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What Is An ERP Solution And Which Companies Benefit From Having One?

By TrendsTechBlog , in BUSINESS TECHNOLOGY , at February 11, 2021 Tags: ,

Enterprise resource planning, or ERP, is a type of business management software that helps organize and manage workflows. It combines a company’s main processes into one consolidated system. This allows businesses to manage functions through the use of a more user-friendly and organized data visibility system. Although commonly used in supply chain management and distribution, ERP solutions can be beneficial to a variety of businesses within many industries. ERP uses advanced technologies like machine learning and AI, and the differing options are often customizable to best meet a business’s specific needs and goals.

ERP Modules Include:

Human Resource Management- ERP can help manage timesheets, job profiles, employee records, performance reviews, and payroll. This module may also include a training function.

Financial Management- This module covers the flow of money and tracks transactions like bank statements, receipts, balance sheets, budgeting, and tax management.

Purchasing- This is where information and data regarding vendor and supplier relations is stored. It’s useful in receiving, recording, and analyzing quotes, while also creating purchase orders and updating related reports.

Sales and Marketing– ERP can help manage quotations, orders, pending orders, invoices, drafting, and taxation.

CRM- This module can help businesses achieve higher customer retention by improving customer relations. This is where companies can get to know their customer through purchase history data, communication history, and details of the customer’s interactions with the business.

Manufacturing – This module helps businesses increase efficiency in the engineering and production departments. It includes functionalities like production planning, scheduling, materials sourcing, production monitoring, and production forecasting.

Inventory- This module uses serial numbers and other product-specific identifiers to keep track of a business’s goods. It can help a company reach inventory goals and plan for replenishments.

Supply Chain Management- This module helps manage the flow of product from the initial stages of production to the final stages of consumer delivery. It can also help manage and track returns.

Benefits Of ERP Solutions Include:

Decreased Risk- Many manual processes can be automated with ERP software, decreasing the possibility of human error and data confusion. Increased visibility and control also allows for industry-specific standards and requirements to be upheld.

Increased Productivity- By streamlining processes and reducing risk, data and insights can be organized and analyzed faster with less resources and more reliability. This also allows employees to work more efficiently as all of the information they need is available in one location. Thus, they only need to be trained on one system, helping to eliminate confusion and error.

Simplified Processes- Through the use of user-friendly interfaces, more people within an organization can access and contribute to workflows, which can then help increase and improve collaboration.

Easier Reporting and Improved Analytics- By centralizing a business’s data, ERP can help to quickly generate reports and compile data that would otherwise require detailed research and time that a company may not want to invest in reporting. Many aspects of ERP can be customized to speed the process up even more.

Faster Insights- Through streamlined processes, employees and business owners no longer need to rely on one department to compile and share necessary reports. Instead, they can access them through the centralized ERP system. This means that informed business decisions can be made faster.

Disadvantages Of ERP Solutions Include:

Cost- Installing and implementing ERP solutions can be expensive. It’s important to speak with a specialist to identify what outcomes you want to achieve and identify how the proposed solutions can help your business in the long run. In addition, it is vital to find a verified professional. For instance, if you are looking for Microsoft solutions you should look at their Gold Partners before hiring a Microsoft consultant to help with the transition.

Time- The benefits of an ERP system may take months or years to show their value. Keeping the larger goal in mind can prove helpful when waiting for the results to show.

Trust- Some business owners may be hesitant to share information between departments. Although many ERP solutions offer the option of having different access levels to control who can access what data, a level of trust may be needed to initiate the process.

Training- If your company has been using the same software, processes, and workflows for years, the initial training process may prove difficult. Even if the new system is more streamlined, you can expect a period of adjustment as employees learn the new system. However, it can be beneficial to welcome employee feedback during this time as there will likely be some bugs to work out in the initial stages of implementation.

Types Of ERP:

Generalist ERP- This version is popular among many industries because it is highly customizable to meet specific business needs.

Open-Source ERP- A small niche of ERP, this software is often sought after by those who are looking for developmental collaboration. It allows the core software to be customized and modified by developers, often making the system more beneficial to the company and easier to use.

Vertical ERP- This version is more industry specific and is generally used among smaller businesses focusing on a niche.

Small Business ERP- This type of software can be purchased off-the-shelf, eliminating the need to hire developers. It’s effective for businesses looking to streamline general processes with few employees.

If you’re interested in adopting an ERP solution but aren’t sure you need one, you can ask yourself a few questions. Are your business’s manual processes creating time-consuming duplicate data entry? Have you lost out on business opportunities because you either couldn’t identify them or were too busy running your business to explore them? Are there questions on your business that you simply can’t answer?

Speaking to a specialist may help you identify what areas of your business can benefit from ERP, and the options that are available to you. It may help to make a list of the goals you want to achieve, and create a timeline in which you want to accomplish those goals. Whether you run an outsized or small company, ERP solutions are often customized to suit your needs and needs. You can also do some industry-specific research to learn how similar companies have integrated ERP into their business operations, and consider the pros and cons of their approach in relation to your business.

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