What is ERP and Its Advantages?

Running a successful enterprise demands skills, experience and business acumen, most of all – smart management of business procedures and deployment of the benefits of enterprise resource planning.

The competitive nature of current markets coerces entrepreneurs to seize and squeeze every available opportunity and technological advances to optimize advances and stay ahead of the competitors. Businesses from various industries use ERP software. 

Different types of businesses get different forms of ERP benefits. Some key trends help give recommendations about when is the high time for a company to implement the ERP system or upgrade the existing one.

The trends include:

• Problems with operations: the companies need enterprise software to improve the management process
• Times of growth: the business is expanding, has expanded or is planning to expand significantly
• Acquisitions or mergers: for instance, the parent enterprise must streamline systems across businesses
• Calculated roadmap: companies with smart executives have underlined a business technology roadmap that comprises an updated enterprise solution
• Outdated legacy systems: the company's current system is old and not available for updates or no longer caters for the company and customers adequately.

While many elements highlight the need for a true ERP system implementation, businesses in specific industries stand to maximize the benefits from making a move. 

The velocity of change in the market, particularly in the services economy, is stern, unleashing major flaws in static business models.

To thrive and succeed, every company must be future-centered and prioritize planning all over the organization, which is why, despite the challenges of ERP, the perks of an ERP system are hard to overlook. 

An ERP (Enterprise resource planning) system incorporates all core business procedures in one location, catering real-time visibility into all tasks from customer relationship management (CRM) to supply chain management. Since an ERP system can be trailing multiple moving parts, it needs to be customized and continuously managed to ensure up-to-date data.

There are also different types of ERP systems, some being customizable to any business and others that are specific to particular industries.

Still, once it is completely centralized and your business implements all the features, ERP enables the business to have smoother management over people, inventory, costs and more. 

Although bigger enterprise businesses have generally used ERP systems with massive operations and colossal budgets – the market has shifted. SMBs also find amazing benefits from incorporating an ERP system. To tackle and have control over the fast speed of business today, every business can benefit from implementing an ERP system. And these solutions can be as detailed as you want for the size of your company.

Some of the primary features of an ERP system involve:

• Incorporation: business, operational and financial information are incorporated on a single platform for greater visibility and streamlined management.
• Real-Time Visibility & Access: view business tasks easily and quickly access global or domestic supply chains all in one place.
• Accounting & Finance: financial data is stored, tracked and managed.
• Automation: Extra or manual tasks like reporting or invoicing are automatically produced and well-organized according to the parameters you set up in the system.
• Reports & analytics: reporting capabilities cater to actionable, data-driven insights.
• Security: Data is kept securely and under your enterprise's compliance requirements.

With these advanced and convenient features, it's for sure that ERP software can help your organization streamline operations and plan better for market changes and future growth. But the best way to understand whether it is worth the investment is to know exactly what these features mean for your enterprise.

Deciding whether or not your company should undertake ERP software can be a daunting decision, especially if you are implementing a major software first time. You may believe that operating can be done efficiently without an ERP system. Still, if you want to see an incredibly positive change in business and overall growth, it's crucial to take the vital steps to see the benefits of ERP software.

Let's check out the most common advantages of enterprise resource planning systems that businesses have delineated after ERP implementation.

1.     Improved Planning & Resource Management

Business resource planning is competently named as it genuinely enables planning across the enterprise, so you know how to forecast and predict costs, sales and the resources you require. ERP caters complete insights that enable a company to forecast the resources required and plan production schedules efficiently. Businesses that can predict order fulfilment or equipment maintenance can reduce production delays and unwanted downtime. 

2.     Maximized Productivity

 One greatest advantages of ERP software is automation that ranges from marketing automation to invoice generation. This spares employees from being more productive in other areas and assures substantial operations don't get ignored. Moreover, having one centralized repository reachable by all departments, an ERP quashes the requirement for dull and draggy manual processes like repetitive data entry over multiple systems. The precision of your data will get better too.

3.     Competitive Benefit

ERPs can be cost-effective. Taking on a modern ERP system can still put you ahead of the rivals by having a higher level of intelligence.

According to Selecthub, on average, an ERP system can reduce operational costs by 23% and overall administrative costs by 22%.

ERP combines increased agility with real-time data that enables you to get perfect in new competitive advantages, respond fast to changes and drive product development.

4.     Integrated Data

An ERP system gathers information across all the departments and consolidates it into one source. This makes the sharing procedure streamlined, accurate and consistent, which leads to more coherent coordination between different business departments. It also provides access to up-to-date, accurate information that helps high-level business operations like decision-making, subsequent planning and forecasting.

5.     Improved Data Security

The core of an ERP system is data protection. ERP systems revolving around business operations have controls on the accessibility and visibility of sensitive information. Collecting data into one repository, whether in the cloud or on-premise, shores up security compared to the disorganized sources on disparate systems. Enhanced data security is also helpful for built-in reporting tasks and regulatory compliance for auditory costs reduction. 

6.     Department Collaboration

ERP solutions help in sharing system-integrated information remotely. Moreover, suppliers can trace plan and stock balances ahead of time, organizing your supply chain activities. 

7.     Impressive Customer Service

ERP system enables sales teams and customer service to quickly access customer data, so they have enough time to address customer concerns and cover experience history.

According to Forbes, 62% of U.S shoppers say they shop more online now, during the pandemic, than they did ever before. 

Although there are plenty of advantages, it's not all 100% smooth sailing etc. With so many perks of ERP, you might be ready to compare the systems. But it's evenly as crucial to know the risks and setbacks of this type of software to ensure ERP is the right system for your company. Here are some of the disadvantages clients might experience during an ERP system implementation:

1.     ERP system installation is expensive.

According to SolutionDots, ERP consultants are very pricy and take around 60% of the budget.

2.     The system can be tricky to use.

3.     Resistance in sharing sensitive data between departments can reduce software efficiency.

4.     The success is dependent on the experience and skills of the workforce, including their knowledge and how to work with the system efficiently. No success of the company is guaranteed. Organizational culture, understanding how to engage staff and forecast changes that will suffer the enterprise using this administration system are vital components for completing the proper undertaking. 

5.     No immediate benefits are served. They will appear after a long time of system implementation.

6.     The closing of ERP undertaking relies upon the workforce's skill and ability and includes training and education to make the system appropriately applied.

The direct benefits of an ERP system include integration of information, efficiency improvement, quick response time to customer concerns, etc. In contrast, ERP's indirect benefits are customer satisfaction, enhanced customer goodwill, and a better corporate image. The goal of ERP is to combine all the functionality needed to obtain both direct and indirect benefits and support all the stages of resource planning.

Flexibility is one of the direct benefits and important characteristics of ERP systems that users like the most. A modular makeup shows that apps can be used together as a full site or singularly. An organization can select which apps are the best match for their business requirements without buying what is not needed. This flexibility helps businesses stay away from clunky systems they were using previously.

Some other direct benefits of the ERP system are listed below:

• Flexibility
• ERP packages with automated data updating
• Different currencies
• Different languages
• Deployment of the latest technology
• Accounting standards

The benefits of ERP are certainly a top reason that companies choose to undertake ERP.

ERP vendors are business software creators and sellers that develop, sell and implement ERPs. They develop updates and redundant releases to sustain the modifications in their customers' industries. Yes, Dell is an ERP vendor. Dell Digital’s SAP-based ERP system enables supporting 60,000+ users on several core applications and business tools with SAP business warehouse – the information warehouse that hosts Dell EMC’s mission-critical information on shipments, orders and invoices and other sensitive information. 

SAP is an ERP vendor who's also recognized in the industry as a leading solution, particularly for cloud-based systems. As such, it's a good system to use as a baseline in comparisons with other leading ERP vendors like SAP vs. Oracle, SAP vs. ServiceNow, and SAP vs. other ERPs. Doing these side-by-side ERP software comparisons on features and pricing can help ensure you choose the best ERP for your business. 

Lastly, even with the flaws, ERP software can still be extremely helpful for building a thriving business. The benefits of ERP system implementation in your company outweigh the negatives, as ERPs provides a financial and competitive boost to your company while improving its collaboration, productivity and communication. We've shown you the advantages of ERP software; if you feel like ERP is best for your business, we highly recommend giving it a try to not miss out on any of its benefits.