In this current era, where multichannel has become a real focus for all organisations, having an ERP system has never been so important. Regardless of the size and sector of your business, an ERP is what keeps you in the game!
The term ‘ERP’ itself is not self-explanatory and refers to the business systems that has been designed to record and manage your enterprise data. ERP stands for enterprise resource planning. An ERP system helps companies integrate and manage all their financial, supply chain, manufacturing, operations, reporting, and human resources activities. ERP systems can be deployed on-premises, but automated, cloud-based solutions are becoming more popular every year. ERP systems are considered to be a type of enterprise application, that is software designed to be used by larger businesses and often requires dedicated teams to customise and analyse the data and to handle upgrades and deployment. In contrast, small business ERP applications are lightweight business management software solutions, often customised for a specific business industry or vertical.
ERP systems automate and integrate core business processes such as taking customer orders, scheduling operations, and keeping inventory records and financial data. ERP systems can drive huge improvements in the effectiveness of any organisation by:
- Assisting you in defining your business processes and ensuring they are complied with throughout the supply chain
- Protecting your critical business data through well-defined roles and security access
- Enabling you to plan your work load based on existing orders and forecasts`
- Providing you with the tools to give a high level of service to your customers
- Translating your data into decision making information
Today most organisations implement ERP systems to replace legacy software or to incorporate ERP applications because no system currently exists. According to Webopedia (2017), a 2016 study by Panorama Consulting Solutions, LLC., indicates that organisations implement ERP for a number of reasons but mainly to replace out-of-date ERP software, to replace homegrown systems, to replace accounting software and to replace other non-ERP systems or they had no system.
Advantages of an ERP System
The right ERP system brings all your business processes together for easier collaboration, faster decision making, and improved overall productivity for the whole team. An integrated ERP system helps you with:
- Financial management – Improve your control over company assets, cash flow, and accounting.
- Supply chain and operations management – Streamline your purchasing, manufacturing, inventory, and sales-order processing.
- Customer relationship management – Improve customer service, and increase cross-sell and upsell opportunities.
- Project management – Get what you need to deliver work on time and on budget with better billing and project monitoring.
- Human resources management – Attract and retain good employees with tools that help you hire, manage, and pay your team.
- Business intelligence – Make smart decisions with easy-to-use reporting, analysis, and business intelligence tools.
Disadvantages of an ERP System
- Adopting ERP systems can be expensive.
- The lack of boundaries created by ERP systems in a company can cause problems of who takes the blame, lines of responsibility and employee morale.