERP applications fit this bill perfectly.

No matter the industry, the deployment of an ERP system helps managers make better business decisions based on metrics, not hunches or past experience. This makes ERP applications indispensable in the modern business landscape.

By unifying your wealth of knowledge and treating it as an asset rather than just another tool, ERP enables you to amplify the results of your business. Deploying an ERP can be the turning point for your company, so investing in one should be a serious consideration for any forward-thinking organization.