Enterprise Resource Planning (ERP) is a business management software solution that helps organizations to automate and streamline their daily processes. Fundamentally, it can (and it will), change the way you work, today, and well into the future. An ERP system effectively manages and controls your operational business and financial workflows, no matter if you’re producing automotive parts, managing a medical clinic, or developing software apps.
Whatever your line of business, its size, or its scope, ERP seamlessly connects your operational business processes, all on a single platform, to power your finances and accounting, sales and marketing, manufacturing, inventory and distribution, project management, human resources, and more.
Most ERP solutions are equipped with multiple modules that can be purchased as an entire suite. Organizations that require basic functionality, have the option to pick and choose the modules they need most. ERP systems can also be customized to suit an organization’s specific needs, or integrated with existing or new software solutions.
The list of benefits is endless, but in a word, ERP helps organizations to streamline their business functions, automate manual tasks to reduce human errors and duplicate data entries, and amalgamate your business data, so that communication between teams, departments, and companies, is always in sync.
What powers an ERP?
ERP systems depend on a common database that is continuously updated, revised, and synchronized as and when different modules-update information. This helps organizations to avert operational delays and bottlenecks, and ensure the accuracy of their business data, all in real-time. A central data repository also ensures that storage requirements are minimized, and errors are eliminated.
ERP is one of the three most important software solutions that most companies use, with the other two being Customer Relationship Management (CRM) software, and Human Resource Management Solutions (HRMS). However, most ERP suites are equipped with built-in modules that mimic CRM and HRMS to a large extent.
Different flavors of ERP
ERP dates back to the early 1990s when software solutions that resembled modern ERP were installed on company infrastructure. This process is known as on-premise deployment and required large storage devices in server rooms. With the advent of the internet and cloud computing, ERP slowly moved online and is now delivered through a Software as a Service (SaaS) model. A SaaS-delivered ERP does not need to be deployed on local infrastructure. Instead, a company subscribes to a cloud ERP solution and accesses the software via the internet.
As ERP handles sensitive business data, some organizations are hesitant to use SaaS solutions for all of their operations. In this scenario, they may choose a hybrid model, where certain modules are deployed on-premise, while others are delivered via the cloud. Today, both SaaS-delivered cloud ERP and hybrid ERP are in use, and it largely depends on the budget and technical requirements of an organization.
Benefits of ERP (in a nutshell)
ERP solutions are expensive, and often difficult to implement. They require careful planning, and organizations must choose their vendors with due diligence. Yet, a successful ERP implementation reduces costs in the long term and enhances the overall productivity of an organization.
- Eliminate manual entry of data, and minimize errors
- Automate manual operations and free up man-hours
- Reduce operational costs by streamlining various business processes
- Manage inventory and shipping efficiently
- Provide an intuitive interface for employees to work with
- Enhance workplace productivity and efficiency
- Encourage collaboration between various teams and departments within an organization
- Reduce risks, enhance compliance, and ensure data integrity
- Gain business insights and make accurate forecasts and predictions
How to make ERP deployment successful
Studies show that many ERP implementations fail because businesses don’t carefully consider various aspects of the process itself. They may implement ERP haphazardly, without proper planning and audits. To make a successful ERP implementation, the following steps are required:
- Understand what ERP is and how it can help your organization
- Conduct a technical and business feasibility audit
- Gain approval from various stakeholders to implement ERP
- Search for ERP solutions and shortlist vendors based on different criteria
- Configure software and migrate existing data to the ERP platform
- Train your staff and continue to seek support from your vendor for successful ERP operation
An ERP is essential to (most) businesses
ERP systems help businesses to automate their manual tasks, reduce man-hours, and streamline various business operations. They eliminate errors and duplicate entries and ensure data integrity. In addition, they also improve communication between departments. As a result, organizations that successfully implement ERP, enhance their productivity, and reduce operational costs in the long term. However, ERP should be implemented after careful planning and due diligence. Professional consulting is often necessary to select the right product, consider software integrations, and in turn, enjoy the many benefits of a successful ERP deployment.
If you’re considering ERP for your organization or replacing your current ERP system, talk to us today. We’re here to help.