An ERP system is one of the best things a business can invest in because it allows them to save both time and money. Here are the benefits of ERP systems.
According to statistics, 95% of companies that implement enterprise resource planning (ERP) reap improvements to some or all of their processes.
Thus, it is easy to understand why organizations are poised to spend $84 million by the close of 2020 on ERP solutions. Seeking a competitive edge internally is as crucial as external forms of differentiation, without which a firm’s survival can be at risk.
Keep reading to deeper understand the potential benefits of ERP systems your business can tap.
Understanding Enterprise Resource Planning (ERP) Systems
ERP is the approach that companies use to run the critical elements that make up their daily operations.
To make this happen, these organizations depend on specially designed software systems. Therefore, an ERP system is the software suite that powers the ERP infrastructure.
Some of the essential functions ERP systems power include accounting and risk management. Others are compliance and supply chain management.
How ERP Systems Work
ERP leverages a central database through which the modules pick the information. A module is a component of the system that concentrates on running a particular operational function.
By using a relational database, an ERP system will collect and retain the information in tables. From this point, end-users from each department can then retrieve the necessary data to analyze it.
Thus, instead of each department developing its set of spreadsheets you have a centralized source of information.
The Benefits of ERP System Implementation
No matter the scale at which your organization operates, it stands to gain some benefits from implementing ERP systems. These include:
1. A Streamlined System
A streamlined operational environment inevitably creates different types of efficiencies.
When it comes to your day-to-day concerns, ERP system allows you to run various functions using only one system.
If your company operates without a firm-wide ERP architecture, each function will have to develop and run a separate system. As a result, you will likely end up collecting and managing duplicated material due to the silo effect.
Additionally, you are bound to experience more errors. This is caused by multiple sources of incoming information. As you collect more data in such a scenario, you increase the chances of potential errors.
Another effect is that you create piles of unstreamlined data. Thus, you stand the chance of losing visibility of your organization. This will impact how quickly and effectively you can make critical decisions.
When every department works by utilizing the same information source, you can make better decisions.
For example, say your sales team manages to bring in new business. If you rely on an ERP system, it will create a transaction for the finance team to look at. The same system will then originate an order for your production department while also updating your inventory.
ERP system can also alert the procurement department to replace the inventory that has gone into fulfilling this new sale.
All these steps generate information that can quickly pile up and slow things down if you are not using an ERP system.
2. Memorable Customer Experience
Your customers have high expectations regarding your business when they want to buy from you. The kind of customer experience you deliver can inform current and future purchases they make.
Customers expect to receive a consistent service by all departments. The moment your customer has to update each new department they deal with, you will find yourself bleeding clients.
An ERP system can ensure that no matter where a customer’s buying journey began, you can give them the same experience.
Having a central source of information ensures that all functions are up to date on matters concerning each client.
Using Ecrion Software, for example, you can bake in more customer experience automation into your operations. That not only saves your staff valuable time in getting acquainted with a new client, but it empowers them to deliver faster services.
The more seamlessly each department can communicate concerning a customer’s issue, the more satisfied your client will be. In turn, you can find yourself retaining clients for longer, which increases the lifetime value per client.
3. Glean Better Insights from Your Data
Data is the new oil. But for you to derive the value you need from all the information your organization generates, you have to take meaningful lessons from it. The chicken and egg problem here is that without reliable incoming data, you can’t generate high-value insights.
Therefore, finding and leveraging a better way to capture and store all of your firm’s information becomes essential.
Since an ERP system deploys one central repository for your teams, they can access company data across different devices. A natural result of this kind of workflow is the ability to run fast analysis on the fly without any friction to data access.
Add that to the fact that every team member with authorization can update the information in real-time. Also, your employees can identify better insights on demand.
Once all the initial analysis by your team is done, you can turn to the business intelligence component of an ERP system for more in-depth data mining.
Are You Ready to Optimize Your Organization’s Resource Use?
How you make use of your resources as a firm influences how well you perform. Thus, you need a repeatable and scalable approach to manage this function. An ERP system can help you streamline your operations and give each team the right resources. To reap the benefits of ERP systems, ensure you tailor the modules to the functions that are a priority to your firm.
Are you determined to get your organization operating as a lean, mean machine? Check out our other content for tips and insights to achieving operational excellence.