What is an ERP system?
According to Investopedia,
Enterprise resource planning (ERP) is a process used by companies to manage and integrate the important parts of their businesses. Many ERP software applications exist to help companies implement resource planning by integrating all of the processes it needs to run a company with a single system. An ERP software system can integrate planning, purchasing inventory, sales, marketing, finance, human resources, and more.
Investing in ERP software can help enterprises improve business performance and automate certain processes of an organization. It is estimated that ERP software market will be worth $41.69 billion by the year 2020. The figure is surely impressive, but deciding which technology your business should invest in is hard when there’s a sea of new technologies emerging every day. To stay on top of the game, it is important for business owners to seek out each and every tool in the market. And ERP systems are no exception.
ERP solutions help you collect, store, and manage data from various units of a business. It can eliminate data duplication and provide integrity since it collects an organization’s shared data from multiple sources.
Let’s discuss some reasons your business needs an ERP system.
Better Accounting & Improved Productivity
It is important to keep track of your financials in order to determine success through a growth phase. However, it is not an easy task especially when your company is growing exponentially. The complexity of transactions increases and it becomes hard to manage them without a centralized system.
Data entry tasks can be quite tedious. According to Smartsheet report, 40% of the workers spend a quarter of their week doing repetitive tasks. With the help of the right ERP solution, you can automate boring tasks. ERP systems can keep track of your transactions thus avoiding the need for repetitive data entry work which is subject to human error.
This saves a lot of time for your workers and improves productivity. It also increases the visibility of the operational data with a centralized platform.
With a centralized database, the analytics and reporting of your business can be improved. ERP software is an amazing business intelligence tool that records all the input data. With the help of ERP software, generating reports become so much easier. What needs to take several days of research could be done within a matter of minutes with an ERP.
With ERP systems, you get a customizable dashboard. Executives can see all the reports just by logging into the system. From income reports to expense statements, you have access to all the reports with a single click. This can help you gain better insight and allow you to make better decisions. You don’t need to rely on anyone for these reports. Besides, you can specify access level to these reports so that only an authorized person can view company data.
More Savings & Standardization of Software
It is true that you will need to invest a large amount of money upfront to implement ERP systems and many business owners might think that this investment is more than they will ever be able to save. But that’s not true especially if you want your business to expand. You can get a great ROI with ERP systems.
First of all, an ERP system binds together various processes and systems that are fragmented in your company. Thus, it becomes easy for your staff to access data from one centralized system. The staff does not need to look out for a piece of information on various systems. Instead, they will be able to access the information they need instantly because data retrieval is so much easier on a centralized system. A unified system improves security as well.
Moreover, you don’t need to train your staff on several systems. This will not only reduce the amount of money spent on training, but it also reduces the logistic efforts involved.
Customer satisfaction is more important than ever. In this digital era, people rely on the internet for almost everything. If you want to have some food with friends, you search for the best restaurants around. This internet thing is big. Almost 84% of customers trust online reviews as a personal recommendation thus making customer reviews more powerful than ever.
It is clear that the customers look out for various factors to judge a local business. Therefore, it is important to keep your customers happy and satisfied. The best way to do that is to provide services centered towards your customers. ERP systems can ensure customer satisfaction in a number of ways. Most of these systems are equipped with the CRM tool. The tool has access to all the data across business functions.
An integrated CRM tool can provide you with all the necessary details of your customer such as billing info and order history. Thus, you can have a better understanding of your clients’ needs. It allows you to formulate your strategy and provide your customers with exactly what they want.
Stats & Figures
According to a survey, small businesses lose up to $420,000 per year due to miscommunication while large companies lose up to $62.4 million due to the same. Also, employees lose 40 minutes of their productivity each day.
ERP systems provide a lot of benefits to enterprises. Its implementation reduces operational cost by 14 percent while reducing administrative costs by 13 percent and certain improvements in other areas.
ERP is important for all kind of businesses no matter the size. From food chains to diamond jewelry store, restaurants, the aviation industry, just to name a few, all businesses can benefit from ERP software. Take the aviation industry, for example. It demands accurate and timely decision to enhance its efficiency.
The working cost is very high and it is very important for companies to keep track of all the transactions, refund details, customer data such as order history, airline miles, reward points, and more. Data security, multi-currency accounting, inventory management, real-time data, MIS reports are some of the features of the ERP system which makes it suitable for the aviation industry as well.
Here are some of the major ERP providers:
SAP ERP is one of the leading enterprise resource planning software developed by a German company SAP SE. It serves 335,000 clients across 180 countries. SAP ERP provides access to analytical apps, key data, and other important tools to help your business succeed. It is equipped with the CRM tool, supply chain management, financial management, human capital management, etc.
Since it is widely used by businesses, a lot of people are beginning to learn SAP. But as a beginner, it is important to have a knowledge of Business processes, SAP acronyms, and project concepts.
Netsuite ERP provides ERP solutions to mid-sized to large enterprises which are growing at a fast rate. It is a complete and scalable ERP solution. Using Netsuite ERP, you can automate various processes such as revenue management, billing, financial management, order management, etc. You get a centralized solution for your company and its combination of Business Intelligence and financial management operations make it stand out from the rest.
Microsoft Dynamics GP
Microsoft is the leading software vendor in the world in terms of revenue. Microsoft Dynamics GP is an ERP software that helps SMBs to better manage its supply chain, finance, billing, etc. It allows businesses to work smarter at faster speeds. Dynamics GP is available in North America, the UK, Singapore, Australia, New Zealand, South America, and a few other countries with partner supported localizations. Small and medium-sized businesses can save on IT infrastructure costs since it takes advantage of the cloud.
Some other ERP Software Companies:
- Oracle ERP Cloud
- Sage Intacct
- Epicor ERP
For most companies, the advantages of ERP systems far outweigh its implementation cost. But be sure to do your research before investing in an ERP system. Hopefully, you will be able to increase Return on Investment and save a lot of money your business is losing due to miscommunication or other mistakes that can be avoided by ERP systems.