What is ERP?

Što je ERP?


In this article, you will learn various information about ERPs, such as the importance of using them, key features, types of ERP systems, and how to choose the right one ERP system. We will immediately give you information on how to successfully implement ERP, but also what challenges to anticipate and how to successfully overcome them. Also, in this article, we provide you with knowledge about the latest trends and practices related to this system.

What is ERP and why is it important?

Enterprise resource planning (ERP) refers to a category of software that companies use to oversee routine business operations, including financial management, project administration, risk control, compliance, and logistics. ERP software synchronizes the flow of information across an organization's operational procedures, providing a unified and efficient approach to the entire company. By collecting consolidated transaction data from different sources, ERP systems prevent data duplication and ensure data accuracy through a single and reliable source. In the following, we will clarify the concept of ERP and the advantages of using this customizable software.

Key features of the ERP system

1. Integration

ERP's integration capability sets it apart from other software solutions as it offers a range of applications designed for seamless teamwork, enabling comprehensive data analysis, reduced errors and costs, simultaneous use of multiple components, simplified communication and data-driven insights. When everything is in one place, you can increase operational efficiency and productivity.

2. Automation

Another key advantage of ERP is its ability to automate various business operations, thereby eliminating the need for manual data entry in repetitive tasks such as order processing, invoicing, reporting, and more. This automation allows employees to devote their time and effort to more complex tasks while reducing the risk of human error associated with manual data entry.

3. Accounting

ERP systems with accounting capabilities provide efficient tracking, storage and analysis of financial data. Tax and fixed asset management and currency reconciliation are all benefits that ERP offers. These possibilities result in simplified processes and time savings.

4. Data analysis

ERP systems use collected data to identify trends, generate predictions for informed business decisions, and assess task performance. It can collect information from different business functions such as sales, clients and production statistics. It also enables budgeting, demand forecasting, and productivity and efficiency monitoring, providing quick and easy access to key business data.

5. CRM

ERP solutions improve customer relationship management (CRM) by consolidating their data. By collecting contacts, purchase orders and order history in a centralized and easily accessible platform, ERP helps companies monitor customer satisfaction and intervene immediately when needed.

These are just some of the main features that ERP provides, there are many more that can surely benefit your business.

Advantages of using ERP for your business

1. Improved data security

ERP provides the highest level of data security. Its systems use the robust security controls inherent in ERP systems and reinforced by extensive investments in business monitoring, encryption, authentication, and other top-notch security measures.

2. Flexibility

Flexibility is a key characteristic of ERP platforms. ERP provides a variety of customization benefits to fit different business needs, including unique processes and specialized metrics. Although this flexibility can add to the complexity of the system, it is essential for businesses that are continuously evolving. With the ability to adapt to changing workflows and key performance indicators (KPIs), ERP systems can successfully support the flow of your business, without the need for replacement.

3. Scalability

Scalability is an inherent advantage of ERP system implementation. It helps empower your company to achieve better results and greater growth. With ERP, you can access data in real time and thus gain a significant advantage in effective product development. Moreover, you can ensure a smooth and seamless business.

4. Standardized data

The value of ERP lies in the consolidation of information from different departments in one place. This prevents fragmentation of data across multiple applications and spreadsheets while simplifying data retrieval. Furthermore, ERP eliminates duplicate data and inconsistent formats, solving the challenges arising from such decentralized approaches. This system standardizes key data and delivers consistent formats for reporting and analytics. By providing standardized information, you can safely make decisions, save money and time.

5. Cost reduction

Properly used ERP systems offer significant cost savings by preventing outages and delays, while offering tools in a centralized system for streamlined operations. Additionally, by empowering teams with efficient access to information and improved cost visibility, your team will identify cost changes very quickly.

In addition to these already mentioned advantages of using ERP software, there are many others such as increased productivity, organization, improved customer service, etc.

Types of ERP systems and their differences

There are different types of ERP systems - here we will list some of their characteristics and advantages. Once you choose the right ERP for yourself, you will ease your daily business battles and achieve success that will be the envy of everyone.

1. Custom ERP

A custom ERP solution is a software system designed to meet the unique needs and processes of a particular company. With it, you can achieve improved efficiency and flexibility with a personalized and comprehensive approach to managing business processes and integrating various business operations. Unfortunately, this ERP solution often comes with numerous risks that can harm your business.

2. Standardized ERP solution

A standardized ERP solution refers to a software system modeled after industry best practices. It allows you to implement common business processes and thus provides a consistent framework for implementation in various companies. Microsoft Dynamics 365 Business Central is one of the best ERP solutions on the market, which is used worldwide. It is suitable for companies of all sizes and is fully adapted to the market and legal regulations of the Republic of Croatia. You can access it via computer, tablet and even mobile phone, anytime and anywhere. We are sure that you will Business Central achieve all your business goals.

It's up to you to decide now which ERP to choose.

Steps for a successful ERP implementation

1. Set goals

Before implementing an ERP solution, it is crucial to define goals and align them with specific business needs. Consider your company's goals, analyze key performance indicators (KPIs), consider how an ERP system can help you solve existing problems, and thus achieve effective organizational adaptation.

2. Find ERP software that meets all your needs

Choosing the right ERP software is extremely important because not all solutions provide equal benefits. Consider your industry, system requirements, and future expectations to avoid a one-size-fits-all approach. Evaluate whether an on-premises solution or a Cloud solution is right for your business. Seek guidance from an ERP consultant to answer queries and make a final decision.

3. Design

In the design phase, detailed requirements and existing workflow are used to develop an effective design for the new ERP system, which includes improved workflow and business processes. User involvement is essential during this phase to benefit from their insights and ensure acceptance and use of the new system. It is necessary to analyze the shortcomings, to recognize individual intricacies and flaws, and to adjust the ERP software in order to harmonize it with the system. You can present this to a partner or ERP software vendor to identify a potential solution.

4. Software configuration

Once you have completed all the previous steps, the development phase can begin. Software configuration includes tasks such as software configuration and adaptation to align with redesigned processes. Integration with existing business applications can be developed in parallel. Local ERP systems require hardware and software installation. At the same time, the team should create training materials for users and initiate data migration planning.

5. Data migration

Data migration is extremely important in the implementation process. Work with your implementation partner to plan data journey processes, such as pre-migration database cleanup, secure migration, and post-migration data management. Consider manual or automated migration and verbalize your partner's responsibilities. Keep in mind that data migration can be time-consuming, especially if your systems are outdated and disparate. Take this opportunity to get a fresh start by identifying the necessary data and workflows. Proper preparation for the migration process is important to ensure a smooth transition and avoid transferring unnecessary or incorrect data.

6. Testing

Once your chosen ERP system is configured and the migration is largely done, it is essential to continue testing to ensure the software is functioning properly. Because it provides valuable insights into system performance and facilitates a seamless transition, the testing phase is an essential step in ERP implementation.

7. Educate your employees

Once an ERP system has been implemented and tested, it is critical to train your employees to ensure they use the new system efficiently and effectively. Hiring a team of on-site ERP employee training experts will help employees fully understand the software and use it proficiently. Providing more extensive training to the IT team is critical to resolving future technical issues.

8. Your ERP software is ready

During the setup phase, be prepared for possible problems and challenges, as well as for employee adjustments despite prior preparation. The project team should be available to resolve questions and issues, and the implementation partner can help resolve specific issues.

Challenges you face when implementing ERP

1. Maintenance costs

Maintenance costs are key to keeping the ERP system operational after implementation, and should not be ignored. Although an ERP system may seem affordable at first, it is important to carefully consider the long-term maintenance costs. In addition, ensure that the software vendor or partner provides ongoing support to maximize the benefits of the implementation for your organization in the future.

2. Data migration

Data migration is an ongoing process. It should be carefully planned. Companies can choose to implement all ERP modules simultaneously or focus on high-priority ones first, gradually adding other modules later. Migration often takes a lot of time, but after the ERP software has been successfully implemented, you will see that your patience and effort have paid off.

3. Poor planning and project management

Inadequate project management represents a significant risk during ERP implementation. Often, these projects lack adequate resources or organized and rational individuals. Instead of careful oversight by company management, responsibility falls to whoever is available, resulting in limited guidance from the people charged with making key decisions.

Trends shaping the future of ERP systems

1. Cloud ERP software

Cloud ERP software offers cost-effective implementation, automatic software updates and provides seamless collaboration, making it an attractive choice for companies looking for agility, efficiency and modernization in their ERP systems.

2. Internet of Things (IoT)

The Internet of Things (IoT) is a network of interconnected devices that communicate with each other and share data over the Internet. IoT offers companies the opportunity to improve efficiency, gain real-time insights, improve decision-making and enable automation, which increases productivity and competitiveness in today's digital era.

3. Personalization

Cloud ERP platforms have evolved to offer easier customization through platforms with less code, offering the opportunity to adapt the system to specific requirements. In addition, industry-specific ERP solutions are becoming increasingly popular as companies look to provide personalized experiences to customers.

Best practices for ERP system management

Here we will outline the steps for effective project management and to ensure successful ERP implementation project management.

1. Regular data maintenance

Perform routine data maintenance activities such as data cleansing and data validation to ensure the accuracy and integrity of your ERP system data. Regular data maintenance helps prevent problems such as system slowdowns, inaccurate reporting and inefficient processes.

2. Training and support for users

Provide comprehensive training to users of your ERP system, ensuring they have the necessary skills and knowledge to use the system effectively. Offer ongoing support and resources to resolve user questions and concerns as you improve their work and increase the system's potential.

3. Security and access control

Implement robust security measures to protect sensitive data and maintain system integrity. Define user access levels and permissions based on job roles and responsibilities to prevent unauthorized access and mitigate potential risks.

4. Continuous evaluation and improvement

Regularly evaluate the performance and effectiveness of your ERP system through key performance indicators (KPIs) and user feedback. Identify areas for improvement, prioritize improvements and implement necessary changes to optimize system functionality and meet evolving business needs.

How to choose the right ERP system for your company

1. Define your requirements

Clearly define your company's needs and goals, including industry requirements, scalability and integration.

2. Research suppliers

Thoroughly research ERP vendors based on reputation, experience, reviews, and presence in your industry. In this way, you will narrow down the choice of suppliers and find the one that best meets your requirements.

3. Evaluate the fit

Evaluate ERP systems for customization and flexibility to fit your unique processes. Look for the simplest possible adaptability.

4. Consider the costs

Estimate the total cost of ownership, including initial and ongoing costs. Evaluate the long-term return on investment and financial sustainability.

5. Ask for demonstrations

Request demos or trials from shortlisted vendors to test features, usability and compatibility with your processes. Evaluate the functionality, user interface and reporting capabilities.


From our "What is ERP" article, we can conclude that the implementation of an ERP system provides companies with numerous advantages in this modern business jungle, enabling the integration of business processes, data sharing and improved visibility of the state of the company in all departments. Process automation and quick access to data increase employee productivity and facilitate informed decision-making. Despite the challenges of implementing an ERP system, the future lies in trends such as Cloud implementation, Internet of Things (IoT) and personalization. Of course, not everything is so simple because an ERP project requires a comprehensive plan, regular updates, and performance testing and monitoring to ensure the successful use of the ERP system in the future.


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