What Are ERP Systems & Why Your Agency Needs One

Data management, efficiency, financial management, security, collaboration, growth, automation, customer satisfaction, brand visibility… If you are running an agency in 2025, all of these things, and more, should be your concern.

Sounds like a lot, doesn’t it? And it is, there is no question about it. However, all those things, and more, can be summed up into three letters: ERP.

With enterprise resources planning (ERP) systems, consolidating all the data that is crucial to your organization is not only possible but necessary. According to the numbers from 2023, 37.9% of small EU enterprises were using ERP software, with the percentage going as high as 86.3 % for large enterprises.

From tracking your finances and streamlining your workflows to researching your customers and monitoring employee efficiency, ERP systems can do it all. To learn why your agency needs one, keep on reading as we explain all the ins and outs of ERP systems.

What Are ERP Systems?

Enterprise resource planning (ERP) systems are software used by companies, businesses, and agencies to automate, manage, and integrate the most important parts of their business and its processes.

An ERP system also ties together all of the computer systems and platforms you are using, including planning, marketing, finances, sales, HR, and time management tools, just to name a few. Without an ERP, each department would have its own system that is completely separate from systems from other departments.

ERP software enables you to access all of these separate systems through a single application, allowing all the different departments and teams in your agency to exchange information and communicate more efficiently.

Not only do ERP systems make it possible for data from one department to be used in a different one in a meaningful and productive way, but they also help your organization eliminate the issue of duplicate and/or incompatible technologies and software.

With that being said, let’s take a quick look at how ERP systems actually work.

How Do ERP Systems Work?

So, the ERP system integrates all the activities, data, and processes across your organization, with the goal of improving how your resources are used, without doing so at the expense of quality and performance.

While each ERP platform has its own unique traits, they all have some common characteristics, such as:

Thanks to the common database, an ERP system can easily compare metrics from different parts of your agency and generate detailed reports on business performance, allowing you to make better decisions, optimize productivity and resources, streamline processes, and save money for your agency.

Next up, let’s take a look at different types of ERP systems, which is one of the parameters you will need to look at when choosing an ERP system for your agency.

Types of ERP Systems

ERP systems can categorized using several different criteria, with the most common ones being size, deployment, and industry. Within each of these categories, it is possible to make even more granular distinctions, but we will stick with the basics this time.

ERP Types Based on Deployment

There are four common types of ERP types according to deployment:

• On-Premises ERP: This type of ERP system is installed locally onto your agency’s servers. It allows for extensive control, integration, and customization, but also requires dedicated IT resources for maintenance and security. This type of ERP requires you to buy a license.
• Cloud ERP: These ERP systems are SaaS products that are accessed online. They allow you to adjust and scale features and resources without having to invest in hardware or staff. Cloud ERPs usually follow a subscription-based pricing model.
• Hybrid ERP: A combination of two previous models, as it uses on-premises ERP hardware with the scaling ability of cloud ERPs. These are used by companies with very specific needs, or those which have to abide by strict regulatory requirements.

• Multi-cloud ERP: This type uses integration to tie together multiple third-party apps and services with the ERP system.

ERP Types Based on Industry

Based on the industry they are designed for, there are two types of ERPs:

• Generic ERP: This type is very versatile and suitable for a wide variety of industries, and features a large of functionalities as a result, with the ability to install additional ERP modules. However, customizing these ERPs to fit a specific niche can be expensive.
• Industry-specific ERP: These ERPs are designed to fulfill the needs of a specific industry and its processes. They offer the same basic functionality as generic ERPs, but also more specialized features and workflows.

ERP Types Based on Business Size:

Based on business size, we are looking at three types of ERPs:

• Small business ERP: These ERPs are designed to meet the basic needs of smaller organizations, and are usually cost-effective and easy to use. For example, ActiveCollab is ideal for consultancies, agencies, and professional services that need powerful features that won’t break the bank.
• Midsize business ERP: This type offers more in terms of features, functionalities, analytics, integration, and automation. It allows companies to grow, while still keeping the budget and resource requirements at a reasonable level.
• Enterprise ERP: These ERPs are designed to handle a huge range of very complex processes in large enterprises, while adhering to regulations and sharing information not just across different departments, but locations as well. Enterprise ERPs offer a high degree of customization.

Choosing the right ERP system for your business is going to depend on a number of factors, such as the size of your business and your industry. But, since, we are talking about agencies here, cloud ERPs are usually the way to go.

9 Reasons Why Your Agency Needs an ERP System

To save you the suspense: yes, your agency does need an ERP. There are simply too many benefits and very few cons for you to pass up the opportunity to make your agency perform at its best.

Here are 9 reasons why you should consider implementing an ERP system in your agency:

1. Visibility

When you are running an agency or managing your own business, making decisions on a daily basis comes with the job. And in order to make good decisions, you need data and info, which can be quite a challenge if you are trying to collect it manually.

With ERP systems, however, you get to have all the relevant and up-to-date data you need. And because all ERP systems worth their salt have powerful analytics and reporting tools, generating detailed reports is incredibly simple and easy.

Having an ERP system in place also enables your team members to do their jobs better. With more accurate real-time information, they can provide the best possible service for your client, whether it’s content production or customer support.

2. Automation of Manual Workflows

You will probably agree that a lot of the daily work you do is actually manual busy work, such as answering emails or digging through Excel spreadsheets in order to extract a piece of info you need.

It would be great if you could have someone else do it for you, but since most agencies are on a limited budget, that’s not an option. The solution? Automation.

Implementing an ERP system into your organization enables you to not only automate menial tasks and save time and money, but also reduce the probability of human error in the process. Automation frees up your agency’s resources for more important and creative tasks.

3. Data-Based Insights

One of the most obvious ways to determine if your agency needs an ERP system is to gauge your organization’s data needs. Do you make a lot of data-based decisions? Do you do extensive customer and market research? If the answer is yes, having an ERP is a no-brainer.

ERP systems are actually specialized for this sort of thing, which is collecting, managing, and storing data, and then enabling various departments in your agency to access it and use it in a meaningful way. All of this is possible thanks to its centralized database.

4. Better Efficiency

Another telltale sign that your agency needs an ERP system is if your team is struggling with efficiency. Now, as we have pointed out previously, this can be due to all the repetitive tasks you and your employees need to do during the day.

But, it’s also down to how your agency utilizes technology and optimizes its processes. For instance, if your agency’s departments are completely separate from each other, you may find that they are following some of the same processes, which leads to duplication.

ERPs can help streamline your workflows and consolidate your tools, so your team members don’t waste time doing the same things multiple times or re-entering data that someone has already entered.

5. Improved Collaboration

As your agency starts to grow, it can become increasingly difficult to ensure that every single member of your team is on the same page. Crucial bits of information can easily fall through the cracks, and all of a sudden, your marketing, sales, and content teams are totally out of sync.

And that goes double if you are managing a team that is spread across several locations and working remotely. With an ERP system in place, you make all the relevant information available for everyone at any given moment.

As a result, everybody has all the right info when they need it, communication continues without a hitch, and better and faster decisions can be made.

6. Too Many Systems, Tools, and Spreadsheets

If you are struggling with:

Then yes, your agency does need an ERP system ASAP.

Old legacy software that is no longer supported or updated, mountains of spreadsheets you need to dig through in order to find the right information, and simply having too many tools that are not only costly but also lack the features that your organization needs, etc.

Dealing with just one of these is problematic enough, but if your organization is ticking several of these items, implementing an ERP system is a must.

And we know that those systems can be hugely expensive and complex, and may indeed be overkill for small agencies. However, with a platform like ActiveCollab at your disposal, your agency gets all the ERP functionality it needs at a fraction of the cost.

ActiveCollab can help you keep track of all the relevant data that comes in and goes out of the organization, including your finances.

Apart from using it to generate reports and send out invoices, you can take your team’s productivity up a notch with ActiveCollab’s time-tracking, chat, and project management features, more of which can be seen in this video:

7. Adaptability and Growth

If your agency is growing at the moment, or if you are planning on scaling your business in the near future, an ERP system can support that growth, whether we are talking about an increase in the number of employees, production, or data volume.

As an agency, you won’t have to worry about stuff like eCommerce, supply chain management, or inventory, but you should at least have an ERP system like ActiveCollab that is able to provide your agency with financial management features.

And because ERP systems are modular, you can add new modules to support industry-specific requirements and business functions, as well as respond to changing market demands.

8. Customer Satisfaction

Seeing as ERP systems often include CRM features and functionalities, having one can help your agency keep track of all the crucial customer information, your interactions with them, minutes of meetings, notes, as well as orders.

You also get:

When you put all of these together, you can provide superior customer service, resulting in increased customer satisfaction and clients that will keep coming back for more.

9. Lower Costs

This one is more a consequence of all the previous points. If you have better communication, the right tools, and add a degree of automation to your processes, you will have an organization and employees that is much more efficient, which saves you money in the long run.

However, this is not the only way in which an ERP system helps you save money. For example, most ERP platforms will alert you in case your team is going over budget, as well as provide a system report that identifies the culprit.

Even if your team is sticking to the budget, an ERP can zero in on processes that are redundant, which saves you both time and money.

Challenges of Implementing an ERP System for Agencies

While the benefits of ERP systems far outweigh the cons, there are still some potential challenges you need to be aware of when implementing an ERP into your agency:

Cost And Effort Required

Large enterprise-grade ERP systems are not cheap, plus they are extremely complex to use. However, given that you are running an agency, a platform like ActiveCollab can provide you with similar functionality at a mere fraction of the costs.

Skills Gaps

Given the complexity of ERPs, there is somewhat of a large learning curve associated with these systems, which slows things down for a period of time until the team members learn how to use an ERP.

This doesn’t bode well for efficiency, plus there is a correlation between ERP implementation and employee turnover, as some employees don’t like the additional new responsibilities.

The solution is to provide sufficient training for your employees, or to opt for a user-friendly and streamlined platform like ActiveCollab, which has a short learning curve.

Integrating Too Many Things at Once

If you are in a rush to manage all of your processes within an ERP, think again. Again, keep in mind that your employees are properly trained and they have time in their schedule to actually take on such a demanding feat.

A better approach would be to establish a moderate timeline and integrate your options gradually. With ActiveCollab, you can streamline the integration process and have your team up and running in no time.

Securing Upper Management Support

ERP integration is complex enough by itself, so it’s essential that you have the backing of upper management before proceeding with the process. Getting your managers and stakeholders to support the idea is the only way to realize the full potential of ERP integration.

Resistance To Change

Despite all the obvious benefits of ERP systems, the hard truth is that people don’t like change, especially in their professional lives, so you can expect a certain degree of resistance from your team, especially if they don’t understand how integrating an ERP system fits into the bigger picture.

Make sure to explain why having an ERP matters and train your employees to use the software before actually implementing it. ERPs are designed to make their lives easier, not harder.

Choosing the Right Vendor

Before deciding on such an important piece of software, you need to narrow down your selection first and then vet all the vendors and see if the solutions they offer are the right fit for your business.

ActiveCollab is designed for the needs of agencies, and our staff features experts with agency experience, so they know all of your needs and pain points.

Conclusion – Leveraging ActiveCollab as an ERP System for Your SME Agency or Consultancy

In the past, ERP systems were strictly reserved for large enterprises and companies that needed a reliable way to manage their data, save time and money, improve the flexibility of their organizations, and streamline their workflows.

Nowadays, these solutions are more affordable and accessible than ever and integrating one will help your agency make better informed, data-based decisions, become more efficient, and provide a superior service to your customers.

With ActiveCollab, your agency can start reaping the benefits of ERP features without a lengthy and costly implementation process.

To learn more, sign up for our 14-day free trial, or book a demo, and our experienced representatives will show you exactly why ActiveCollab is the right ERP solution for your agency!