ERP software and how to get started — benefits, modules, and more.
08-20-2025
Enterprise resource planning (ERP) can be a complex concept. With as many tailored options and configurations as there are unique businesses, choosing the right ERP solution often feels daunting.
However, understanding what an ERP system truly is and how it can empower your company's initiatives is a crucial first step toward making an informed decision. This post will cover everything you need to know about modern ERP.
What is ERP?
ERP software is a highly configurable system of interconnected applications that centralizes inputs from every facet of a business into a unified database and dashboard. The core purpose of modern ERP systems is to bring automation, deep integration, and advanced intelligence, connecting every area of your business within a single, cohesive platform.
One of the main advantages of ERP is its ability to be uniquely tailored to a company’s precise needs through the strategic selection of its modular components. This customization allows you to create a system that perfectly fits your business processes and workflows, enabling departments to share real-time information seamlessly and providing leaders with an instant, enterprise-wide view of all operations.
The operative word in ERP remains enterprise. For an ERP system to be truly effective, all individual applications and modules, regardless of their specific function or deployment method, must work together flawlessly as a single, integrated whole.
Understanding modern ERPs.
Modern ERP systems, while grand in scale and all-encompassing, can be simplified by understanding their two main components:
Modules.
A key characteristic of an ERP system is its modularity. Depending on the business model and specific objectives, a company can select and configure various data sets or modules for each major department or business function. Different businesses will choose unique combinations to achieve their specific ERP-driven goals.
Consider your business's distinct needs: your finance department will require robust accounting and invoicing software, while your HR team needs platforms for talent management and payroll. If you operate an eCommerce business, you'll need sophisticated solutions for supply chain visibility and inventory management. An ERP can provide a purpose-built module for each of these business demands, unifying them within a central data system.
With these interconnected modules, your processes become more standardized, fostering greater collaboration and a seamless flow of information across teams.
Central data repository.
At the heart of any effective ERP system lies a central data repository. This acts as a single, authoritative source of truth for the entire organization. All data, regardless of its origin, resides in this central repository, accessible through a unified interface. This empowers leaders with an enterprise-wide view of all business processes, leveraging real-time data to facilitate agile planning, effective management, consistent reporting, and robust control.
When properly configured, an ERP ensures that reporting and analytics are consistently reliable and accurate. Your company’s critical information is available without duplication, and you can trace documents back to their source for complete verification. This centralized system significantly enhances business intelligence (BI) and decision-making capabilities.
Ultimately, an ERP system helps you manage every aspect of your business as an integrated and highly coordinated whole.
How ERP works.
An ERP system essentially establishes a centralized command center for monitoring and managing all areas of your business. All the different modules your business utilizes are interconnected within this centralized data repository.
Implementing an ERP generally involves three basic steps:
- Configuration. Many companies select a package of core modules that cover fundamental functions, such as finance, sales, accounting, and HR. They then purchase or configure additional, specialized modules that align with their unique business operations and strategic objectives. This phase defines the specific functionalities of your ERP.
- Integration. It's rare for a single system to meet every niche business need. Modern ERPs excel at integrating with external software and specialized applications to deliver solutions such as advanced analytics, specialized materials planning tools, or sophisticated customer relationship management (CRM) systems. ERP provider-branded integrations are often the most seamless. Additionally, API-first architectures and composable ERP strategies enable flexible integration with best-of-breed solutions, ensuring that specialized tools can work in tandem with core modules without forcing all functions into a single, restrictive system.
- Deployment. Once your ERP system is configured and integrated, you must decide on its deployment model. Options typically include on-premises, cloud-based, or a combination of both (hybrid). Your choice will depend on factors such as your specific security and compliance requirements, IT infrastructure, scalability needs, and budget considerations. The overwhelmingly dominant trend today is towards cloud deployment for its flexibility and lower upfront costs.
A well-implemented ERP is now a strategic fit for virtually any industry and any growing company. As your business scales, an ERP system becomes indispensable for understanding and managing all interconnected components of your operations.
Types of ERP deployment models.
Companies today have diverse needs, depending on their industry, business model, and digital maturity. ERP providers understand this variability and offer flexible deployment options. While nuances exist, the three core deployment configurations include:
-
On-premises. Some businesses, particularly those with specific security requirements or legacy infrastructure, may prefer to maintain their ERP software on their servers within their data centers. The benefit is often perceived as greater control over data and systems. However, this comes with the added responsibility and cost of managing all system security, maintenance, upgrades, and hardware activities that are typically handled automatically in a cloud environment.
-
Cloud. The overwhelming majority of new ERP deployments and modernization initiatives today run primarily on cloud technology, due to its scalability, accessibility, and reduced upfront investment.
- Multi-tenant (public cloud). In a public cloud environment, companies (tenants) share common underlying infrastructure and software, though their data remains strictly segregated. This model significantly reduces costs and management overhead as the provider handles all infrastructure and updates.
- Single-tenant (private cloud). In contrast, private clouds offer greater control, dedicated resources, and higher customization capabilities, making them suitable for businesses with unique security or performance requirements. While offering more control, they come with higher costs.
-
Hybrid. Hybrid ERP deployments strategically combine elements of both cloud (public or private) and on-premises processing. Often termed a two-tiered ERP, this is an excellent option when a business needs to maintain strict control over specific, highly sensitive internal processes and data onsite, while leveraging the cost efficiencies and scalability of the cloud for other, less sensitive operations. Another common hybrid approach involves using a public cloud for low-risk applications and data, while deploying more sensitive or proprietary processes within a private cloud environment. This also extends to multi-cloud strategies, which utilize different cloud providers for various ERP components.
ERP integration.
As your business moves closer to selecting an ERP provider and its array of modules, a critical step involves assessing your existing business applications. While many companies choose to migrate their entire business to the ERP’s core modules, some maintain specialized niche applications and must evaluate integration strategies.
Your business or specific teams may prefer best-in-class solutions for certain functions. Perhaps you're ready for the efficiency and scale of a core ERP system but wish to retain a highly customized CRM, a specialized HR platform, or an advanced materials management system. There's no inherent rule that mandates integrating all your systems directly into an ERP's native modules. To decide what’s best for your business, ask the following questions:
- Current system value. How much value does your current system offer? Does it operate optimally? If not, the ERP’s native module might be a superior upgrade.
- Module comparison. Can a module from the ERP provider replicate or even improve upon your legacy system's value at a comparable cost? If so, replacing the legacy system may be more beneficial in the long term.
- Integration feasibility. How complex and costly is it to integrate your current application with the new ERP installation? Can your existing system and the ERP exchange data in real-time? How well do they perform together once connected? A smooth, seamless integration might justify keeping your current system. Modern ERPs emphasize API-first design and composable architecture to simplify this.
- Future viability. In the long term, will your legacy application be able to keep pace with leading industry software or what your ERP provider continuously offers through updates? If not, migrating that functionality to the ERP now could prevent future headaches.
If an ERP provider offers a proven, standard integration with your trusted third-party application, it often makes strategic sense to implement only the core ERP modules. You can always opt to migrate to the ERP provider’s native option later if your needs change or the legacy system becomes a bottleneck. However, if you’re considering integrating a niche application for which no standard, ready-made integration exists, conduct a detailed cost-benefit analysis before proceeding.
Examples of ERP modules.
To truly maximize the capabilities of an ERP, executives must familiarize themselves with the full range of modules that can be bundled within an ERP installation. These are typically driven by business function and range from standardized, foundational processes to highly specialized industry-specific applications. Here are some common examples that demonstrate their evolving sophistication:
- Finance. The automation of core financial accounting processes is fundamental to virtually all ERP installations. Every company benefits from the standardization of activities like transaction processing, accounts receivable and payable, reconciliation, multi-currency management, and comprehensive financial reporting. Finance modules are a standard component across most ERP offerings.
- Human resources (HR). As a highly standardized and regulated field, HR is a natural fit for ERP modules. These highly scalable modules streamline tasks from onboarding new hires to managing detailed employee records, performance reviews, compensation, and paid time off, even across global operations.
- Customer relationship management (CRM). While many companies operate existing CRM suites, modern ERP providers often offer robust, feature-rich CRM modules as integrated components. These can either serve as a migration path for legacy CRMs or provide seamless, ready-to-go gateways for integrating with popular third-party CRM systems, ensuring a unified view of customer interactions.
- Manufacturing. This module helps businesses meticulously coordinate every step in the product creation process. It automates tasks like tracking and managing material costs, optimizing production runs based on real-time inventory and demand, and managing complex bills of materials.
- Supply chain. A comprehensive sourcing or procurement module empowers businesses to precisely track suppliers, automate procurement processes, manage internal controls, set limits, and streamline approval workflows. This module is invaluable for businesses that rely on external providers for goods and services, enhancing supply chain resilience and visibility.
- Inventory management. For B2B or B2C retailers operating in high-volume, low-value or low-volume, high-value environments, a sophisticated inventory management system is critical. Modern ERP platforms track SKUs using advanced tools such as Internet of Things (IoT) sensors and RFID, and can even integrate with blockchain for enhanced traceability. These are often used in tandem with logistics modules to optimize delivery, ensuring the right item reaches the right place at the right time and at the lowest cost.
- Commerce. With the proliferation of B2B and B2C channels, ERP providers are increasingly offering integrated commerce modules. These modules are designed to unify back-office operations with in-store and digital experiences. They facilitate advanced eCommerce personalization, improve employee productivity, optimize online and physical store layouts, and aid in loss and fraud prevention, supporting true omnichannel commerce.
- Sustainability/ESG. As a growing area of focus, some modern ERPs are now offering modules for tracking environmental, social, and governance (ESG) metrics, energy consumption, waste management, and compliance with sustainability regulations.
The list of potential modules is constantly expanding. Many ERP providers specialize in specific industry verticals, offering highly granular modules that cater to the unique needs of specialized businesses.
Cost of ERP.
Migrating your business to an ERP platform is a significant step toward holistic digital transformation. While the benefits are numerous and compelling, it's crucial to balance your choice of modules and deployment model with the total cost of ownership (TCO), which can vary widely.
The total cost of ownership (TCO) for an ERP system typically includes:
- Hardware. For on-premises deployments or specific hybrid setups, this includes the costs of servers, networking equipment, and other necessary infrastructure required to run the ERP. For cloud deployments, these costs are typically included in the subscription fee.
- Software. This covers the cost of the ERP software itself, which, for cloud-based systems, is usually a recurring subscription fee (SaaS model) based on the number of users, modules, or usage.
- Implementation & customization. Costs associated with initial setup, data migration, configuring modules to your specific workflows, and any custom development required. This often represents a significant upfront investment.
- Facilities. While direct facility costs (e.g., server rooms, power) are drastically reduced or eliminated with cloud adoption, businesses might still incur indirect facilities costs related to increased network bandwidth or security infrastructure. Substantial reductions in traditional IT facility expenses almost always offset these.
- Change management & training. An ERP system introduces significant changes across processes and workflows. Budgeting for comprehensive user training, workshops, and ongoing support is vital to ensure user adoption and achieve buy-in for new ways of working.
- Ongoing maintenance & support. For on-premises systems, this includes managing server capacity, backup and recovery procedures, system security, and data privacy internally. For cloud-based systems, these tasks are typically handled by the provider; however, ongoing support contracts or specific managed services may be applicable.
Benefits of ERP.
Every company is unique, but a well-configured ERP system can offer many advantages.
- Cost savings. Because ERPs integrate information throughout the enterprise, there’s no need for separate software bundles or duplicate data entry.
- Workflow visibility. Without a unifying data system, executives and managers must make phone calls, attend meetings, and review spreadsheets to inform their decisions. However, with the right ERP system, decision-makers can view a single dashboard and receive immediate updates on every area of the business. Previously siloed departments now have a window into one another’s performance and planning, so workflow choreography improves dramatically.
- Analytics and business intelligence. An ERP’s central data repository provides analysts with reliable data. They can use a BI module or even advanced analytics with artificial intelligence (AI) to mine deep insights into business strategy and performance.
- Reporting and regulatory compliance. An ERP system can process legislation daily and automatically deliver regular reports on changes to regulations and legal processes.
- Improved data security. ERPs impose strict controls on how data flows throughout the various modules. Access to read, enter, or amend data is granted on a permission basis. Certain users may have full access, while others see only summary or anonymous records. Additionally, an ERP provider ensures that data management is compliant with current data security and personal privacy regulations.
- Improved cybersecurity. ERPs can anticipate, identify, and thwart cyberattacks across all departments as your business scales. Most ERP providers can work with a wide range of industries and risks and have the capacity to invest beyond any one company’s budget on the latest cybersecurity strategies and tools.
- Enhanced risk management. ERP systems enable each area within a company to configure a unique set of modules with data to identify and manage risks. This setup ensures a more robust set of checks and balances and a more reliable audit trail. For instance, a distributor can identify potential product shortages in advance to secure new supplies.
- Stronger collaboration. ERPs introduce standardization, supercharging company-wide collaboration. Teams can view up-to-date status reports from other groups whose productivity affects their work. Moreover, all workers across the enterprise now use a common business language to discuss relevant issues. Cross-functional teams are no longer sharing mere information — an ERP system facilitates genuine understanding. Teams can collaborate more effectively than ever before.
- Scalability. Monumental data transformations can pose significant challenges to any business. By partnering with an ERP provider, a company can effectively outsource its data management and more easily scale to meet this challenge.
- Flexibility and customization. Because of their modularity, ERP systems are nearly infinitely configurable. Companies can customize their installations and add new capabilities as the business grows and evolves. Any niche business can tailor an ERP to meet its specific needs.
- Acute customer focus. Today’s ERPs are tailored to the needs of customer engagement, service, and satisfaction. Most systems can handle product inventory, pricing, and delivery, and can track the buyer journey with tools for managing customer service, support tickets, satisfaction surveys, and even social media interactions.
- Optimized business performance. When configured well, ERPs help standardize and streamline processes and workflows. They equip leaders with the necessary insights to operate smoothly and face both challenges and opportunities with greater ease.
Choosing the right ERP system.
Your choice of ERP provider is fundamentally about finding the right strategic fit for your unique business. Your ERP partner should be able to demonstrate successful installations with other companies of a similar size, operating within your sector, and exhibiting a comparable growth profile.
From there, critically analyze your core business strategy to identify your greatest needs, challenges, and opportunities. Your carefully curated shortlist of ERP providers should be able to address each of these points with demonstrable ease and effectiveness.
- Smaller businesses. These organizations should strongly lean toward cloud-deployed ERPs. They are quick to install, easy to operate, and significantly lower the burden of IT maintenance. Cloud ERPs can rapidly accelerate business growth and technology adoption, effectively transitioning companies from fragmented silos and manual spreadsheets to a fully integrated, efficient operation.
- Mid-sized companies. Often seeking to optimize core processes and scale operations, mid-sized companies find immense value in ERPs with robust, built-in analytics and purpose-built functional modules. As more functions become tightly integrated and decision-making becomes better informed and collaborative, overall business performance typically improves dramatically.
- Enterprise companies. Larger enterprises are almost certainly already running some form of ERP system. However, due to continuous growth and evolving business needs, many may have outgrown or require modernization of their existing legacy systems. For these companies, the focus is on accessing cutting-edge innovations such as intelligent automation, embedded AI, and composable architectures. Regular reevaluation of business needs and market conditions is crucial for determining the best steps to modernize, upgrade, or strategically shift to a new ERP provider.
Future of ERP.
As it has in the past, ERP will continue to evolve in lockstep with rapid technological advancements, solidifying its role as the digital backbone of the enterprise.
Today's ERPs are already deeply integrated with innovations that were once considered futuristic, including:
- Cloud-native architecture. Enabling "access from anywhere" and unparalleled scalability.
- Advanced analytics & business intelligence. Leveraging massive datasets for prescriptive and predictive insights.
- Artificial intelligence (AI) & machine learning (ML). Embedded into workflows for automation, intelligent recommendations, anomaly detection, and optimization. This includes the growing use of generative AI for tasks like report generation, content creation, and natural language interfaces.
- Internet of things (IoT). Connecting physical assets to the ERP for real-time monitoring and data collection.
- Blockchain. Enhancing supply chain traceability and data integrity.
- Robotic process automation (RPA). Automating repetitive, rule-based tasks within ERP workflows.
Looking ahead and beyond, ERP providers are actively exploring and integrating emerging technologies to empower their clients further. This includes harnessing the power of 5G connectivity, leveraging edge computing for real-time processing at data sources, utilizing quantum computing for complex optimizations, employing neural networks for enhanced pattern recognition, and refining capabilities for managing digital intellectual property. ERP systems are becoming increasingly pivotal for orchestrating operations in highly connected ecosystems, even touching on concepts such as autonomous operations and the burgeoning metaverse.
Crucially, integration with existing ERP processes is continuously becoming simpler. Providers are embracing DevOps principles, robust Application Programming Interfaces (APIs), and low-code/no-code platforms. This shift toward composable ERP enables businesses to integrate new technologies and best-of-breed solutions with unprecedented flexibility, eliminating the need for complex, monolithic overhauls.
Getting started with ERP.
Suppose your business is ready to transition from fragmented operations to coordinated insights, from manual tasks to efficient automation, from instinctual decisions to data-driven strategies, and from reactionary responses to predictive capabilities. In that case, you are ready to embrace ERP.
One powerful tool that can help a business realize many of the benefits of integrating strategy and execution is Workfront. Workfront enables individuals and teams to align their daily efforts with the broader strategic goals of the business. Its ability to consolidate workflows and information visually and dynamically allows seamless collaboration across the right tasks, at the right time, with the right people.
First, as a bridge toward comprehensive ERP adoption, and later as an invaluable adjunct for work management and orchestration, Workfront helps businesses and their teams connect strategy directly to delivery, ensuring your ERP investment translates into tangible operational excellence.
Watch a video overview to see for yourself how Workfront can help you on your ERP and broader strategic journey.
Recommended for you
https://business.adobe.com/fragments/resources/cards/thank-you-collections/workfront