Managing a business today is no easy task. You have to handle the workforce, finances, sales, inventory—the list goes on. The good news is that there’s software to help.
Enterprise resource planning software (also known as ERP software) allows you to optimize business processes like accounting, human resources (HR), and customer relationship management with a single platform.
Now you know why the ERP market is taking off like a rocket ship. In fact, the total market size is expected to exceed $49.5 billion by 2025.
If you’re thinking about implementing a new ERP system or want to evaluate if your current solution is still cutting it, you’ve come to the right place. There are many different reasons to invest in an ERP system, and we’ll break them all down for you. We’ll help you answer these questions:
- What are the benefits of ERP?
- What are the features and capabilities that will improve business processes?
- How will an ERP system support business growth in the future?
What is ERP Software?
First, let’s start with an overview. Enterprise resource planning (ERP) refers to software that manages a wide variety of business processes for an organization. It centralizes data and information to support different business operations. Combining a company’s data from multiple sources can eliminate data duplication and provide a single source of truth for data integrity.
ERP software can benefit businesses of all sizes in every industry. According to research, manufacturers are the number one user of ERP software. Companies find it vital to operations and think of it as the backbone of their business.
Capabilities of an ERP system
ERP systems tie together a multitude of business processes and enable the flow of data between them—helping teams be more collaborative. Here are some of the day-to-day business activities an ERP solution can manage:
- Accounting and finance
- Human resources
- Inventory management
- Customer relationship management
- Supply chain operations
- Distribution management
- Risk management
- Regulatory compliance
Enterprise Resource Planning Advantages
There are many benefits of ERP software solutions. Organizations surveyed on the return on investment (ROI) of ERP systems said the top three answers were reduced IT costs (40%), reduced inventory levels (38%), and reduced cycle time (35%). Beyond ROI, there are many other benefits of ERP.
Benefits of ERP Solutions
Here are just a few of the main ERP advantages for your organization.
1) Data Security
Data is like gold for businesses—and securing the crown jewels needs to be a top priority. ERP software can help you protect your most important assets in several ways.
First, an ERP solution takes data from multiple systems and unifies it into one place. So instead of data in different places with varying degrees of security, you can increase the level of protection in one place for all your data.
Second, cloud ERP systems can add another layer of security—especially for that ever-so-important customer data. Without having your data spread across multiple remote servers, you’ll have enhanced data security.
2) Regulatory Compliance
Enterprise resource planning systems give organizations accurate, real-time records so that they can reduce the manual work required to comply with today’s regulations. On top of that, your auditors will have access to customizable reporting to provide visibility across the organization.
Staying compliant can be a challenge, especially for highly regulated industries like manufacturing. ERP systems will make the job much simpler, ensuring your company stays compliant.
3) Enhanced Customer Relationships
A competitive advantage in today’s market is superior customer service. A modern ERP system can help companies deliver on that promise by unifying all the customer information in one place. With real-time data on orders, support cases, and contact details, you can deliver personalized experiences to build better customer relationships.
4) Cost Savings
One of the biggest benefits of ERP is how much money the tool can save your organization. For starters, the automation you can deliver will help reduce, if not completely remove, administrative tasks that take your employees away from work that drives growth.
The visibility an ERP system brings will allow you to spot inefficiencies across the organization. It will also help you keep projects on time and on track so they don’t chip away at the bottom line.
ERP systems remove siloes and allow teams to operate with a single source of business data. With visibility across teams, your staff can work more collaboratively, which enhances productivity.
Rather than decision-makers gathering mission-critical information from disparate systems, employees will have one centralized system with accurate data to make more informed decisions that improve the overall business.
ERP solutions are designed to work for any size company. Therefore, if you have goals to grow, your ERP solution can grow with your company. Cloud ERP systems come with the most scalability features. Since you don’t have to manage servers with cloud systems, you can add additional resources quickly. That means less work for your overworked IT teams. You can also expand without having to hire new staff.
Mobility has changed everything from the way we shop to work. I’d bet you’re likely reading this blog post from your smartphone. Today’s employees want convenience and mobility. They’re used to working from smartphones and tablets instead of desktops.
Modern ERP software is mobile-friendly, and many functions, like accessing reports and dashboards, can all be done from a mobile device. This is especially important for companies with workers in the field or traveling for business. With a mobile ERP system, work doesn’t have to stop.
8) Increased Efficiency
An ERP implementation will result in significant efficiency across the company. That’s because everyone uses it—human resources, financing, recruiting, sales, marketing, and even up to the C suite. The automation we keep mentioning will reduce time-intensive processes, save time, and allow you to focus on growth.
Think of a retailer who sells hundreds of products. Using their ERP system’s data, they can run reports to determine their least to highest profitable products. You can even take it a step further to determine the labor and manufacturing costs to find the products with the lowest margin. Analyzing data within your ERP allows you to make business decisions that can save money and drive profits.
9) Improved Demand Forecasting
Forecasting helps companies predict issues, plan ahead and analyze the impact of business decisions. Forecasting relies on historical data to predict future demand, revenue, and expenses, among other business metrics.
With an ERP system, you’ll gain more accurate forecasts since data is analyzed from one centralized system instead of disparate systems. In the end, improved demand forecasting will help you increase profits and reduce costs.
10) Risk Management
ERP software can also handle risk management by offering internal controls and audit tools to protect companies from internal and external theft and fraud.
11) Better Business Insight
ERP solutions offer a wealth of data and reporting across all business functions. There are endless ways to measure and track performance, even the most complex data requests.
That’s because ERP solutions are pulling from accurate data. You can’t rely on stale, outdated numbers to report metrics as critical as revenue. Analyzing data with real-time information is vital in today’s fast-paced world.
12) Supply Chain Management
Enterprise resource planning tools play a key role in supply chain management by managing each step of the process. With an ERP system, you can have real-time tracking and reporting of orders. You can also save on operational costs by automating supply chain operations. An ERP system can even help you adapt to ever-changing supply chain laws.
13) Support for Long-Term Growth
An enterprise resource planning system is designed to work with companies of all sizes, meaning it can support your business through any growth.
This flexibility allows you to customize the system to meet your needs today and tomorrow. And as the business evolves, you can make new system requirements. By future-proofing your ERP platform, there’s no need to replace it down the road.
ERP Software Selection
Once you’ve analyzed the benefits of ERP, you need to consider what type of ERP software is right for your unique business needs. There are many different ERP vendors on the market, so you’ll want to do your research and ask the right questions to find the best fit.
Some things to consider when purchasing ERP software are costs, industry, company size, business model, and future goals. More than half of companies are selecting a cloud ERP system over an on-premises system to support their core business processes. A cloud ERP system has significant cost savings because you don’t have to purchase or maintain hardware or deal with an upfront cost. Cloud ERP also allows you to scale up or down as business needs change.
Steps for a Successful ERP Implementation
An ERP implementation is a major undertaking for any business. Research shows that implementations can take 30% longer than anticipated. But don’t let the studies deter you from the ERP benefits in the end. With the right resources and planning, you’ll have a successful implementation.
Here are some steps to ensure your ERP deployment goes off without a hitch.
- Secure executive buy-in early
- Set realistic timelines and budget
- Define system requirements
- Choose the right ERP implementation partner
- Don’t neglect testing
- Conduct comprehensive training and support for administrators and users
Partnering With ERP Experts at Surety Systems
One of the key steps to implementing ERP software requires partnering with experts. Our team of senior-level consultants is experienced in the top ERP solutions, including Oracle JD Edwards, SAP, Infor, Workday, Microsoft Dynamics, and more.
Our team starts with you at the beginning by evaluating your business and helping you select the right ERP system based on your needs. From there, Surety Systems can help with project management, system requirements, testing, training, and even ongoing support.
To reap all the ERP system benefits, you need to start by laying a strong foundation.
Contact us today to learn how we can help you select and implement a new ERP system.