Quick question: what is ERP? – It stands for Enterprise Resource Planning, and it’s the ultimate business management solution.
ERP is a suite of integrated applications that enable you to manage your business processes in real time across all departments and functions, from finance and accounting to sales, inventory, production planning, manufacturing, customer service—the list goes on.
With one shared source of information available to employees across the organization (think of it as “one version of the truth”), you can gain better visibility into your operations and make smarter decisions in every area.
And because it’s one fully integrated system—not just a hodgepodge of applications patched together with custom code—your data flows seamlessly throughout the system so everyone works off the same numbers.
Plus, things are easier to maintain because there are fewer interfaces between systems that need updating or fixing when things go wrong.
Plus ERP is modular software—you can start by implementing just a few pieces of functionality before expanding later on with additional modules when you need them most.
How to choose an ERP system
Choosing an ERP system is a critical decision. Before selecting a solution, keep the following in mind:
- How will this impact your company? In order to get the full value of investing in ERP, you’ll want to ensure that it’s used across all teams and departments. While the project may be spearheaded by one department or team, everyone who works for your organization should be able to benefit from an ERP system so that you can reap the maximum gains possible. Therefore, when searching for an ERP partner, consider how each solution will integrate with your employees and meet their needs.
- Does it have room to grow? One of the primary benefits of implementing an ERP system is its ability to adapt as your business changes and grows. When evaluating your options, think about how each system will support you in the long run—will they allow you to scale as needed while optimizing costs?
- Will it play well with others? In today’s increasingly digital world, there are plenty of other solutions companies are using alongside their ERPs—everything from CRM software and marketing tools to workflow management solutions. Since having all these different systems working together is important for improving efficiency and productivity, ensure that any potential solution can easily integrate with other solutions you’re currently using or anticipate needing in the future.
- Consider total cost of ownership (TCO). The TCO includes more than just subscription fees or upfront licensing costs; it also includes expenses such as hidden fees (like training) or additional hardware/software costs incurred when implementing a new system (in addition to customizations which may be required). Although initial sticker shock might cause vendors’ solutions that have higher TCOs seem less expensive at first glance, paying more up front could mean saving money overall down the road
10 of the most important benefits of using ERP as a business management solution
The benefits of ERP systems are so numerous and spread across so many different business departments, they’re hard to measure. Still, most companies that implement such a system see significant improvements in the operations and management of their enterprise.
Here are 10 of the most advantageous benefits an ERP system can provide.
- Completely customizable data management
ERP software helps you organize, store and manage all types of data. You can customize the software to meet your needs and those of your users, assigning different rights and permissions for each user’s role. The possibilities for customization are endless — and very useful in practice.
- Automated workflow
You can use an ERP system to automate certain workflows, such as purchase orders or invoicing. Automating these tasks saves time and eliminates human error that can occur when managing complex systems manually.
- Centralized data management
With ERP software, you can centralize all company-related information in a single database. This makes it easier to access the data you need and ensures the integrity of your data throughout the organization. When everyone is working with the same information and storing it in one place, everyone’s on the same page!
- Improved security and risk management
The term “enterprise resource planning” is often used in the same way as “enterprise risk management” even though they have little in common on their surface. Only if you dig deeper will you realize they’re two different things.
- A single data source of truth across the company
You need to combine all your business systems into just one enterprise resource planning system. Without this, it’s difficult to see the big picture and make decisions based on all the data collected across the company’s operations or all its departments.
- Improved communications and coordination
The more people involved in making decisions about an important task, the more chances for mistakes — which is why in an ERP system all departments are integrated into one place, so it’s easier for everyone to get involved with decision-making processes.
- Better decision-making capabilities
ERP provides real-time access to actionable data that lets managers make informed decisions quickly. This is especially useful during times of uncertainty when it’s essential to act fast while managing risk.
- Greater insight into the supply chain
ERP gives companies a better understanding of how their supply chains operate with visibility into operations from procurement through to fulfilment.
- Improved financial performance
Data integrity and control over its accuracy help businesses streamline their processes and improve financial performance by reducing operational costs, improving cash flow and increasing revenues.
- More accurate inventory control and product tracking
ERP systems enable companies to track inventory in real time, which can increase efficiency when it comes to meeting customer needs like split shipments and drop shipping.
Hidden costs to watch out for when choosing an ERP system
ERP systems are a powerful business management solution. They allow you to streamline all of your business processes into one central system, which in turn helps you cut costs and improve efficiency across the board.
But before you race out to pick up the first ERP system you see, let’s pause for a moment. While ERP is an incredibly useful tool, it’s not a miracle worker. And just like any other tool, it comes with a cost.
Before implementing an ERP system, you need to be aware of all the costs involved. These include consulting fees, customization costs, training costs, cloud hosting costs (if applicable), ongoing maintenance and support costs, replacement/upgrade/migration fees and more.
Now that doesn’t mean returns on an ERP investment aren’t possible—they are! But just as with any major acquisition for your business, it pays to understand all the potential associated costs of ERP implementation.
Why should your business switch to an ERP system?
Why should your business switch to an ERP system?
- ERP systems help track real-time data, enabling companies to make faster and more accurate decisions with greater insights into their business.
- A cloud-based ERP allows businesses to access information from anywhere in the world using any device. This makes tasks like entering new sales orders and tracking inventory much simpler and easier to manage.
- With a modern user interface (UI), employees can work faster without the need for training on how an application works. The UI also helps streamline workflows across departments so that everyone has access to the same information when they need it most—whether it’s managers who want a holistic view of their businesses or customer service reps who need quick answers while speaking with a customer over the phone.
- Artificial intelligence (AI) is being integrated into many aspects of business today including HR, marketing automation (MA), sales operations management software solutions, finance management systems which offers features like predictive forecasting based on historical data points; customer relationship management platforms that leverage AI-powered chatbots for lead generation and support tickets among others!
How will your business transform with an enterprise resource planning (ERP) system?
- Your company will be able to communicate in real time.
- You’ll have access to real-time data about the health of your business at all times.
- You’ll see improved productivity across the board.
- You’ll be able to make better, more accurate decisions that impact the bottom line.
- ERP systems often lead to increased profitability. (Many businesses see a return on their investment within just two years.)
- Your customers will enjoy improved service as a result of your company’s efficiency boost
Your business will see significant improvements with new technology
There are many ways an Enterprise Resource Planning system can help you manage your business, but these are the most common and important:
- Better decision making
- Improved efficiency
- Improved business management
- Improved collaboration
- Improved customer service
- Improved business processes
- Improved supply chain management
The final word is that ERP can be a great tool for enabling an organization to maximize its potential.
Hopefully, we’ve given you a sense of what an ERP solution is and why we feel it is the ultimate business management solution, and some of the key benefits for it. Now it’s up to you to decide what’s right for your business.
But either way, it’s worth looking into ERP as a business management solution if you think that it could help make your business run better. After all, a tool for improving several aspects of your operation is well worth looking into if you want to grow as an organization.
To learn more about SAP Business One ERP and the benefits to your business, contact us today!