What is ERP - Working, benefits and features

Enterprise resource planning software documents your workflow to help you precautions analyze the operations which are slowing down the growth and what processes or solutions can be implemented to boost efficiency in the business.

Things like, minimizing set-up, increasing warehouse space, managing delivery time and so much more can be done through ERP data evaluation and these can make a huge difference in the overall output and positive cash flow of the company. 

ERP Systems are constantly updating data in real-time. As and when the changes the implemented, the data is ready to be scrutinized.

You can always do some or the other thing to reduce costs and increase profits.

The analysis to find these loopholes is not entirely up to you, ERP systems sort out data in such a way that almost half of the analysis is already done, with synchronized and systematic organizing.

One of the indications that your business is doing good, is customer satisfaction.

Enterprise resource planning systems facilitate you with features to integrate Customer Relationship Management (CRM) functionality into the software.

This tool can majorly put every management process in order by coordinating the workflow of all departments from inventory to sales to production to accounting, shipping, and many more. Plus, the customers will also get the feature to track the status of their order. 

ERP systems can notify every department about the needs and orders of other departments, your team will know what production, inventory, supply requires in order to produce according to the market demand.

This terminates any need for individual communication between departments and maintains supplies while uninterrupted workflow.

Numerous advantages a business gets from using an enterprise resource planning software come out of the common database feature.

This gives businesses the facility to organize all their data at one central location and this information comes from different departments.

This central source with real-time data updates terminates the manual process of merging and separating information, each being controlled by the type of business functions they perform. 

Everyone across the company uses the same interface (UI) and has the same user experience (UX) with an ERP system. Inventory, HR, finance all have the same modules and have a similar look and feel.

This makes the software more likely to be adopted and makes it easier for anyone to browse between departments for information.

A consistent UI and UX has consequences like efficient business gains as all the members can search and understand information from anywhere in the company.

A typical must-have feature in ERP applications is that it must successfully support and integrate the processes of a business from any department, accounting, production, marketing, supply, everything.

The right Enterprise resource planning system will possess the feature to unify all the distinct and diverse processes and connect them into one efficient workflow, which helps the business in management and boost productivity and visibility.

Another essential feature in any ERP system is the ability to automate businesses’ repetitive tasks and processes like purchase order processing, payroll, invoicing, reporting, etc.

This feature successfully eliminates manual work, data entry burdens, saves time, and minimizes errors.

Automation takes a lot of workload off the employees’ shoulders because of which they have the space to invest their time, energy, and knowledge in more valuable tasks which cannot be automated.

The most popular and marketable benefit of an ERP system is that it can help an organization save a lot of money from numerous different channels.

Automation of many simple and repetitive tasks ensures minimal errors and diminished need to hire more employees as the business keeps growing.

Transparency and company-wide visibility of all business-related data make the process of error detection easier.

All the inefficiencies that contribute to the increase in the cost of business can be quickly spotted which in turn leads to a better and more efficient distribution of resources.

All business data collected is of no value until it is properly organized and analyzed. An ERP for enterprise can help you in that area.

An advanced solution like this consists of amazing reporting and analytics tools, which give the user to not only track KPI but also present metric and contrast of the whole system.

An ERP is an all-inclusive system, it can prove to be a major part of understanding how the business is changing, at what rate, what are the problems it is facing, and from where can the problem be solved. 

Enterprise resource management can colossally reduce the risks of a business.

Access control to the ground level and strictly defined workflow approvals strong-arm the financial controls of a company ad reduce fraud.

Along with this, it also gives a clear, more accurate, and quick data error detection which saves a lot of sales, which would have otherwise led to a great loss.

Ultimately, the facility to see and track the status of the whole project enables the team members to swiftly resolve risks arising from any business damage.

Enterprise resource planning software is designed by keeping in mind that all business information is critical and this sensitive data needs to be protected by using various security measures.

These measures are extremely important because of the increasing volume of cyberattacks.

Cloud enterprise resource planning, specifically, uses state-of-the-art security protocols to protect your company by keeping it away from the damaging attacks of hackers.

ERP applications can significantly make a company’s customer and partner relationships stronger than ever. 

The system can display insights and analytics on suppliers, shipping facilities, other service providers with the cloud feature providing more convenience and smoother information exchange.

Talking about customers, ERP solutions can give you a track of survey responses, returns, support tickets, and to the extent where business can actually ensure maximum customer satisfaction.

An ERP gets integrated with your business’s ongoing systems, so the ERP software you choose to implement must have the flexibility and compatibility to blend with your current technological infrastructure.

If you are not able to make the decision, it is suggested to take advice from experts on risk management, security details, cost of maintenance if you get a new ERP system.

The market is filled with various ERP software options, differing in functionality, interface, cloud storage, security means, etc.

The humongous amount of vendors can obviously be confusing and can make the decision of choosing one very hard.

It is advised not to make a blind purchase looking at the brand name, do thorough research, look around different solutions, keep in my your business’s needs and then choose the right one.

It happens often that ERP applications vendors start charging a little extra here and there for service which is given over the basic package price.

While doing research, you must get enough knowledge on the additional pricing variables such as:

• Software maintenance.

• Hardware upgrade charges.

• Implementation cost.

However, this doesn’t mean that you should simply choose the cheapest enterprise resource planning software because those may turn your company vulnerable to security breaches and hacks.

Enterprise resource planning implementation is a big step for any company and it may take some time to get used to it.

Hence, the implementation time frame is an essential factor to consider along with others like cost and profitability.

Your implementation plan must have a grace period for shifting data.

Track and compile all your drawbacks, strengths, and other functions that you think your ERP solution should be able to manage.

Determine which processes and workflows your company needs to optimize and what is expected business look after the implementation.

After an ERP implementation, your company is highly likely to increase its profits by reducing various costs from every corner of the business.

So, it becomes crucial to have metrics to measure the benefits of the system before you actually purchase it. 

The cost of purchase of early ERP software is pretty expensive, implementation and maintenance add up to the cost because of which they were accessible only to a unicorn or large companies.

However, the scenario has drastically changed over the past two decades.

Although, ERP applications still require a lot of time and financial investment to be installed the technology has comparatively become affordable now.

This price differentiation is because of Saas systems which levy a recurring charge and more solutions available in the market for small and midsize businesses. 

Similar to when you introduce any new technology, ERP also has a learning period.

Anyone who would use the system, most probably all your employees; would need a certain level of training.

There may be some acceptance issues at first, however, when people start understanding the benefits the ERP technology gives them, the acceptance will come naturally.

Recent systems which keep upgrading themselves are more user-friendly and more instinctive and this diminishes the requirement for training sessions and increases comfort.

When a new ERP system is adopted, a lot of data has to convert into a format that can be accepted by the new software.

This may draw up unexpected costs and time lags, so it is essential to review your database and work with an IT experts team to identify and solve all data compatibility-related problems.

Enterprise resource planning software is filled with features, and this can be intimidating for everyone.

But the type of ERP solutions available today are easier to use because the vendors have put in efforts to enhance the user experience.

Along with this, employees need to have access to only those modules and dashboards which are related to their job type, which makes the information more approachable. Thorough training can, however, solve this problem.

Earlier the maintenance of software meant large expenses which small businesses could of course not afford.

Along with the cost paid to IT professionals to handle security, management, and system updates, often the vendors or suppliers also had to be paid for their service and expertise.

This is now not a big concern, because a SaaS system takes care of all maintenance and regularity moves for all customers and all this comes into a subscription price.

The first step is to gather a team of various individuals from different parts and departments of the company and determine what exactly does the company needs from an ERP system.

They should be able to identify areas of inefficiency and other drawbacks in the functioning and process of business growth.

Once the team has a clear idea of the requirements of the business, the next step is to assess the features and marketable points different enterprise resource planning software existing in the market have to offer.

Also evaluate which platform can best resolve your company’s problems, meet all departments’ requirements and also stimulate the development of the business.

This is the step where the implementation team determines if the system can adjust and be compatible with the existing workflow and which are the processes that need to be refurbished.

This is also the step where the team has to identify if the system needs any customization.

Technical professionals whether internal and/or external can help your company by molding the software in such a way that it meets all your demands.

After this customization, these professionals start migrating the company data from the existing system to the new ERP solution.

This is also the time where you decide how and when to train your employees for getting used to the interface and also start scheduling sessions and collecting training materials.

Testing cannot be compromised at any cost. It is the most important step after the enterprise resource planning implementation.

This is done to make sure that every aspect and feature of the ERP is working as expected and if there are any problems they can be fixed immediately.

While doing this, it is crucial to include employees from across the company for testing every aspect from the perspective of every department.

There may be some setbacks initially but businesses should always prioritize training sessions for the employees to avoid any problems in the process of adjusting to the change.

Make sure that everyone has everything they need to make the best use of the new system.

This is a continuous process and can include extra add-on configurations with the help of suppliers or professional consultants.