With so many evolving technologies, it is hard to decide which will be beneficial for the growth of your business. You might be thinking, is it worth investing your resources in the Enterprise Resource Planning system? ERP is the software that is designed to manage and integrate all processes and activities of the business. It provides all the required information about each department at a central location. Let’s find out why it is beneficial to install an enterprise resource planning system in an organization.
- Improves the performance of management: Enterprise resource planning acts as a data centre that links all the business activities requiring management, such as production, workforce, sales, inventory, customer support, and so on. ERP is equipped with efficient computer technology, which enables the automatic handling of data quickly and effectively. Now organizations need not maintain manual data related to different tasks, which further eliminates the chance of human errors and, thus, better management of business activities.
- Enhances visibility: This is the key benefit that is provided by enterprise resource planning. ERP allows the top management to collect, process, and store the important information related to every department of the organization. There is no requirement of using separate databases for every department when a single data system can provide accurate information about each process and activity carried in the company. Availability of organization’s information at central location improves visibility of tracking the workflows and interdepartmental activities with maximum efficiency.
- Focused IT cost: Installing enterprise resource planning in the company needs a large investment, but this investment can prove to be fruitful as it unifies the IT cost of the organization, which further improves efficiency. Rather than utilizing your funds and workforce on multiple systems and infrastructure, it is better to focus all your resources on a single ERP system. Usage of only enterprise resource planning systems also reduces the training and development cost of the company since employees only need to learn about the working of only one system.
- Coordination is improved: Enterprise resource planning system provides required information about all the business activities and departments at the central location, which further improves coordination between different branches and departments of the company. Now there is no delay in communicating the necessary information across all the levels of the management and branches offering efficient business processes.
- Improvement in reporting and planning system: The installation of enterprise resource planning in the department implies that your organization now has a single unified system of reporting for every business activity and procedure. Paperwork has been reduced, the communication system in the organization has become effective, and thus, submission of department reports has become quick and easy. Now top management can easily analyze and compare the functions across different departments that allow the devising of effective strategies and plans for further improvement in the business.
- Security of qualitative data: One of the biggest benefits that ERP offers is the security of the data. It is usually difficult to merge data available from different databases, and data security is also compromised, but a single ERP allows the company to procure accurate, consistent, and secure information on different departments.
- Improves scalability and flexibility: Another advantage of enterprise resource planning software is determined by its modular structure that allows the organization to adjust the scale of ERP according to existing customer needs and business environment conditions. Due to this feature, the resource planning system of the business can easily adapt to the expansion or contraction of the organization’s activities on every level. Also, you can get different applications from the vendors of ERP based on the current business requirements. Except for some, all the applications are designed in such a way that they can stand alone or integrate with the existing infrastructure of the organization.
- Efficiency is improved: Enterprise resource planning not only helps the company to reduce its IT and training cost but also the time and efforts required by the employees to monitor and regulate the daily business activities is also reduced. According to a study, ERP, if used wisely, has the tendency to reduce operational costs and overall administrative costs of the business by 23% and 22%, respectively. A properly implanted enterprise resource planning has the power to eliminate the repetitive procedures in the business, allowing the workforce to have sufficient time to focus on profit-affecting activities.
- Better customer service: Effective implementation of enterprise resource planning in the organization optimizes customer relationship management. ERP analyzes and stores all information regarding customers at the central location that allows the sales team to focus on building and improving the relationship with their customers rather than maintaining the required data. Also, because of the availability of accurate information on customers’ orders and sales, now sales manager and customer care staff members are able to effectively communicate with their customers without delaying the response to customer’s inquiries. The recently updated ERP system has some features that support the e-commerce integration, which allows the businesses to handle better all web-based sales orders and interactions with their customers.
- Improvement in supply chain management: The companies that are involved in the business of producing, storing, and transporting physical inventory, enterprise resource planning is best for them as this software works on improving the supply chain management in several ways, including shortened lead time, on-time delivery, reduction in the logistics costs, and many other advantages. Through a well-designed ERP system, the overall operations such as forecasting of demand, management of inventory, procurement of raw material, etc. of the logistics company can be enhanced, which further results in the success of the company.
If installed effectively in the organization, an enterprise resource planning system can not only result in a reduction of different operational and administrative costs but also help reduce the time and effort required to complete the different processes. It provides integrated information about different functions to the business, which further helps in enterprise content management. Before installing an ERP system, you should be aware of its features and see if particular applications are apt for your organization.