What is ERP and importance of ERP for your successful business growth?
Times are changing and change is inevitable, whether changing business communication methods or changing the role of technology in day-to-day operations. Change has, in fact, caused several companies to fail to adapt and achieve their goals. In this case, Enterprise Resource Planning (ERP) software solutions, can be very useful for optimizing business operations to accelerate growth.
Asa matter of fact, the global ERP software market is projected to reach $40.70 billion by 2020, and the implications of these systems are evident. While this number is quite impressive, it will be difficult for those who have never used this software to comprehend why it is crucial to their businesses. With globalization pushing the market in every sector, it is imperative you find all the tools needed to provide your business with a competitive edge. For most businesses, this is usually achieved through the utilization of an ERP software.
Here are some reasons why each organization should consider the importance of Enterprise Resource Planning systems,
What is ERP?
It is a business management software, which enables a business to use an integrated application system to manage its operations. It also automates many of its technologies, services and human resources.
The software usually integrates all facets of a business – development, manufacturing, planning, and sales and marketing. This software is purposely designed for use in large companies. Dedicated teams are often needed to customize and analyze the data, as well as to upgrade and deploy it On the other hand, small business enterprise applications are lightweight business management software solutions, often tailored to a specific sector or industry.
It is commonly used by large corporations that want to manage their functions in an integrated and centralized system. Companies working in the supply chain, also often use ERP to track all moving parts of distribution and manufacturing. However, it can also be used by a variety of other industries, including the educational institutes, healthcare, hospitality, nonprofit, and construction. Organizations that need to manage their customers, staff, and inventory, can also rely on the benefits of ERP.
Why is it important?
- Scaling your business.
Growing a company usually means success, but it is clear that the success of a company is associated with several challenges. Adapting your business to additional processes or expanding existing operations takes effort, time, and money, especially when you do everything with an automated system. In the absence of a capable system, dealing with different departments or processes and their increasing demands will be at least chaotic. For instance, the sales team might miss key customer information recently updated which means, missed goals and profits. In addition to selling, the manufacturing team might also suffer from a lack of inventory information. With this system, such problems can be easily evaded.
- Ensures honesty throughout your business.
Data and information are crucial for any business. Data integrity and data security, are essential to ensuring that specific data is processed and accessed only by authorized personnel. In an ERP system, access to data can only be performed by authorized persons as long as the data is kept secure. Strategic information can also be managed in one place, while updates to this information can be taken care of by one or more authorized individuals.
- Facilitates access to important information through automation
Measurement and performance indicators, help evaluate the company’s progress and set future goals. But as the business grows; it is increasingly difficult to calculate revenues, profits and other key indicators manually. This software solution provides a high level of automation by enabling employees across the enterprise to access shared data without the need for manual records. In this way, you can also create synchronized reports on important business metrics. Instant access to information is also important for making decisions in a timely manner.
- Integrates several processes.
As the business grows, its operations grow as well Each of these operations is typically accommodated on different platforms and runs under different applications. This involves some complexity in the processing of varying data by your employees from various departments. In such a situation, your accounting team will likely use some software to generate revenue and expenses, while the sales team uses a totally different application to track sales.
This software integrates various processes required to run a business in a single database. These processes include inventory and order management, human resources, accounting and customer relationship management. By simplifying all processes in an efficient system, ERP offers your organization a shared database that supports multiple functions in the enterprise.
- Simplifies financial reporting in your business.
Every growing business, has difficulties with its accounting techniques, especially when they are still manual or when sales, finance, accounting, and human resources departments do not have access to the shared data In particular, day-to-day accounting and financial reporting require a lot of efforts and time, which can be effortlessly reduced by using ERP solutions. Integrating and analyzing financial data in ERP, therefore improves employee efficiency and delays significantly.
- Better customer satisfaction
Satisfying your customers while effectively running your inventory and sales, can be a huge task if your inventory and customer data are stored across multiple platforms. You may have to report product information to your client, and if the updated inventory information is missing, this can cause problems. The ERP system enables you to update current information and in real time. In this way, customer representatives can access accurate and up-to-date data, and effectively deal with your customers.
An appropriate ERP solution ensures the strategic management of the organization while helping management to integrate different departments, and manage the various changes that occur. IT management also becomes easier with ERP. Companies must, therefore, be ready to face the fast-changing business environments, and with a proper ERP solution, it is possible.
The importance of ERP systems far outweighs the upfront costs, deadlines, and implementation efforts associated with choosing the right solution. By using the tools and functionality of your ERP system to support your growth strategies, you can provide your businesses with a competitive edge and become a true leader.