Enterprise Resource Planning (ERP) is a process used by companies to manage and integrate the important part of their businesses. Many ERP software applications are important to companies because they help them implement resource planning by integrating all of these processes needed to run their companies with a single system. An ERP software system can also integrate planning, purchasing inventory, sales, marketing, finance, human resources and more.
Important business benefits of ERP
- IT costs
- Business process efficiency
- A business process platform for process standardisation
- A catalyst for business innovation
ERP applications also allows the different departments to communicate and share information more easily with the rest of the company. It collects information about the activity and state of different divisions, making this information available to other parts, where it can be used productively.
Important – A company could experience cost overruns if its ERP system is not implemented carefully.
ERP applications can help a corporation become more self-aware by linking information about the production, finance, distribution, and human resources together. Because it connects different technologies used by each part of a business, an ERP application can eliminate costly duplicate and incompatible technology. The process often integrates accounts payable, stock control systems, order monitoring systems, and customer databases into one system.
Why some businesses are afraid to embrace ERP implementation
Despite all of the options out there, some companies are still hesitant about ERP. There could be many reasons why.
How do I know I’m choosing the right ERP software for my business?
You don’t have to find the perfect software solution to fix everything. ERP should actually be able to take the best of the business processes you’re using now and bring them together under one system, while letting everyone in your organisation view the same information.
We can’t afford a major ERP overhaul.
A solution doesn’t have to be an all or nothing implementation proposition. Software solution modules can be purchased separately depending on your business needs. This will help your team ease into the implementation piece of ERP and it will save having to invest in a major software renovation without knowing whether or not the functions you’re adding will pay off.
We don’t want to lose the systems we have in place now.
Any ERP solution you choose should work with what you’re using now but also include features that can help in your future growth. For instance, if the software you have mostly handles the financial supply chain, and manufacturing sides of your business, you may want to look for a solution that brings in a strong business intelligence component.
Advantages of ERP
- Can save money over the long run by stream lining processes.
- Provides a unified system that can lower IT related expenses and end user training costs.
- Enables greater visibility into areas of the business, such as inventory, that are critical for meeting customer needs.
- Enables better reporting and planning due to better data.
- Offers better compliance and data security, along with improved data, back up and the ability to control user rights.
Disadvantages of ERP
- Can have high upfront costs
- Can be difficult to implement
- Requires change management during and after implementation
Three signs you need ERP
The basics aren’t letting you grow
- Perhaps you’ve been doing fine with the basics, but if your current software is putting limits on your market expansion and ability to grow on a larger scale, it may be time for a system that does.
You’re dealing with disparate systems
- As technology changes you’re noticing that your disparate systems don’t work well together. You may notice that your new accounting software isn’t compatible with your old HR system, and you’re tired of wasting time and resources trying to stitch a solution together.
You can’t meet customer expectations
- If your staff and customers are mobile and your system isn’t accommodating them, its time to invest in one that meets everyone’s needs. If you feel like you can’t afford to invest in meeting your customer expectations, and you’re not willing to give your staff the tools they need to succeed, you’ll lose them to a competing business.