As manufacturing grew more complex, companies needed to plan material supply in advance. MRP systems enabled more accurate inventory management and helped prevent production stoppages and overstocking.
An enterprise resource planning (ERP) system is a comprehensive business software solution that makes a company’s operations trackable and controllable end-to-end. It manages all data and processes in one place, reducing manual work and errors and giving much clearer visibility into how the business runs.
Generally, these comprehensive, packaged software solutions are called enterprise resource planning (ERP) systems, which integrate an enterprise’s entire series of business processes and functions within a single information and information-technology architecture, thereby providing a comprehensive picture of the company as a whole. (Klaus, Rosemann and Gable, 2000, pp. 143–144)
An ERP system is an information system used for integrating all of an organisation’s activities. These systems are built on a unified IT platform that ensures the optimal flow of information between departments… They standardise, streamline and integrate business processes in the finance, human resources, procurement, sales and distribution, accounting and other areas, while all information is stored in a single database, facilitating the proper flow of information between departments. (Barna, Ionescu and Ionescu-Feleagă, 2021)
The first computer-based inventory management systems automated the recording of warehouse stock levels, replacing manual administration. This laid the digital foundations of corporate data management.
As manufacturing grew more complex, companies needed to plan material supply in advance. MRP systems enabled more accurate inventory management and helped prevent production stoppages and overstocking.
The next stage no longer focused only on materials, but also on aligning production capacity, labour and machine time. Bringing every element of manufacturing into a single system made resource utilisation much more efficient.
As different business areas – finance, HR, logistics and others – became increasingly interconnected, companies needed a single, shared platform. ERP systems delivered this integration by providing a common database and transparent, end-to-end operations.
For companies, optimising internal processes was no longer enough – they wanted closer cooperation with partners and customers as well. ERP II systems enabled online collaboration and the integration of customer relationships and the entire supply chain.
This new era is characterised by the fact that not every ERP component runs on-premise anymore: the database, the application server or parts of the user interface are moved to secure cloud infrastructure. These solutions make the system accessible remotely via a traditional desktop client or a web browser, while the company can still retain certain local resources.
In recent years, the use of enterprise resource planning (ERP) systems has grown significantly across Europe. This is confirmed by a 2023 Eurostat study, which shows that within the EU the share of companies using ERP systems increased by 5.4 percentage points over three years (from 37.9% to 43.3%). The penetration of ERP and other business software also varies strongly by country: Denmark (67%), Belgium (60%) and Sweden (59%) are at the top of the ranking, while Romania (12–15%) and Bulgaria (26%) lag well behind – the EU average is around 43% (Eurostat, 2024).
In Hungary, the rollout of enterprise resource planning (ERP) systems has accelerated significantly since 2020, although adoption still lags behind the EU average: it rose from 12.9% to 35.2% (Hungarian Central Statistical Office [HCSO], 2023). This increase of more than 170% clearly shows that ERP solutions are no longer the privilege of large enterprises, but have become SMEs’ digital response to economic challenges. While the vast majority of large companies have been using integrated ERP systems for many years, real uptake among SMEs has only begun in recent years, and micro-enterprises still typically rely on Excel and isolated, stand-alone software.
Behind the growth seen in Hungary there are deliberate incentive schemes as well. Government and EU grants support the digitalisation of SMEs: for example, under the GINOP+ programmes companies can introduce ERP systems and innovative business software with subsidies of up to 50–70%. These funding sources have helped make enterprise management solutions — once largely reserved for big corporations — much more accessible to smaller businesses, too.
The COVID-19 pandemic revealed that paper-based, siloed processes and non-integrated systems do not provide sufficient flexibility in a crisis. The rapid shift to online sales, remote work and handling supply chain disruptions required digital solutions offering real-time transparency, such as ERP systems. As a result, many companies accelerated their digital transformation and either implemented a new ERP or expanded their existing system.
After the pandemic, the general pressure to digitalise has intensified even further. Today, companies are being pushed towards integrated, digital operations from several directions:
Customer demands: a growing demand for fast, online and integrated service.
Supplier and partner relationships: data integration is increasingly expected (e.g. EDI, shared inventory records).
Regulatory environment: online invoice data reporting, integration with the Hungarian tax authority (NAV), and the EU’s Digital Compass 2030 objectives.
One of the main reasons ERP systems are so popular is that they turn data into fast decisions and a tangible competitive advantage:
Single, unified database: A financial, production, logistics and sales data all live in a single system, eliminating data silos and duplicate data entry.
Real-time, data-driven decision-making: Up-to-date reports and BI dashboards support managers, helping them react faster and with more confidence to market changes.
Automated processes and fewer errors: Automating inventory management, purchasing, invoicing and reporting reduces administrative workload and increases efficiency.
Measurable competitive advantage: More efficient operations, more accurate data and faster customer service directly improve the company’s productivity and market position.
ERP systems integrate and automate the activities of different departments – such as sales, purchasing, production, finance and warehousing. This reduces manual data entry and other repetitive work, increases process efficiency and lowers the likelihood of errors.
By optimising inventory and logistics processes, companies can minimise stockholding costs, improve service levels and reduce delivery delays. Using PDA devices (Android-based mobile terminals) makes it possible to automate internal material-handling tasks: training time is reduced, user errors are minimised and processes run faster.
Real-time data and reports enable company leaders to make faster, more accurate decisions. Information is easy to access and interpret, which supports strategic planning and the analysis of overall business performance.
With ERP systems, companies can manage their business data securely and stay compliant with legal and industry regulations. This is not only crucial for organisations working with sensitive data; it also protects them against internal and external threats such as data theft and ransomware attacks.
Flexible, scalable ERP systems enable companies to adapt to changing business needs and growth. Organisations that use their ERP effectively can gain a competitive edge in the market and are better prepared for changing conditions.
By making information sharing and internal communication easier, ERP systems improve collaboration across the organisation. This supports more efficient project execution, helps achieve business goals and has a strong positive impact on employee morale.
The ERP system you choose should be scalable and modular so it can easily adapt to your company’s growth and be built on modern, future-proof technology. It should include sector-specific functions tailored to your business, and the vendor must provide continuous support and training. A good ERP solution centralises your data, offers industry-specific modules, and can be extended flexibly. You should therefore select a system that coordinates your entire business operation in one place and is backed by reliable Hungarian-language support.
In most cases, the total cost of ownership (TCO) of an ERP implementation is recovered within 3–5 years, based on experience. At the same time, an ERP go-live can already deliver significant short-term benefits, such as faster processes and less scrap, making the investment worthwhile in the long run. The exact return on investment (ROI) depends on the size of the company, the number of modules implemented and the business goals you want to achieve.
In Hungary, tax and financial regulations change frequently, so you need an ERP system that can respond flexibly. Your implementation partner is responsible for keeping the system continuously updated or customised to meet legal requirements. Always check whether the ERP you choose includes Hungarian- language finance and tax modules, and whether the vendor provides all necessary software updates.
Regular training and clear communication are the key drivers of ERP user adoption. Invest time and effort to ensure every relevant employee understands the ERP system and hold regular refresher trainings on how to use it in daily work. You can appoint internal ERP champions or key users who support colleagues and make sure the software is used correctly. With visible management support and clear internal guidelines and process descriptions, trust in the system grows and the new ERP solution becomes a natural part of everyday operations.
Klaus, H., Rosemann, M., & Gable, G. G. (2000). What is ERP? [Mi az ERP?] Information Systems Frontiers, 2(2), 141–162. https://doi.org/10.1023/A:1026543906354
Barna, L.-E.-L., Ionescu, B.-Ș., & Ionescu-Feleagă, L. (2021). The relationship between the implementation of ERP systems and the financial and non-financial reporting of organizations [Az ERP-rendszerek bevezetésének kapcsolata a szervezetek pénzügyi és nem pénzügyi beszámolásával]. Sustainability, 13(21), 11566. https://doi.org/10.3390/su132111566
Eurostat. (2024, May 16). Large enterprises used more e-business applications [A nagyvállalatok több e-business alkalmazást használtak]. Eurostat. https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20240516-2
Központi Statisztikai Hivatal. (2023). Magyar statisztikai zsebkönyv 2023 [Hungarian Statistical Pocketbook 2023: Information and Communication Technology Data]. https://www.ksh.hu/evkonyvek/2023/magyarorszag-2023/pdf/magyar_statisztikai_zsebkonyv_2023.pdf