What is ERP? A comprehensive guide for starters.

What is ERP and how can your company benefit from it? Everything you need to know about ERP systems, features and key benefits.

business hacks what is erp
Elisabeth Büschler

An increasingly important factor in business is speed. Given the complexity of all the processes within your business, it is difficult to perform these without assistance. ERP can help you streamline these processes individually to create one well-oiled machine.  

What is ERP?

ERP stands for Enterprise Resource Planning. 

 It’s a piece of software that aims to streamline your business processes by optimizing your resources and organizing these to best suit your business needs.

 The main resources are capital, employees, and machinery. ERP software’s main goal is to optimize how these resources are used. By ensuring resources are used in the most effective and efficient way possible the goal is to minimize loss and maximize profit for your company. 

 Here’s what you can expect from the implementation of ERP software:

  • Improved organization of your company’s procedures
  • Faster adaptation to changes in your business or the market
  • Overall optimization of processes in your business

ERP software allows your company’s management to have a better overview of all business processes to provide a clear picture and efficient use of resources. 

What are the functions of ERP software?

The overall function of ERP is to support management in their daily tasks, speed up processes, and improve the organization of all parts of the business.

By closely analyzing all the small parts that make up your business, ineffective business processes can be identified and individually optimized. 

This means you can find quick countermeasures for issues affecting the whole company, a business area, a department or even an individual process. 

Where can you use ERP in your business?

ERP software is very useful for the following business areas:

  • Sales and Marketing
  • Customer Relationship Management (CRM)
  • Master Data Management
  • Production
  • Logistics
  • Research and Development (R&D)
  • Human Resources
  • Controlling and Finance
  • Payroll and Accounting
  • and many more

Here are  a few examples of Xentral’s ERP software to give you a better idea of how you can use it in your business. 

ERP in Logistics

With ERP you can easily connect with many delivery services such as UPS or Hermes. This allows for smooth delivery with more control and a better overview of the whole process. 

Automated receiving and sorting of merchandise also falls under the umbrella term ‘Automated Logistics’, which is an important part of many businesses. By combining and optimizing these processes you will save lot of time and effort. 

ERP in Finance and Controlling

You can keep a clear and organized overview of your ingoing and outgoing payments with ERP. Payments to business partners can also be automated, giving your team more time for other tasks. 

ERP in Sales

If your company is heavily focused on sales, Xentral’s ERP system can offer you a multichannel tool where you can combine all your distribution channels. 

You can also organize all communication by automatically sorting all calls, e-mails, and activities by client. 

This is just the beginning, Xentral’s ERP system can offer you many more functions!

We offer an extensive array of functions for you to choose from, and you can decide for yourself which ERP features will be most useful to your business.

Why a lean ERP might work better for you than SAP?

A very valid question is why you should choose our ERP software instead of one from SAP. 

The answer depends on your business, its size, and your vision. 

SAP’s ERP tends to be aimed towards larger businesses with a broader target audience. 

SAP might not be right for your business if you:

  • Just launched a start-up
  • Are a small or medium sized enterprise (SME)
  • Have a niche offering for a small target audience

Given the heavy involvement ERP software will have with your business it’s vital to choose the one that is best suited to you. 

SAP software tends to be significantly more expensive than other ERPs, meaning you’ll be paying more for software that may not be specifically geared to your business type. 

A lean ERP is not only less expensive but can also be easily tailored to match your specific business needs. 

Choosing the right ERP means you’re only paying for features you really need and use. 

Who is ERP suited for?

It might still be unclear which ERP software is best for you as parameters such as size and target audience can be quite vague. We have put together a few questions you can answer to help you decide what kind of ERP software might be suitable for your business:

  • What are your goals – fast growth or concentrating on a market niche?
  • Which of your business areas might require ERP software?
  • Which tools are you using in your business already and what interfaces must therefore be available from an ERP?
  • Do you want to integrate the ERP into your systems, or should it be a Cloud provider?
  • Should you buy or rent ERP?
  • Do you need a licensed solution or an open-source ERP solution?
  • How much support would you like from your ERP provider? 

The answers to these questions should help you make a list to decide which ERP solution is best for you and your business.

It’s worth doing more research into these points and comparing several ERPs to find the one most suited to your business.  

We have collated a short summary of the pros and cons to hopefully help you decide on the right ERP for you.



Less extensive than larger ERP software solutions (e.g. SAP)

Depending on the provider there could be high costs when purchasing this software

Functions can be tailored to your business needs

Depending on the complexity of the system it may take a while to train your team and optimize business procedures

All-in-one tool for nearly all business areas

Possible resistance from employees to adopt the system

High system flexibility (e.g. business growth)

Dependency on a system may lead to costs down the line

Individualized support from the provider

These pros and cons are, of course, dependent on the software provider, so it’s worth doing your own research.

Many ERP software providers will consult with you and advise you if their software is the right fit. 

Many will also provide a free trial version of their software. You can test Xentral’s software for 14 days free of charge before deciding to purchase.

Your perfect ERP software is ready – are you? If you want to know more about ERP or Xentral itself, please visit our website or blog!


With Xentral, we have combined and simplified many steps in our processes.

Want to learn more about Xentral ERP?

See for yourself and check out our free trial and see if Xentral ERP is the right fit for your business.

ERP explained: cloud, on-premise, hybrid

ERP solutions can be implemented in different ways. You have the choice between cloud solutions, a hybrid ERP system or an on-premise solution.

Cloud ERP

A cloud ERP (also known as SaaS ERP) enables companies to use ERP software via the internet. The software is hosted and managed decentrally by the provider in a cloud. Cloud solutions offer companies flexibility and scalability and do not require internal server infrastructures.

Hybrid ERP

As the name suggests, a hybrid ERP system combines cloud and on-premise functions. Some data and applications are hosted in the cloud, while others are managed locally on your own servers. Hybrid ERP is suitable for companies that have specific requirements, for example in terms of data protection or integration with existing systems.

On-premise ERP

On-premise means that the system is installed and managed on local servers. The company must therefore take care of maintenance itself, which requires extensive IT resources. However, this also means that you have full control over the system and the data processed on it.

Which solution best suits your company depends on your individual requirements. A cloud ERP system is ideal for small and medium-sized companies with limited IT resources. Hybrid and on-premise solutions are ideal for large companies.

9 features your ERP-solution should have

A powerful ERP system should offer a comprehensive range of features to effectively support the needs of your business. Here are the 10 most important features an ERP system should have:

  1. Financial management: comprehensive accounting, invoicing and financial reporting tools.
  2. Materials management: Efficient management of inventory, orders and supply chains.
  3. Production planning and control: Integration of manufacturing processes for smooth production.
  4. Sales and CRM: Customer relationship management and order processing.
  5. Business intelligence: Analytical tools for data evaluation and process optimization.
  6. Mobility: Access to the ERP system from different devices for a flexible working environment.
  7. Integrations: Seamless connection to other tools and external systems.
  8. Ease of use: Intuitive user interface and user-friendly processes for ease of use.
  9. Data security: Robust data security to protect sensitive company data.

These features ensure that an ERP system meets the current needs of your business and provides the foundation for future growth opportunities.

ERP: Where will the future take us?

Enterprise resource planning systems are evolving and adapting to the increasing requirements of companies. Innovative technologies such as AI and machine learning also play an important role in this. These trends will play an important role in the future and enable even more precise data evaluation and process optimization.

Mobile ERP applications are also gaining in importance and promote the flexibility and mobility of employees. The cloud remains a key factor here. More and more companies are turning to cloud ERP solutions to ensure agility and scalability.

ERP providers are expected to continue to drive the development of customizable and user-friendly systems that can be seamlessly integrated with other technologies. Companies that align their enterprise resource planning with these trends will be well positioned to succeed in the future.

Xentral ERP - All business operations in one tool

Xentral ERP offers a customized solution for small and medium-sized companies. Our software enables your company to simplify complex processes - from procurement and warehouse management to sales and fulfillment, Xentral offers an intelligent solution that is tailored to the needs of SMEs.

Find out how Xentral can help you optimize your business processes and make your company successful.


We have now our complete logistics and warehouse management under control. Also our accounting, dunning, master data management and procurement.

Dana Francksen

Head of Marketing & Sales

Die Stadtgärtner Logo

Discover the features of Xentral ERP

Try it out for yourself and use our free trial version to discover all the features and benefits of Xentral.

FAQs about Enterprise Resource Planning

Who needs an ERP system?

Companies of all sizes and industries can benefit from an ERP system. The software helps to optimize processes by centrally managing departments such as accounting, purchasing, sales and production. An ERP system is particularly relevant for companies that want to increase their competitiveness and optimize their business processes.

How long does an ERP implementation take?

The duration of implementation depends on the complexity of the requirements. Smaller companies are often ready to go in a few weeks or months, while large companies often need several months for implementation.

What is an ERP system?

An ERP (Enterprise Resource Planning) system is a software solution that helps companies to manage their business processes efficiently. ERP software bundles various functions for accounting, sales, production and more on one platform.

Profile Picture
Elisabeth Büschler
She is passionate about innovative brands and content - which is why Xentral, with its more than 1,700 start-ups and SMEs, is the perfect place for her. Her motivation is to take the Xentral community to the next level with helpful content.