Why an ERP System is Important to Your Company

Enterprise Resource Planning or ERP software solutions has been around for ages. With its prevalence on the market, there is a good chance that you have an idea of what it can do for your business. But do you know exactly how significant having one is for your business?In a study published on IGI Global, results show that ERP systems offer plenty of operational, strategic, and organizational benefits. This ranges from reducing costs and shortening cycle times to improving supply management and standardizing work processes. On top of these, ERP systems offer a number of intangible benefits such as higher employee morale and better company image.

No wonder many companies implement ERP systems to improve their business performance (17%) and position their company for growth (12%). These software solutions serve as comprehensive tools that let you integrate the different aspects of your operations in one convenient platform. With these at your disposal, you are sure to simplify your work while ensuring quality products and services.

Are you interested in purchasing an ERP solution but are not sure if it is useful for your company? In this article, we will be discussing the practical uses of these platforms in order to help you understand why an ERP system is important to your company. This way, you can get a better idea of how you can put their features to use and what kinds of benefits you can reap from them.

Industries That Benefit Most From an ERP System

ERP systems have practical uses for different kinds of businesses because of the many tools they have to offer. However, not all companies require all the features of an ERP suite. So, these platforms may be more beneficial to some industries than others. More often than not, those who can maximize these tools are businesses that tackle multiple tasks every day using different software solutions. Some examples are:

1. Manufacturing. Producing goods for other businesses includes a lot of processes. With an ERP system, you get a better visibility of business transactions and progress of operations. This is because these platforms can consolidate the information from different aspects of your business. This way, you are always in the loop about what’s going on in your manufacturing plant without requiring in-depth reports from your staff on a daily basis.
2. Construction. Other than the actual act of building structures, construction companies also have a number of back-office responsibilities to take care of. This is why they require multi-functional applications like ERP systems. These can help them with project management and inventory tracking as well as accounting and service management. Having such a tool as part of their arsenal of business software can reduce their clerical tasks so they can allot more time for their projects.
3. Logistics. Transporting cargo in a safe and timely manner is a difficult task as it is. It becomes even more challenging when you have to consider the details of each freight you have to handle while gauging the schedule of your drivers and measuring the capacity of your delivery vehicles. ERP systems that are created specifically for logistics often integrate delivery planning and management tools, communication features, and order processing options into one platform for you. It even lets you maintain a customer database so it’s easier to look up finished and ongoing deliveries.
4. Healthcare. Clinics, hospitals, and other medical facilities can get busy, making it difficult for staff members to maintain quality patient care while keeping track of back-office responsibilities. With the implementation of the right ERP software, compiling and organizing data as well as other necessary clerical work won’t take too much time or effort, and the staff can focus on monitoring and treating patients.
5. Retail. When it comes to the distribution and sale of goods to the public, it only takes a simple mistake to ruin the flow of your operations. Countless things require your undivided attention, but there’s only so much you and your employees can do simultaneously. This is where ERP systems come in handy. From coordinating with manufacturers and distributors to tracking shipments and managing inventory, these tools help you make sure that you, your customers, and your business partners are happy.

Pain Points ERP Systems Solve

No doubt, ERP systems are indispensable tools for all types of businesses that require different tools for various operational tasks. In order to further understand its features, we have compiled some of the many pain points that these platforms can solve:

1. Separate Systems for Related Operational Tasks. Many entrepreneurs find themselves juggling multiple software solutions for their daily business operations. However, jumping from one platform to another can take up a lot of time and doing so can make your operations more vulnerable to the risk of human error. Using an ERP can streamline your workflow by providing all the tools you require in one interface. This makes your daily operations faster and more efficient, all while reducing errors. Moreover, by maintaining one platform instead of separate systems, you can save a lot on operational costs.
2. Delayed Customer Accommodation. Being too preoccupied with back-office tasks leave you little time to concentrate on front-of-house duties. This hinders entrepreneurs and their employees to accommodate their customers’ needs and make timely decisions with regards to their concerns. Eventually, this leads to reduced customer retention as well as slower lead conversions. Through an ERP system, you can leverage the combined power of CRM and project management tools to serve your customers better. These features should give your staff members access to all the information they need to help your clients as promptly as possible.
3. Time-Consuming Inventory Management. Keeping your inventory fully stocked while making sure that you don’t waste any supplies is one of the biggest challenges that entrepreneurs encounter on a regular basis. It is a tedious task that requires great attention to detail. Luckily, with ERP systems, you will no longer have to monitor your supplies manually. These platforms come with inventory management features that will allow you to monitor changes in supply levels as they happen and gauge when to reorder stocks accurately.
4. Fussy Financial Data Consolidation. Money goes in and out of your business daily. If you don’t have an ERP system, there’s a good chance that you are keeping tabs on these numbers using different software solutions. While this may work during your first few years in the business, it can get more and more demanding as your sales grow. This strategy makes bookkeeping and financial tracking exhausting for you and your accountants. With an ERP platform by your side, you can consolidate financial data automatically, so you can review all the information without having to check multiple systems.
5. Data Inaccuracies. Manual paper processes can lead to inevitable typing errors and inconsistencies in your business information. Using ERP platforms, you can eliminate chances of duplicates and lessen typos. On top of that, you can even reduce your carbon footprint because these software solutions will let you to handle these processes digitally. You may even store them in an online database that can be accessed whenever and wherever you wish.
6. Unorganized Team Communication. Collaboration is everything if you want your business to run smoothly. To do this, you will need to have a secure and reliable means of communication. Using ERP systems, you can get access to in-software communication tools that enable you to delegate tasks, facilitate group chats, as well as serve as accommodate your file sharing needs. This way, you can manage more projects efficiently and be more proactive in your operations.

Misconceptions About ERP Systems

Catchy ads and quick product summaries can certainly grasp the attention of companies that are looking for ERP programs. However, without the presence of comprehensive product guides, users tend to misunderstand what these platforms are and what they aren’t. Here are some misconceptions about ERP systems that you should know about:

1. ERP Systems Are Only Suited for Large Companies. Just because majority of the ERP solutions out there are created for large firms doesn’t mean that your small or medium-sized company can’t benefit from it. Most of these platforms are designed to be scalable so that fast-growing businesses won’t have to replace their software solutions each time they see an increase in clientele. This goes to show that no matter how big your company or how extensive your operations may be, there are available options for you.
2. ERP Systems Are Expensive. ERP systems are composed of multiple modules, so a lot of individuals expect them to have a high price tag. But the truth is that if you look hard enough, you are sure to find software providers who offer affordable basic ERP platforms. There are even those that offer them for free.
3. ERP Systems Do Everything For You. While ERP systems are equipped to automate tasks, users shouldn’t expect these platforms to handle all aspects of your business for you. This technology still relies on your input, so it is up to you to understand how you can make these software solutions work for you. The best way to do this is by taking time to learn the system and taking advantage of the tutorials and other informative resources that software providers offer.