Running a successful business depends quite heavily on the ability to take informed decisions. However, when you are running a business that’s growing, it is challenging to have a complete view of the organization’s performance. Your customers are increasing, your team is growing, principals and distributors are rising, product portfolio is expanding, transactions are adding up – there is a lot on your plate. However, what entrepreneurs don’t realise is that as they grow it also becomes increasingly imperative for them to have access to the right information to enable them to take quick insightful decisions to enhance their overall performance and stay ahead of the competition. An Enterprise Resource Planning (ERP) system is one such platform that enables this.
Get bigger, get better.
10 years ago an entrepreneur could afford to focus on certain business areas and drive organization growth. However, today it’s impossible. To expand today, entrepreneurs need to focus on all business aspects and must equip themselves and their people with appropriate tools to transform data into actionable insight— irrespective of the organization structure. This is the role of the ERP system. It is a system of integrated applications which empowers the management with accurate data on every business aspect to help them make informed decisions, and enables businesses to efficiently access, analyze, interpret, and execute the core activities of each department of the business on a day-to-day basis.
Its core business benefits are:
- Informed decision making: As an ERP system integrates all business management functions, it decreases the level of inconsistency in the information as otherwise found. Thus, an effective ERP system provides the management with accurate, consistent and instant business data to help them take appropriate decisions. This also strengthens the management’s control over the organization’s operations.
According to the Aberdeen Group, companies using modern ERP systems are able to increase on-time deliveries by 24%.
- Enhance productivity and flexibility: By integrating the core business processes together in one single application, the ERP system helps companies to maximize the efficiency of business operations across the organization.
Activities, procedures and workflows are well documented and due to the transparency in the system, it is duly adhered to. Moreover, centralized information and least chances of human errors lead to faster and higher business productivity.
- Reduce operational costs: An ERP system helps reduce costs because any previous delay or duplication of work is avoided. For example, a company may calculate their sales revenue using one type of software meanwhile using separate software to produce a financial report. An ERP system integrates the two actions whereby once the sales revenue is calculated, the ERP system uses the same information to produce a financial report. A benefit of having these separate processes integrated is that the same information flows from each department consistently which results in less errors made, in addition to better business decisions made. Resources such as time and staff are reduced (not to mention the complexity) which boosts the company’s bottom-line.
4. Higher security: In an effective ERP system, corporate data is available to those with authorization. Hence, it helps organizations to secure their data.
- When adopting or upgrading to an enterprise wide ERP system, You need to address these six questions: Costs & Benefits
- What is your budget?
- What is your business looking to achieve?
- What system(s) is your industry/competitor using?
- Are you looking to adopt/upgrade to keep pace with competition?
Training and Implementation
- How much time are you seeking for the ERP system to be up and running on its own?
- How much level of support are you looking for in an ERP partner?
If implemented appropriately, ERP can bring new avenues for businesses, building a strong foundation for their future growth and is thus a must for every growing business.
Overall, a complete ERP solution is a powerful tool for managing your business better. With the right ERP system, companies can hasten the decision-making process, simplify the operations and reduce costs. It also increases the managements control over the business activities and secures company data.
Nonetheless, it must also be noted that even though the benefits of a business ERP solution are limitless, it is a critical, time consuming and resource demanding solution to implement with a high failure rate of 21% as per the Panorama Study 2016. It might be good to note that there are certain missteps that IT leaders often make when choosing, deploying and implementing an ERP system, although there are ways to avoid them. Hence, choose your ERP partner wisely.