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Midsize business

7 advantages of ERP every business owner and exec should know

The decision to adopt an organization-wide enterprise resource planning (ERP) system remains positive for growing businesses—and for good reason. There are many widely known advantages of an ERP, from compliance to productivity and even cost reductions. Such solutions act as a way to bolster success.


Sure, your business could use individual software tools to tackle each of its many functions like banking, payroll, human resources, and supply chain management. However, ERP systems offer a comprehensive solution that integrates a wide range of business management tools. This means you don’t need multiple programs to run your business—an ERP makes it all possible.

Jump to:



  1. Efficiency and productivity
  2. Scalability and flexibility
  3. Decision-making
  4. Customer service satisfaction
  5. Cost savings
  6. Compliance
  7. Collaboration and communication
The key advantages of ERP systems like scalability and efficiency.

1. Efficiency and productivity 

Streamlining workflows and eliminating manual tasks are essential to running a business efficiently, and luckily, that’s one of the major benefits of an ERP. Not only do they automate repetitive processes, but they can provide faster response times by streamlining processes and providing on-call access to information. Other ways that an ERP can increase efficiency include:


  • Providing predictive analytics that can help anticipate future needs, both for product and support. 
  • Supplying enhanced communication between departments, allowing for maximum productivity 
  • Providing a single source of truth, giving teammates the correct information the first time.

2. Scalability and flexibility

An ERP is the way to go if you’re looking for future business expansion. ERP systems have a modular architecture, allowing businesses to add, remove, or change modules to reflect changing business needs. In the same sense, you can personalize custom ERP solutions to truly fit the needs of the business, whether it’s a healthcare organization, a retail business, or anything in between.


Adaptability to business growth and change aside, cloud-based ERP systems don’t require significant hardware or infrastructure changes to meet ever-evolving business changes, making this specific ERP solution stable. Other ways that ERP systems offer flexibility include:


  • Offering tools and services to help businesses migrate from an existing system or different ERP.
  • Providing regular updates to the system (for cloud-based ERPs), ensuring that the business is up-to-date with the latest technology.

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3. Decision-making

An ERP can do more than scale your business—it can provide invaluable access to actionable insights and analytics to improve decision-making skills across the organization. With a proper ERP in place, employees can gather any information they need quickly and efficiently, helping them make informed decisions faster and more confidently. 


ERP systems allow enhanced visibility into key performance indicators (KPIs), which go hand-in-hand with decision-making throughout the company for various tasks. The benefits of implementing an ERP for business decision-making include: 


  • Providing improved data accuracy with consistency.
  • Creating scenarios to evaluate different business use cases.
  • Developing predictive models to forecast risks, opportunities, and successes.


How ERP can inform decision-making, such as developing accurate forecasting models.

4. Customer service satisfaction

One of the biggest benefits of implementing a full-scope enterprise solution is increasing customer service satisfaction. After all, your customers are your business’s lifeline, and keeping them happy helps customer retention. 


An ERP program allows you to maintain and update extensive customer profiles, allowing customer service representatives to provide the best service possible. ERP systems also allow any changes to customer information to be reflected across the system in real time, allowing your team to work with the most up-to-date information. 


ERP helps improve customer service satisfaction by: 


  • Improved order processing and fulfillment processes. 
  • Better inventory management and efficient replenishment processes.
  • Optimized procurement and supplier relationships.
  • Accurate order tracking.
  • Customized recommendations based on prior purchase history. 
  • Proactive versus reactive customer support for pain points.

5. Cost savings

Reducing costs is a top accounting priority for growing business owners. Luckily, ERP systems can help significantly lower operational costs by providing visibility of resource utilization, allowing you to avoid duplicative efforts. Additionally, having an ERP can help reduce manual, repetitive tasks like data entry and automate them instead, saving time and company money. 


A few ways ERP solutions help to reduce costs:


  • Automation minimizes human error.
  • Streamlined processes reduce lead times.
  • Decreasing excess inventory thanks to accurate inventory tracking.
  • Providing data on purchasing patterns, leading to price negotiations.
How you can leverage ERP for maximum cost savings, such as optimizing inventory management.

6. Compliance

The ease of remaining compliant is another ERP system advantage. Businesses must remain compliant with many different industry and government standards, and having an ERP program in place can help achieve that. 


First and foremost, ERP systems maintain accurate record-keeping by providing a centralized place for storing and managing data. Likewise, these systems can generate accurate audit trails showing industry compliance evidence, reducing the risk of errors. 

Perhaps the biggest compliance advantage of an ERP is the improved data security and protection it offers to both your business and customers. However, never let a program do all the work without oversight—make sure to double-check work. 

ERP also helps businesses maintain compliance by:

  • Tracking changes to documents and data.
  • Standardizing processes and procedures throughout the company.
  • Sending real-time alerts when compliance deviations are detected.
  • Providing full-scope visibility into the supply chain.

note icon Businesses must stay informed about changes in laws and regulations. ERP systems have built-in controls to help prevent compliance errors and can even provide regulatory change updates.


7. Collaboration and communication

A business is nothing without collaboration and communication, and ERP systems are essential in this process. Due to the centralized platform and shared workspace, ERP systems provide improved information sharing and transparency. Ultimately, this leads to enhanced communication and coordination between departments and contributors. 


Members of the organization can also receive real-time updates on changes in orders and inventory levels, keeping everyone up-to-date on important matters. 


ERP helps improve communication with: 


  • Clear task management, allowing clear communication and collaboration on projects.
  • Integrated communication tools like email, messaging, and document sharing make collaboration between team members easy. 
  • Reducing silos between departments to promote collaboration and information sharing.
  • Keeping a record of communication makes it easy to track and understand how issues are resolved or escalated.
How ERP helps with business collaboration.

What is the most common pitfall of ERP implementation?

While they can undoubtedly help businesses and employees scale their business and improve efficiency, ERP systems do have some limitations. The cons of ERP can include:


  • Technical difficulties, including data migration, data quality problems, and data loss. 
  • Overestimation of benefits regarding cost reduction and business efficiency. 
  • Data quality issues include inaccurate, duplicate, or missing data. 
  • Need for complex IT staff for on-premise ERP options. 
  • Lack of employee buy-in can lead to reduced productivity and failed implementation. 
  • Insufficient planning can lead to deployment delays and unexpected expenses. 
  • Underestimation of the hardware, software, training, and IT support cost.

Do you need an ERP system?

ERP implementation comes with equal potential for business risk and reward. It’s a costly and time-intensive undertaking that should not be taken lightly. However, if you implement an ERP, your business could see significant rewards from an internal operations perspective and an external customer experience. 


Considerations when deciding whether you need ERP:


  • Business size and industry: What type of ERP will your business need? Will you need an on-premise ERP solution, or will you use a cloud option? 
  • Budget and ROI: ERP for small businesses are less expensive than enterprise-level ones but less complex and offer fewer customization options. Check if a small business software like QuickBooks Online is a better fit for your business.
  • Scalability and flexibility: ERP can grow with your business, and their modular architecture allows you to change them as needed over time. 
  • Integration capabilities: ERP can be integrated with accounting software, banking systems, and CRM systems to smooth the workflow.  
  • Customization options: Your ERP can be customized to match the specific needs of your business for total success. 
  • ERP disadvantages. Not every business solution is perfect. ERP can have pitfalls, including data quality issues and technical difficulties.

note icon ERP systems are not necessarily a one-size-fits-all solution. They come in different sizes with varying levels of complexity and IT needs. Evaluate your options before settling on your preferred ERP.


Navigate midsize business challenges and opportunities

ERP has many advantages that you can leverage to level up your business. Depending on the type of ERP you choose, you can improve your business’s data security, improve customer satisfaction ratings, and even increase productivity. With intuitive accounting software, your company can scale with add-on functionality that grows with your business.


If your business is more complex, consider Intuit Enterprise Suite, which helps you manage multiple entities and project-based accounting—all with tailored support.

Advantages of ERP FAQ


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