Why ERP Systems Are Important For Your Business in 2021

Last Updated: June 7th, 2021
Researched and Written by: Russ Davidson

As of 2018, the ERP software market was valued at $35.81 billion. Statista reports this number may be closer to $40.5 billion by 2025–a growth of 13.6% annually. This year by year rise is proof of today’s digital transformation, where businesses are looking for any technological advantage over their competitors. Today, companies can’t afford to skip out on the automation, integration, and efficiencies offered by a fully integrated ERP system.

Enterprise resource planning software is an integrated suite of business applications designed to automate the back-office functions of your organization, including financials, sales, and operations. In other words, ERP is a unified solution that manages company operations across every department, whether it’s raw materials for manufacturing or staffing hours for human resources.

Read More: What is ERP and How Do ERP Systems Work?

If you’re looking to implement an ERP or even upgrade your existing system, it’s important to understand the benefits of ERP first and foremost. This can help provide you with the real-time visibility into what your business needs, what you can afford, and what you can realistically implement into your environment.

Looking for an ERP system for your organization? Check out our list of the best ERP software. Or get free help from one of our software advisors.

Why Is ERP Important?

ERP solutions allow organizations to streamline and automate their processes, which can lead to higher accuracy in your order taking and more efficiency in your overall operations. The importance of ERP comes from the complete visibility ERP provides–meaning your resources will be tracked and reported on to determine which areas of your business operation are falling short. This means you’ll have an information system working for you–without needing to expand your IT staff.

How is this possible? ERP software makes your business functions more agile. With an ever-shifting market, customers’ needs are always changing. Being able to implement software on a modular basis (in order to handle current needs immediately and plan for future needs later) is known as a phased rollout–flexibility many ERP systems offer.

Whether you’re a small business owner just starting out, or a capable enterprise looking to fine-tune your business processes, your business can benefit from an ERP software. You may notice business picking up or your customer base expanding, which leads to an increase in work volume, hiring more people, and developing a broader range of products. This complexity may overwhelm a business that is unprepared, meaning you’ll need to be pragmatic at rolling out your ERP system as to not hinder your business.

A few more reasons why a business may look to purchase ERP software:

  • To improve business performance
  • To position the company for growth
  • To reduce working capital
  • To better serve customers
SAP Business One Cash flow
SAP Business One is an example of a popular ERP software.

What Are The Uses of ERP?

ERP solutions can be customized based on the industry you’re in or on the primary features you’re in need of. Some software will be developed with a specific industry or set of functionalities in mind. Others will be more generic and require an ERP vendor who has experience inserting the solution into your environment.


Financial management capabilities are at the forefront of an ERP implementation. Modules such as accounts payable, accounts receivable, and a general ledger will help track revenue and expenses. This may also include payroll for your organization.

Acumatica ERP Software Cash Account Transactions
View your cash account transactions in Acumatica.

Customer Relationship Management

CRM software is often sold on its own, but ERP software can offer many capabilities to aid in customer relations. These key applications support the sales and marketing staff and address the needs for contact management, tracking conversation history, managing leads, reviewing order histories, and creating quotes.

Dynamics 365 Business Central Customer Management
Dynamics 365 Business Central replaced the old Microsoft Dynamics CRM and has strong customer management capabilities.

Human Resources

ERP software will also control the workforce of your organization via human capital management features. The management of your new and current employees will aid in your hiring process and maintaining good relationships with your staff. This includes employee onboarding, time and attendance tracking, and benefits management.

Workday Briefing BOok
View a briefing book on each employee in Workday.

Inventory Management

An inventory management module within an ERP system will help track all information about the items that your company builds, buys, stores, or sells. Inventory management software simplifies pricing products and helps maintain the most effective stock levels. Having inventory integrated with other ERP applications will reduce stock level requirements and lower warehousing costs based on a better understanding of your stock movement.

WorkWise ERP Inventory Levels
View your inventory levels in WorkWise ERP.

Supply Chain Management

Manufacturers and distributors are some of the most prominent businesses that use ERP software on a daily basis. This can be attributed to the need to improve the logistics involved with acquiring their raw materials and delivering a finished product to a customer. A supply chain management suite will manage the flow of goods and services between locations as efficiently and cost-effectively as possible.

Infor CloudSuite Industrial Syteline Customer Service Homepage
Show customers on-time shipments and actual vs planned shipping amounts in Infor CloudSuite Industrial.

What Are The Advantages of ERP?

  • Improved productivity: Eliminate redundant tasks through automation.
  • Stay competitive: At the very least, do what your competitors are doing. At the very best, outperform them with a better technology solution.
  • Provide better customer service: Increase the speed at which you can access customer information and history with your company
  • Become a more mobile business: Access data remotely with a cloud ERP software that can work in a web browser or via a mobile device such as an iPad.
  • Streamline processes and get visibility into workflows: Monitor your internal mechanisms for continuous improvement. Provide transparency to your employees, vendors, customers, or even shareholders.
  • Improved data security: Set security permissions to ensure key company data is not compromised.

How Does an ERP System Help a Company?

ERP will help streamline workflows so all of your business processes are in one place. This should lead to a business with increased productivity. When all of your data is available in a single platform, you’ll eliminate the need to use separate unconnected programs, or document sharing with excel spreadsheets. Housing all of your data in one place will also improve the collaboration between employees, leading to better communication during critical projects.

  • One example is a manufacturing business. Multiple manufacturing plants looking to unify under one ERP system may face scaling challenges, which could be a hindrance to become the global operation they desire to be. Rather than have each manufacturing plant run its own instance of a generic solution (such as QuickBooks and Excel), a unified manufacturing ERP can help define a custom bill of materials and schedule production in a plant that is closest to the customer. This will speed up production time, reduce shipping costs and time, and lead to a more satisfied customer.
  • Another example is a professional services business, such as a marketing agency. This type of business will need to access and manage data across many client databases depending on the projects they are working on. Their workflows are heavily dependent on calendars and tasks, leading to a project management environment.

ERP software will also provide better financial planning by allowing analytics tools to review historical and real-time financial data. This will aid in informed decision making and help break down your business by region, location, profit center, or even by employee.

Rather than having your company financials and sales data split across multiple systems, a unified single system will also improve data security and accessibility. A centralized repository will let you monitor day-to-day processes for continuous improvement. This will overall lead to improved communication between multiple departments who may rely on each other to complete orders.

Examples of ERP Software

While many ERP systems exist, not all may work the way you anticipated. Before you go forward with an ERP implementation, you’ll want to find out what your business needs and what you care the most about. The following is a brief collection of ERP solutions that we’ve helped visitors review over the years.

Dynamics GP Screenshot
Dynamics GP
Over 26 years of use
Extensive network of Microsoft-certified VARs
Flexible deployment and pricing options
Best for
Small Business
Dynamics 365 Screenshot
Dynamics 365
Combine ERP and CRM
Heavily customizable
Similar interface to MS Word and Outlook
Open Source
Odoo Screenshot
Free community version
Large support userbase
Heavy customization options
Cloud ERP
NetSuite ERP Screenshot
NetSuite ERP
Modern user interface
Large selection of features
Backed by Oracle
Best for
Epicor ERP Screenshot
Epicor ERP
Developed exclusively for manufacturers
Built-in artificial intelligence support
Collects real-time shop floor data
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