What is ERP? How to choose and implement a suitable ERP system?

Growing businesses ultimately reach a point where spreadsheets are no longer adequate. That’s where enterprise resource planning software comes in: ERP systems gather and organize critical business data, allowing firms to operate lean, efficient operations even as they grow.

Many business professionals have known about ERP, however, they may not fully comprehend what enterprise resource planning solutions can achieve for their organizations. This blog will fully explain what ERP is, how it works, what it can do for your organization, and how to select the best system.

What is ERP?

What is an ERP system and how does it work?

An ERP system works by reducing the number of resources required to manage a firm properly while yet maintaining profitability and growth. The ERP system differs from a single application in that it allows your company’s other enterprise modules to share a single database.

The system gathers information from many aspects of the company. It centralizes the data so that employees who require it may access it. It breaks down the silos that plague many firms and ensures that appropriate information is available to those who want it.

Almost every ERP system is nearly completely automated. It conducts the data input in the backend for you and exchanges the information with other units that require it.

For example, when a shipping order is placed for the final item in stock, the inventory management modules must record this information and notify the appropriate departments so that the inventory may be replaced. The sales staff will also be notified so that it does not make promises it cannot keep.

Outstanding benefits of an ERP

Cost savings

Streamline workflow

Reporting and analytics

Data security

Reduce risk

Enhance Collaboration



Manage External relationship

3 Types of ERP Systems




Must-have modules of an ERP system

  • Financial management: This module covers all aspects of financial management, including budgeting, accounting, and financial reporting.
  • Human resources management: This module helps organizations to manage employee records, payroll, and benefits.
  • Sales and marketing: This module aids in the management of customer data, sales processes, and marketing campaigns.
  • Supply chain management: This module helps organizations to manage their supply chains, from procurement to delivery.
  • Manufacturing: This module helps organizations to manage production processes and inventory.

Enterprise resource planning modules can be customized to meet the specific needs of a business. In addition, many ERP vendors offer add-on modules that provide additional functionality. For example, a company may need a financial reporting module that is not included in the standard ERP system. In these cases, the vendor will likely have a partner that can provide the required module.

ERP systems are an important part of business operations, and the modules listed above are some of the most commonly used. When selecting an ERP system, it is important to consider the needs of the organization and ensure that the system has the required modules.

Fundamental features of ERP systems

Some of the most common features of ERP systems include:

  • Centralized database: As mentioned above, one of the key features of ERP systems is their centralized database. This allows businesses to store all of their data in one place, making it easier to access and manage. Additionally, it can help businesses avoid duplication of data and ensure accuracy of information.
  • Process automation: ERP systems often include tools that automate business processes, such as order management, invoicing, and shipping. This can help businesses save time and improve efficiency.
  • Reporting tools: ERP systems come with a variety of reporting tools that allow businesses to track their performance. This can help businesses make informed decisions about their operations and identify areas for improvement.

ERP examples in different industries



Banking and financial services



Transport and logistics

Food and beverage

Government and public sector

Choose ERP systems based on business size

Small business

Medium-sized businesses

Large businesses

ERP system implementation

Stages of ERP Implementation

1. Planning

2. Implementation

3. Testing

4. Deployment/ Rollout


An effective plan properly ensures the success of the project. During this phase, you will develop a clear understanding of your business needs and objectives. You will also need to select the right ERP system for your organization and put together a team of experts to help with the implementation.


This stage can be broken down into several sub-stages, including system setup, data migration, and testing. It’s important to take your time and make sure everything is done correctly so that the system works properly and meets your needs.


This stage is vital to ensure that the ERP system is functioning as expected. This stage typically includes user and system testing, and regression testing to make sure that no previous problems have been created by the new system.

Deployment/ Rollout

After testing to ensure that your ERP system doesn’t have any mistakes, the technical team will go live with your system. During this stage, you will need to provide training for your employees and make any necessary changes to your business processes. You will also need to ensure that the system is functioning properly and meeting your needs.

Cost of ERP system

The cost of ERP system implementation can vary depending on a number of factors. Some of the main factors that can impact the cost of ERP system implementation include:

  • Size and complexity of the organization
  • Scope of the project
  • Functionality required
  • Number of users involved
  • Geographical location
  • Provider chosen
  • Duration of the project

The cost of ERP system implementation can also vary depending on whether the organization is implementing the system in-house or outsourcing the project to a third-party provider. In-house implementations are typically more expensive, as the organization will need to purchase and configure the hardware and software and hire and train staff to use the system. Outsourcing the project to a third-party provider can reduce costs, as the provider will typically have experience with ERP system implementations and can offer a more efficient and cost-effective solution.


When considering the use of ERP system implementation, it is important to consider the long-term benefits of the system. ERP systems can improve organizational efficiency, help to optimize business processes, and provide a single source of truth for data. The benefits of an ERP system often outweigh the costs of implementation, making it a worthwhile investment for organizations.

If you are considering choosing an appropriate ERP system, just connect to Magenest. As a digital transformation expert having seasoned experience in ERP implementation and corporate with famous partners, namely Odoo and Adobe, Magenest will give you the ultimate solution for your company. Let’s contact our team to have more beneficial information!

Source: https://magenest.com/en/what-is-erp/

Magenest OneStop Solution



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Magenest JSC

Magenest JSC is a full-scale digital solution provider with a special focus on eCommerce, ERP, CRM, Cloud Infrastructure… Website: https://magenest.com/