ERP software connects your systems and reshapes your strategic outlook.
Considering an enterprise resource planning (ERP) system to streamline your business operations? This move could transform how your company handles everything from inventory to customer service.
With the ERP market projected to grow from $44 billion in 2022 to $60.65 billion by 2025, [1] more businesses find these systems indispensable.
Yet, adopting modern ERP software isn't just a technological upgrade—it's a strategic decision with challenges and opportunities. Understanding the advantages and potential hurdles is key to enhancing efficiency, improving data integration, or driving better decision-making.
We’ll explore ERP software's key benefits and outline potential challenges. Dan Aldridge, [2] a seasoned ERP pro, joins us to share valuable insights from his extensive work in the field, helping you navigate these waters with informed clarity.
What is ERP software?
ERP software is an integrated suite that helps streamline and manage an organization's core business processes, from accounting and human resources (HR) to supply chain and customer relationship management (CRM).
ERP systems enhance efficiency, improve data accuracy, and support informed decision-making across various departments by centralizing data and automating routine tasks.
Learn more about ERP software.
Benefits of using ERP software
While the concept of ERP software is familiar, its specific benefits often need to be clarified. Aldridge highlights the software’s unique value, stating, "ERP doesn't just centralize business functions—it transforms them. By bringing everything under one roof, a modern ERP system turns isolated data into powerful, actionable insights that drive smarter, faster business decisions."
Let's delve into the key benefits of ERP software that consistently stand out in our user review data, illustrating how modern ERP systems significantly enhance operational efficiency and decision-making.
1. Automates tasks and ensures faster operations
Enterprise resource planning software significantly enhances business efficiency by automating routine tasks (such as order processing, payroll management, and inventory control), freeing up valuable time and resources that can be redirected to strategic initiatives (like market expansion, product development, and customer engagement strategies).
Aldridge shares this perspective: "By automating data-heavy tasks like inventory tracking and invoicing, modern ERP systems speed up these processes and reduce errors, allowing staff to concentrate on more value-added activities."
Below, we explore specific use cases where ERP's automation capabilities come to life, supported by testimonials from Capterra users who've experienced these benefits firsthand.
Use case | Description | Review excerpt |
|---|---|---|
Enhance process deficiency | You can consolidate multiple processes into a single, smooth workflow, increasing efficiency across operations. | "The ERP tool streamlines processes automates tasks, and provides real-time visibility into business operations.” —Harkirat S., marketing coordinator in IT and services |
Monitor project milestones | Track real-time progress of various projects, ensuring all phases are completed within set deadlines. | "The ERP platform offers a comprehensive view of the entire team's performance, tasks, and assignments, which greatly helps track progress.” —Benn H., senior IT business analyst in arts and crafts |
Coordinate task scheduling | Leverage ERP's scheduling capabilities to align tasks with resources efficiently, ensuring timely project delivery. | "The tool does have its schedule and can also integrate with your other schedules, which is a nice feature.” —Joel N., specialist recruiter in the UK |
One of the standout features users appreciate in ERP software is its robust project tracking. ERP systems enhance strategic management and significantly boost operational efficiency by automating the detailed monitoring of project stages and customer interactions.
Project progress tracking in ERP software Dynamics 365
Automate high-impact tasks first to see immediate improvements in efficiency and cost savings.
Monitor automation outcomes to track performance gains and adjust parameters for optimal results.
Integrate with analytics to measure the financial impact of automation on operations directly.
2. Improves workflow management and streamlines operations
ERP software solutions redefine workflow management by integrating and automating cross-departmental functions, allowing businesses to respond more swiftly and effectively to operational demands.
Aldridge highlights the profound impact of these systems: "With its robust customization and integration capabilities, ERP technology allows organizations to reengineer their workflows, enhancing efficiency and responsiveness at every level."
Below, we delve into specific ways ERP software solutions enhance workflow management, as evidenced by real-life applications and Capterra user testimonials.
Use case | Description | Review excerpt |
|---|---|---|
Customize to optimize | ERP systems provide extensive customization options that adapt to your business needs, streamlining operations and reducing inefficiencies. | "I particularly appreciate the ability to customize fields and workflows to suit my business needs." —Hitesh, web development & digital marketing company in India |
Use an intuitive interface for efficiency | A user-friendly and configurable interface in ERP systems facilitates easy integration and enhances user engagement, leading to higher productivity and smoother workflow transitions. | "Seamlessly integrating into our existing system, it optimized our workflows and increased productivity through its intuitive user interface." —Jonathan, director of operations in the US |
Centralize data management | Acting as a central repository, ERP software ensures that all your operational data is accessible, manageable, and secure, fostering a streamlined approach to business management. | "I love how this tool allows us to manage jobs better, retain history, and have one centralized workflow system." —Heidi, CEO in the US |
Customization is crucial in ERP systems, enabling businesses to tailor the software to their unique processes and needs. This flexibility ensures that ERP implementations maximize value and align closely with specific operational goals and challenges.
Real-time customized reports in ERP software Wrike
Continually refine and optimize ERP workflow configurations to align with changing business needs, ensuring that processes remain efficient as your company grows.
Use ERPs’ real-time data aggregation and reporting tools to make quicker, more informed decisions, significantly reducing overhead costs.
3. Handles inventory management efficiently and streamlines supply chain operations
Effective inventory management transcends simple stockkeeping—it’s about ensuring your supply chain operates without hitches, directly impacting customer satisfaction and financial outcomes. ERP software integrates inventory with broader operational needs, balancing supply and demand dynamically.
"ERP doesn’t just manage inventory,” Aldridge highlights. “It anticipates needs, aligning your stock with production cycles and market demands, thus avoiding both excess and shortages."
Let’s explore specific use cases that demonstrate ERP's effectiveness in managing inventory, along with excerpts from user reviews on Capterra:
Use case | Description | Review excerpt |
|---|---|---|
Optimize production planning | ERP systems enable proactive production scheduling, aligning manufacturing with inventory levels and sales forecasts to optimize your resource use. | "It’s a comprehensive solution for streamlining production processes, managing inventory effectively, and fostering seamless team communication." —Cristian, software engineer in Romania |
Streamline sales management | By integrating sales data, ERP ensures that inventory levels are adjusted in real time, reducing the risk of overproduction and understocking. | "The ERP system we used was comprehensive, covering every aspect of operations from sales to financials, ensuring nothing is overlooked." —Becky, software developer in the US |
Enhance accounting accuracy | Accurate inventory data feeds directly into financial systems, ensuring that revenue and expenditure are precisely tracked and managed. | "The ERP system handles end-to-end accounting, streamlining inventory management and reducing manual efforts." —Gokulnath, technical consultant in India |
After reviewing these use cases, it's evident how crucial sales management integration is. Users often seek ERP systems that anticipate sales needs, aligning inventory and production in real time to meet customer demands effectively and efficiently.
Sales management dashboard in ERP software ERPAG
Align inventory levels with ERP-driven demand forecasts to reduce overstock and shortages, cutting costs while improving service.
Implement automated rules in your ERP software to maintain optimal stock levels, minimize human error, and ensure consistent supply flow.
Challenges of using ERP software
Implementing an ERP system is a strategic move fraught with complexities. The road to a fully functional ERP system is often bumpy, from integration issues to slow user adoption. Understanding these challenges is as critical as recognizing the ERP benefits for many businesses.
Michael Ziemba, [3] an ERP software advisor at Capterra, specializes in guiding companies through this intricate process. His expertise sheds light on the typical obstacles businesses face, providing practical advice to navigate these challenges successfully and align the software with your operational goals.
1. Overwhelming amount of ERP software choices
With 1,980 ERP systems on the market, each boasting unique features and benefits, it's easy to get lost in the options. The 2024 Capterra Tech Trends Survey reveals that while 96% of software buyers create a shortlist of vendors, 62% regret their choice later.*
This regret frequently arises from inadequate research and reliance on superficial information sources like online ads or vendor social media, leading to decisions that may not align with business needs.
Start with Capterra Shortlist for an unbiased comparison of top-rated ERP systems, ranked based on user reviews and satisfaction scores.
To get a clearer picture of software performance, Ziemba suggests that "beyond just comparing features, integrate real user testimonials and case studies in your research." This approach can highlight potential challenges or benefits that product descriptions may not reveal, offering a deeper understanding of the software's fit for your needs.
2. Hidden costs in ERP implementation
While transformative, ERP systems come with a pricing model that can introduce unexpected costs, often catching businesses off guard. Even with seemingly affordable entry-level options, which can range from $20 to $2,100 per month, [4] the total cost of ownership can escalate quickly due to hidden expenses.
This situation applies to many types of software. In fact, our recent tech trends survey* reveals that out of 59% of buyers who regret a tech purchase in the last year, nearly half of those (49%) experienced increased costs after their purchase decisions.
When it comes to ERP systems, hidden costs can stem from additional customization, training, and maintenance that are not always apparent in initial pricing. This insight is crucial for businesses to budget accurately and avoid unexpected financial strain from their ERP investment.
Ziemba highlights the importance of considering all potential costs when planning an ERP investment, advising to "thoroughly account for direct expenses like subscription fees and less obvious costs related to system integration, customization, and continuous upgrades." Ensuring transparency with vendors about the total cost implications helps avoid unexpected surprises.
3. Difficulty with existing tech integration and onboarding new users
Integrating ERP software with existing technology poses significant challenges, often revealing unforeseen compatibility gaps. Similarly, the onboarding process for new users can disrupt workflows, especially when the training does not meet their specific needs. Both issues can postpone the expected advantages of the new ERP system and reduce productivity.
According to Capterra’s 2025 Tech Trends Survey*, 36% of business decision-makers anticipate effectively implementing technologies will be a challenge in 2025. While this finding applies to any software, it’s especially relevant for ERP systems because of the number of different business functions they cover.
Before finalizing an ERP solution, conduct detailed compatibility assessments with your existing systems. “Opt for ERP solutions that offer flexible APIs and customizable modules tailored to fit your existing technology landscape," Ziemba suggests.
“Develop role-specific training pathways that address the unique needs and pain points of different user groups," advises Ziemba. Tailored training can help users feel more confident and proficient, leading to quicker adoption and fewer disruptions.
Looking for the ideal ERP software?
Let Capterra guide you through the maze of ERP software choices. Start with our Capterra Shortlist to quickly identify top-rated ERP systems, filtering options by price, features, deployment types, and the availability of free trials.
If decision-making seems daunting or you need personalized assistance, schedule a free 15-minute consultation with a Capterra advisor. Take it from Ziemba: "In just 15 minutes, we can simplify your search by honing in on ERP solutions that are not just a fit but a catalyst for business growth and efficiency."
This focused approach helps you make an informed investment, ensuring your ERP software aligns seamlessly with your strategic goals.
