What is ERP?
An ERP system is a tool that helps companies manage their daily affairs. ERP stands for “Enterprise Resource Planning.” It allows you to easily control things like finances, production, warehouses, and customer relations—all in one place.
Imagine it as a digital organizer for your business. Instead of using multiple programs or spreadsheets, you have one place where everything is organized and works together.
How does an ERP system work?
The system operates within a single, integrated IT system. This means it’s based on a single database and a set of interconnected functions. It collects information from various company departments, such as sales, accounting, and production, and combines it into a single, integrated system. This allows everyone in the company to see what’s happening and make decisions faster. For example:
- the accountant checks how much the company earned.
- the warehouse worker knows how many products are left in stock.
- the manager sees how sales are going and what needs to be improved.
Vendo.ERP is a modern and practical ERP system that helps you manage your business. It facilitates monitoring and planning your company’s assets and resources. It improves organizational structure and helps keep costs in check. It automates many tasks, saving time and allowing you to stay up-to-date on current events. It helps your company operate more efficiently, reduce expenses, and better serve customers, ultimately increasing profits. It also provides important information that facilitates decision-making.
ERP system architecture
Adapting the appearance and functions of the system to the user's needs (e.g. changing the appearance of lists, tabs or forms depending on permissions).
Rozbudowa systemu dzięki dodatkowym wtyczkom, tworzenie własnych pól, zmiana uprawnień i ustawianie własnych wydruków.
What industries use ERP systems?
ERP software is a popular program and tool that helps manage companies across various industries. While it’s highly versatile, to perform optimally, it must be tailored to the specific industry and company needs. Different system features may be more important in each industry, helping to better organize work.
Production
When choosing an ERP system, manufacturing companies consider how well it supports production and supply chain management. It’s crucial that the system fits their workflow – this can help reduce costs, improve product quality, and fulfill orders faster.
What functionalities have the greatest impact on the efficiency of companies in the manufacturing industry?
- Technical Production Preparation
Good technology and bill of materials (BOM) management helps manufacturing companies work faster and more accurately. An ERP system should facilitate the creation, copying, and importing of technology and BOMs, along with technical drawings. This makes production processes simpler and more precise.
- Material Requirements Planning
This part of the ERP system calculates how many raw materials and components will be needed for production and when they need to be available. It does this based on projected demand, production plans, and current warehouse inventory.
- Production Planning
Production planning is responsible for determining what, when, and in what quantities to produce. It ensures that all necessary raw materials, machinery, and workers are available at the right time to meet market demand at minimal cost.
- Production Recording
The production recording module continuously collects data on what’s happening during production—how tasks are progressing, how much material has been used, how machines are performing, and what the quality of products is. This allows the company to quickly resolve issues, better manage resources, and plan for future operations. - Adapting an ERP system to the specifics of manufacturing industries
Adapting an ERP system to the specific needs of a given manufacturing industry is crucial to fully utilizing its capabilities. Each industry has different processes and workflows, so the system must be tailored to its specific needs.
Trade and eCommerce
Trading companies and online stores (eCommerce) value most in ERP systems the functions related to sales, warehouse management and shipping of goods.
- Omnichannel Sales
Modern ERP systems for e-commerce and retail companies support omnichannel, meaning sales across multiple channels: online, through salespeople, by phone, in-store, and EDI. Everything is contained in a single system, simplifying control. It helps salespeople plan visits and orders, and EDI automatically inserts orders in retail chains.
- Pricing Policy in Retail ERP Systems
Retail ERP supports pricing and promotions. Prices can be adjusted based on costs, demand, or orders. The system supports discounts (e.g., quantity, seasonal) and different prices for customer groups or sales channels. Prices update automatically, for example, when costs or inventory changes.
- Warehouse management based on the WMS system in a trading company
An ERP system with a WMS streamlines warehouse operations in a retail company. It automates tasks such as:
- place management – arranges goods in the warehouse depending on turnover and availability.
- order picking – speeds up product picking thanks to strategies such as wave picking or multipicking.
- packaging and shipping – organizes packaging, prepares documents and labels.
- goods receipt – automates the receipt of deliveries,
Services
Service companies use ERP systems to manage projects and orders, helping them better organize their work and control their finances. Key features include:
- Cost Estimation – Planning key costs such as materials, labor, and equipment. This allows the company to know how much it will spend on the project, prepare accurate quotes for clients, and avoid unexpected expenses.
- Supply management – Makes it easy to order what you need, track deliveries, and ensure everything arrives on time. This is especially important when projects depend on timely suppliers.
- Work Planning and Billing – Allows you to schedule your team, assign tasks, and track how long they take to complete. The system collects data on hours worked, which helps with billing employees and clients, as well as assessing project profitability.
In service companies, ERP combines these elements in one place, providing a complete picture of every job—from quote to completion. This streamlines communication between the team and clients and helps them respond more quickly to changes.
What are the functions of an ERP system?
ERP systems are divided into modules that contain various functions. These functions support company processes, often connecting multiple departments. Each module can be tailored to the company’s needs, making the ERP system a flexible business management tool.
Order and sales processing
The ERP system helps prepare offers, accept orders, and then process and sell them. It enables pricing management, including setting individual rates and checking customer credit limits. It also allows you to create and send personalized offers, facilitating customer contact.
Orders can enter the system from various sources, such as online stores, B2B platforms, EDI (electronic document interchange) systems, or even from company employees. This makes order management faster and more responsive to market needs.
ERP software provides constant access to up-to-date warehouse information. Goods are automatically reserved and warehouse operations are organized, streamlining logistics.
Supply and warehouse management in the ERP system
ERP software helps coordinate purchasing, inventory management, and distribution. It plans and tracks the movement of materials and products throughout the company, ensuring adequate inventory levels. It supports warehouse operations with a WMS module. It utilizes barcodes, warehouse location markers, and data collection devices to reduce errors and speed up the retrieval of goods.
Production management in the ERP system
Production management in an ERP system includes organizing production orders, scheduling work, quality control, and tracking progress. An ERP system for manufacturing provides up-to-date information about what’s happening in production, in the warehouse, and with deliveries in transit. It helps plan what materials will be needed and establishes a production schedule.
Scheduling is an important but complex function handled by a dedicated APS (Advanced Planning and Scheduling) subsystem. This allows for better utilization of production resources, less machine idle time, and more timely production.
An ERP system in manufacturing also integrates with other tools. Interoperability with CAD programs facilitates the automatic creation of bills of materials (BOMs) and technology. Connecting with nesting systems streamlines the production process itself.
CRM and project management in modern ERP systems
An ERP system helps you communicate better with your customers thanks to its CRM features. It gathers all important customer information in one place—what they’ve purchased, what offers they’ve received, whether they’ve advertised anything, who they’re in contact with, and how their payments are handled. This makes it easier to quickly respond to their questions and needs.
ERP also helps with project management. You can start by creating a project charter, planning the budget, and phasing. Managers assign tasks to employees, and everyone on the team sees what they’re supposed to do and when. This makes work flow more efficiently.
Financial and accounting management with ERP software
ERP software simplifies accounting work by automating tasks such as data entry, transaction recording, and preparing balance sheets and profit and loss statements. It does this through pre-built templates and automatic rules that record transactions—for example, sales, purchases, inventory, or production—conducted in other parts of the system. As an accounting system, it calculates taxes and creates declarations and reports for tax offices. Polish ERP systems are adapted to tax regulations and their changes.
In finance, an ERP system helps manage what a company owes and what it’s owed. It automates settlements with customers and suppliers by connecting to online banking. It also facilitates budget planning and ensures financial accuracy.
Handling HR and payroll processes
ERP software helps manage human resources, or employee-related matters. It handles tasks such as employee information collection, recruitment, time tracking, payroll, employee development, and evaluation. This allows all employee data, progress, and performance to be stored in one place, simplifying management.
When should you consider implementing ERP?
It’s worth considering implementing an ERP system when your company is experiencing problems with management and information flow. Here are some signs that it’s time for a change:
There are many different (separate) programs running within the company.
If you’re using different applications that don’t work well together, data must be transferred manually. This creates clutter and errors. ERP integrates everything, streamlining the flow of information.
Processes are implemented in spreadsheets
If many things are done in Excel or on paper, it’s a sign of a lack of automation. Such methods are prone to errors, difficult to expand, and slow down work. An ERP system brings everything together in one place, reducing manual work and the risk of errors.
Current tools do not help you save
If your current solutions don’t streamline workflows or reduce costs, they may be outdated. New ERP automates processes, resulting in savings and improved efficiency.
The software is not keeping up with the company's growth
As a company grows, it needs more from its system – managing larger processes, data, and departments. If old tools aren’t enough, ERP allows you to scale your work and maintain order.
Creating reports takes too long.
When reports are created manually, collecting data from various locations, it’s easy to encounter delays and make decision errors. With ERP, everything is in one place, so reports are created quickly and accurately.
The system runs on old technology
Outdated solutions are slow, difficult to change, and can break down because no one supports them anymore. New ERP based on modern technology is more secure and efficient.
Example of an ERP system
Vendo.ERP is software designed for manufacturing, retail, and e-commerce companies. It supports critical tasks such as production management, logistics, sales, and customer service. Thanks to its API, it can be connected to other tools and custom modules can be added, allowing the ERP system to be tailored to the company’s needs.
Vendo functional modules
Sales
Warehouse and Logistics
WMS
Production
APS (Production planning)
MES (Production registration)
CRM and Workflow
Project management
CMMS
Finance and Accounting
Controlling
BI analytics
HR and Payroll
Benefits and disadvantages of an ERP system
Many people consider implementing an ERP system an additional expense, requiring both time and money. However, when deciding to implement it, it’s worth considering the long-term benefits and savings the system can bring.
Benefits - why is it worth having ERP software?
Why do companies choose an ERP system? Here are some of the main reasons:
- Everything in one place – an ERP system integrates key company processes, such as sales, procurement, logistics, warehousing, finance, and accounting. This gives the company greater visibility and control over its operations.
- Greater efficiency – ERP automates many tasks and streamlines work. Employees don’t waste time on repetitive tasks because data is in one place. This makes the company more efficient.
- Better warehouse management – in Poland, ERP systems help track inventory. This helps reduce overstocking and shortages, reducing costs and improving customer service.
- Better customer service – ERP provides access to order, product, and delivery information, and includes CRM features. The company can help customers faster and better.
- Better data analysis – the system collects data from various areas of the company. Analytical tools allow you to see what’s working well and what needs improvement, which aids decision-making.
- Grows with your business – ERP in Poland is expandable. As your business grows, it’s easy to add new features and modules.
Disadvantages of the ERP system and its challenges
Before choosing an ERP system, it is worth knowing not only its advantages, but also the disadvantages and difficulties that must be faced.
- Duże koszty – kupno, dopasowanie i wdrożenie systemu ERP może sporo kosztować, zwłaszcza małe lub nowe firmy.
- Time-consuming implementation – setting up the system takes a long time and requires changes in the company and employee training.
- Risk of failure – if the implementation is poorly planned or carried out by untrained people, it may fail, resulting in a loss of money and time.
How to choose an ERP system?
Choosing an ERP system is an important decision that can impact how well your business runs. It’s important to ensure the system fits your industry and your company’s needs. It’s crucial that it can grow with your business. It’s also worth ensuring it has the features you need for key areas like finance, employees, production, and deliveries.
The system should be simple and easy to use, as this helps employees quickly become accustomed to it. It must also work well with other tools within the company to ensure smooth workflows.
Technical support and training from the vendor shouldn’t be overlooked – they’re key to a successful launch and successful system operation. Before making a choice, it’s worth carefully calculating the purchase and implementation costs, as well as the expected benefits, to determine whether the investment will be worthwhile.
ERP system implementation step by step
The ERP implementation process involves customizing and implementing the system to meet the company’s needs. Here’s a step-by-step process:
Pre-implementation analysis
First, we analyze what the company wants to achieve, what its needs are, and what the system should do.
Configuration and customization
The system modules are then set and adjusted to fit the company based on this analysis.
Testing
The system is then tested under trial conditions to ensure that everything works as it should.
Data migration and supplementation
Data is transferred from old systems to the new one so that the ERP can start working.
User training
Employees are trained so that they know how to use the system and can use it effectively.
Production launch of the system
Finally, the company officially launches the system – the old programs are no longer used, and the new one takes over. The company now has a complete ERP system.
What does working on an ERP system look like?
Working with an ERP system varies depending on the company and the employee’s role. Every day, you’ll do things like:
- data entry,
- tracking activities within the company,
- creating reports,
- analyzing data.
An ERP system like Vendo is integrated, so you only need to enter data once, and then the system automatically uses it in subsequent steps. Many tasks that were once performed manually now happen automatically, speeding up workflows.
User interface
Modern ERP systems have a simple, graphical user interface (GUI). It can be customized for each employee, ensuring they see only what they need for their job – functions, views, forms, and reports are tailored to their role.
Mobile and remote work
Today’s ERP systems allow you to work from anywhere. Access is via a web browser or a smartphone app. This allows you to manage tasks, review reports, and work remotely.
You will find many terms related to working with an ERP system in the ERP dictionary.
Is the ERP system easy to use?
A well-chosen and implemented ERP system should simplify employees’ daily tasks. Its ease of use depends on the specific system, its flexible design, and its fit for the company. ERP systems offer numerous functions and integrate the work of various departments, so when choosing one, it’s important to ensure it’s easy to use and has a user-friendly interface.
If the system isn’t fully implemented, it can be difficult to work with. Employees may also still be using Excel or other tools, slowing down workflow.
How to make ERP system operation easier?
- Training – by teaching employees how the system works, we help them better understand and use it.
- Interface customization – adapting the system’s appearance to the needs of employees, e.g. changing the main screen, lists, menus or forms, makes it more intuitive.
- Documentation – easy access to instructions helps troubleshoot problems and learn the system. There are two types: general (about the system and its modules) and process (step-by-step instructions on how to do something), created during implementation.
- Simpler processes – if a company’s processes are simple, they are easier to manage in an ERP. Organizing them before implementation makes the system easier to use.
Connecting the ERP system with other tools
An ERP system can be integrated with other systems and services using APIs (Application Programming Interfaces), making it work better and helping your company be more efficient.
What can ERP be connected to?
- With banks – for sending transfers and downloading statements.
- With freight forwarders – for sending waybills and printing labels.
- With CAD systems – for uploading bills of materials (BOM).
- With Nesting systems – for cutting optimization.
- With EDI platforms
- With online stores – to exchange data about products, prices, orders and payments.
What does integration give you?
First, it automates work—less manual work is required. Second, it reduces errors. Third, it facilitates collaboration with partners, which improves logistics, deliveries, and customer satisfaction.
ERP System – FAQ
1. What are the ways of licensing an ERP system?
- Perpetual License (On-Premise) – You purchase the system once and for all, pay a one-time fee, and then optionally for updates and support. This used to be popular, but is now less common.
- Subscription – You pay monthly or yearly to use the system. The cost depends on the number of users or the company. This is cheaper to start with and more flexible, which is why it’s gaining popularity.
2. What does the license price depend on?
The price of an ERP software license depends on two main things:
- Range of functions (modules) – You pay for the number and type of modules you choose. ERP systems are modular, so you only take what you need, such as accounting, warehousing, sales, or production. Additional modules, such as WMS or advanced analytics, increase the price.
- Number of users – The price depends on how many people use the system. There are two ways to calculate this: Named User (a license for a specific user, more expensive) and Concurrent User (a license for the number of people logged in simultaneously, e.g., 10 people, cheaper and better if they work at different times).
3. How much does an ERP system cost?
The price depends on several things:
- License – one-time or subscription, depending on users and features.
- Implementation and training – You pay for analysis, installation, integration, customization, and employee training.
- Hardware – sometimes you need to buy new or upgrade old ones. In the cloud, you pay for online services.
- Maintenance – updates and support are additional costs. To estimate, you calculate everything (license, implementation, hardware, maintenance) for 2-3 years – this is called the TCO (total cost of ownership).
Example costs per year:
- Small companies – several to several dozen thousand zlotys.
- Medium-sized companies – several dozen to several hundred thousand zlotys.
- Large companies – over a million zlotys.
4. Will the investment in ERP pay off?
It may pay off, but it depends on:
- The right choice – the system must fit the company, be flexible and work with other tools.
- Good implementation – you need the support of your boss, a realistic plan and training.
- Focus on profits – It is best to aim for automation, better data flow and lower costs.
Only with a good plan will the investment bring savings and greater efficiency.
5. What is cloud ERP?
This ERP system runs on the provider’s servers, not on-premises. Access is via the internet, and you pay monthly for use. Advantages include easy access from any location and device, and the ability to quickly customize the number of users or features without purchasing hardware. You can read more in our article about cloud ERP.
6. How long does implementation take?
The time it takes to implement an ERP system depends on the company’s size, process complexity, scope of functions, customization, and readiness for change. Here are some examples:
- small companies – 2 to 6 months, usually standard modules or cloud, no major changes.
- medium-sized companies – 4 to 9 months, more adjustments, integration and training.
- large companies – 6 to 18 months, lots of personalization, integration and a phased approach to avoid disruptions to work.
7. Does purchasing a new ERP system require replacing the computer infrastructure?
Not always, but it depends on a few things:
- system requirements – if ERP needs more power, memory or space than you have, the hardware needs to be upgraded.
- type of implementation – in the cloud you do not burden your servers, so replacement may not be necessary unless employee computers are too weak.
- hardware condition – if it is old or slow, upgrading may be a good idea for stability.
- compatibility – If your current hardware doesn’t fit with your new ERP or other systems, you need to update it.
In short, it depends on the system and your infrastructure – in the cloud, things often stay the same, but sometimes modernization is necessary.
8. What does post-implementation support look like?
Post-implementation support helps the system run smoothly. This includes:
- technical support in case of problems,
- updates,
- taking care of efficiency.
The vendor may also offer additional training and advice on how to better use the system. Regular checkups allow for the quick detection and correction of issues, which is crucial for the long-term success of ERP.
9. Is it profitable for a small company to invest in ERP?
Small businesses can thrive with ERP, just like many medium-sized and large companies that have chosen such tools at the right time. But it depends on the situation. You can read about when it’s worth it, which system to choose, and how to avoid high costs in our article about ERP systems for small businesses.