ERP systems have been in the business landscape for a long time, but there are still companies which have not taken the leap to using an ERP system within their business.
We understand that this is a big decision to take, so in this blog, we look at some of the benefits of making this switch. But first, let’s take a quick look at what the average ERP system looks like.
What is an ERP system?
ERP stands for Enterprise Resource Planning. This type of software is used by many companies to manage the day-to-day processes within the business such as accounting, sales, project management, compliance and the entire supply chain from the supply of materials to the distribution of finished goods. Many ERP systems may also have extra integrated modules such as Customer Relationship Management (CRM) and Business Intelligence (BI tools) as well.
In essence, they’re a number of integrated applications using a common database, which all work together to provide you with everything you need to know about your business. Since the term was first used in the 1990s, ERP systems have changed a lot, with some now starting to make use of Machine Learning and Artificial Intelligence.
Improved data flow
By far the biggest benefit of having an ERP system within your business is the improved flow of data. By their very nature, they allow business processes to be linked together to minimise duplication of data.
What does that mean for the average business?
Let’s look at a business that is part of a supply chain. I.e., they receive in customer orders and the order information is routed to the distribution point which has the right stock for that particular order.
Before using and ERP solution, this sort of business would have to rely on the correct stock information being to hand, which may or may not be real-time. In some cases, it may not even be accurate, which can often lead to mistakes or missing items.
With an ERP system, this order process would be seamless as all the inventory data for the different distribution centres would be available at the time of order. This means that the order is fulfilled quickly and any problems can be flagged up instantly.
But this information flow is not just limited to supply chains. The same can be true for financial information, compliance and much more. Even businesses who have complex information requirements can benefit from an ERP system.
Increased productivity
When using an ERP system, most businesses will find that overall they are far more productive. This may be in areas such as manufacturing and delivering orders on time, but staff can become more productive too.
With everything being accessible, there is much less need to be hunting down information about orders for example. A customer service team member can quickly see if an order has been picked, packed and despatched, all in one place. No more chasing around the warehouse to see what is happening or hunting for information which may be stored in more than one system, which operates in silos rather than flowing across the business.
For manufacturing businesses, this improved productivity can come as a result of better planning; meaning that machine time can be utilised better and throughput increases.
360 view of the business
With the advent of BI tools, which sit over an ERP system, it is far easier to get a 360 view of what is happening in any area of a business, or even the business as a whole. Owners, directors and finance officers can instantly see where there are problems which require their attention.
Traditionally this information was all available, but it was not as easy to access. Many hours of work would go into preparing data for year-end business reviews. Things could be missed or would perhaps be presented in a way which didn’t make them easy to understand.
Most ERP systems come with a customisable level of reporting which can give you the views that you need of your important business data.
Cost-saving
Everyone likes to save costs, particularly in business! An ERP system can help with this too. Some examples have been given above, such as increased efficiency at manufacturing businesses or in the time taken to process orders etc.The other main cost benefit is in the time that is no longer wasted duplicating information in spreadsheets for example. With profit margins being squeezed in some industries this can mean the difference between a business succeeding or failing.
Increased customer satisfaction
At the end of the day, a business is only as good as the customers who keep the orders for products or services flowing. Missed deadlines or deliveries can lead to dissatisfied customers, which in turn can lead to fewer orders, and we all know what that means.
If there is a problem, having customer service staff who can easily find out what has happened and resolve an issue in real-time gives you the advantage and you are more likely to end up with a customer who is happy.
There are of course many other advantages to having an ERP system, we’ve only scratched the surface here! If you are looking to make a change to the way you work, then why not get in touch to see how we can help you find the ERP that is right for you?