What exactly is ERP? What does ERP software entail? Dive into understanding the essence of ERP and its significance for businesses in this comprehensive guide.

You might have heard of ERP software for enterprises, but do you truly comprehend what ERP is? Explore its definition, functionalities, and benefits it brings to businesses in this enlightening piece.

Delve into the concept of ERP and ERP software, explore the advantages of using ERP software, and understand the basic functions and classifications of ERP software in Vietnam in this insightful article.

Unravel the mysteries of ERP: What does it entail, and what does ERP software encompass? Embark on a journey to discover the transformative effects of ERP software for businesses.

ERP stands for Enterprise Resource Planning, which means 'enterprise resource planning' in English.

ERP software automates the workflow of a company, enabling the establishment of a complex company system with various office chains encompassing functions such as accounting, sales, inventory, HR, planning, and production.

ERP software is a multi-module software that integrates all common functions of an organization into a single system.

Instead of using independent accounting software, HR and payroll software, production management software, etc., ERP software consolidates all these disparate software into one, ensuring seamless communication between functions.

Some renowned ERP software brands include OpenERP, OpenBravo, WebERP, ERP5, and more.

Basic functions of ERP software

An ERP software must encompass all business cycles of an enterprise, seamlessly integrating fundamental functions such as:

• Planning and budgeting


• Sales and customer management


• Production


• Quality control


• Inventory control, warehouse, and fixed assets


• Purchasing and supplier control


• Finance – Accounting


• Human resource management


• Research and development

Classification of ERP software in Vietnam

1. Classification based on investment cost

• Low-cost ERP software: These are ERP software in the form of websites, customized according to the company's requirements and needs. However, they come with high risks, prone to additional costs, and lack high security.


• Mid-range ERP software: Designed and developed by large domestic deployment units. These software solutions can meet the needs of businesses to a considerable extent, but providers typically only build some modules such as financial accounting, sales, purchasing, inventory, instead of the entire ERP system.


• High-cost ERP software: These are foreign ERP software with high credibility and established processes, covering most modules and mainly targeting large enterprises. However, they may not necessarily be suitable for Vietnamese businesses.

2. Classification based on the supplier's brand

• Domestic ERP software providers

  These software solutions are tailored to suit Vietnamese enterprises, with financial and accounting processes easily manageable and compliant with current Vietnamese accounting standards. They also swiftly adapt to changes in domestic accounting regulations and policies.



• Foreign ERP software providers

  Foreign ERP software boasts extensive experience and successful implementation in numerous global enterprises. Built on advanced technology and standardized management processes, these software solutions excel. However, for ERP projects, besides licensing and deployment costs, enterprises also invest significant time and effort in ERP development and implementation.

Benefits of using ERP software

When enterprises opt for ERP software, they gain numerous benefits that ERP software offers.

• Enhanced labor productivity.


• Improved control over inventory limits, accounts payable, expenses, revenue, profit, alongside the optimization of resources such as raw materials, labor, machinery, just enough for business operations.


• Consolidated, comprehensive, timely information that can be shared with all relevant parties such as customers, partners, shareholders.


• ERP streamlines business activities according to professional processes, aligning with international standards, thereby enhancing product quality, cost savings, profit increase, competitiveness, and brand development. Additionally, ERP helps enterprises better adhere to international standards.

Although there are numerous benefits to using ERP software, implementing ERP is not simple. Enterprises need to meet several conditions to successfully implement ERP, such as:

• High awareness and determination from the business leadership.


• Accurate identification of goals, scope, and implementation steps.


• Selection of appropriate solutions.


• Selection of the right implementation partner.


• Effective collaboration with the implementation partner throughout the project.


• Readiness to change existing inefficient processes within the enterprise.


• ......

Here, Mytour has shared the concept of ERP systems and ERP software with you. Hopefully, through this, you will have a better understanding of ERP software to decide whether to use ERP software systems or not. Wish you success!