The primary function of an ERP solution, or enterprise resource planning, is to incorporate business procedures and coordinate reporting across all departments. Of course, the right solution varies based on the industry and the particular needs of a business.
An ERP system improves efficiency in your business operations because each department will be able to get their hands on the same resources and information. This article examines ten ways that an ERP system can improve your business strategy.
Improved Planning/Decision Making
First of all, the primary benefit of an ERP system is enhanced planning and decision-making. Investing in an ERP system provides you with a set of tools for analyzing most, if not all, aspects of your business. Meaning supervisors will have the tools to make better decisions and implement more effective business strategies.
In addition, your staff will be able to access reports from any department. Functions across the entire business can be compared and analyzed without going through several different programs. Everything is right there in one database!
Faster Access to Reports/Analytics
If you don\’t have an ERP system, employees must use several different systems to generate reports. When compiling and merging data manually, you waste precious time and resources that are better spent elsewhere. This process ends up putting a damper on your productivity and slowing things down.
However, an ERP system can fix this issue because it pulls all pertinent information from every department into one central database. Then, once it has been gathered and stored in this database, all departments can access it. For example, your financials will be updated automatically with sales information—empowering the financial department to settle accounts and process reports as needed.
Provides a Total View of Your Entire Business
The supervisors and execs in your business will have a bird\’s-eye view of the business through comprehensive reports. Many of the ERP systems on the market also have web-based interfaces that offer tailored dashboards. Instead of waiting for an employee to complete a report, upper management can immediately see the information they need.
With information accessible in real-time, businesses can immediately address any concerns and create preemptive strategies to prevent things from getting worse. As we mentioned before, an ERP system provides improved planning and decision-making. However, it will also allow your business to confront any potential issues before they become too serious.
Automates Core Functions/Business Processes
You know that several everyday business tasks and processes must be completed when running a business. An ERP system can automate these tasks and procedures, which improves efficiency across all departments. Daily operations, human resources, and accounting are vastly improved.
In addition to automating these functions and processes, an ERP system can decrease those repetitive manual tasks—meaning your employees have more time to dedicate to other tasks. Therefore, workers are more engaged in their most important duties and business responsibilities.
Of course, this increases overall productivity and decreases errors. Since they\’ve saved all that time, your employees can focus on other areas that could use some improvement.
Streamlines Management of Customer Relationships
Did you know that 68% of customers stated that they would not do business with a company they felt didn\’t treat them right? Therefore, customer experience truly sets your business apart from all the others in your industry.
Many ERP systems also include some Customer Relationship Management, or CRM, features. With CRM tools, you can streamline various tasks related to customer service. For example, an ERP system can track:
- Customer transactions
- Requests for service
Of course, that\’s not all. An ERP system can also store information for sales leads, which means the sales team has a central location to access customer information.
While it\’s true that these features are beneficial for improving customer service and sales, the real benefit is the awareness sourced from this detailed customer information. When you can track your customers\’ actions, you can implement targeted marketing to increase customer acquisition and retention.
Improves Regulatory Compliance
Every country has regulations in place that are related to business operations. These regulations involve employee records, financial processes, and even taxes. An ERP system can improve your compliance with these regulations.
The recordkeeping tools and financial modules in the ERP system will be automatically updated to ensure that you remain in compliance with the regulations in your area. In addition, your employees don\’t have to spend as much time going over the rules and looking for errors—further proof that an ERP system can improve your business strategy by increasing efficiency and productivity.
Improves Collaboration Among Various Departments
Collaboration is significantly improved when everyone in your business has access to the same information. An ERP system includes workflow modules, allowing teams to view the same reports and share information among the departments.
Additionally, ERP systems often include features for project tracking. Each stage or task is updated as completed when you have an active project. Project managers and supervisors receive real-time updates, so they don\’t have to wait on an employee to let them know. An ERP system significantly improves communication, improving collaboration across your business.
Increases Security of Data
While it is accurate to say advanced technology has offered a lot of improvements when it comes to business practices, it has also opened businesses up to data breaches. According to the experts, 43% of cyberattacks are on small businesses.
In recent years, security has become a serious concern for all sizes and types of companies. In fact, according to research, a business falls victim to a ransomware attack every 14 seconds.
When information is shared across several different systems—and, perhaps, various networks—your security is compromised. Each time information passes through to another system, it becomes vulnerable. If just one of the programs is obsolete, the entire operation is open to compromise.
With an ERP system, everything resides in one central database with information backed up to integrated servers. Therefore, reducing the points of failure and improving security.
Boosts Employee Productivity and Morale
Are you aware that 85% of employees around the world don\’t feel engaged in their workplace? This lack of engagement cost businesses $450 to 500 billion per year. How can you help your employees feel more engaged?
Most of the ERP systems on the market also include tools that can automate and simplify various human resources tasks. When you free up your HR department employees, they can focus on more critical duties and responsibilities.
Suppose those employees don\’t have to file paperwork and worry about proper employee records. In that case, they can spend their time developing and implementing more successful employee training programs. In addition, when employees have needs or concerns, they can focus on fixing those. If your HR team is more efficient, the morale of your entire staff is improved. When your employees feel better about themselves and their role in your business, productivity boosts.
Improves Supply Chain Management
One of the most important things to consider is your delivery lead times when it comes to your business. Customers find this to be critical. If you can\’t deliver your products to them promptly, they typically don\’t stick around.
In addition to the CRM features, most ERP systems also include functions related to supply chain management. Allowing you to monitor production processes and track inventory levels in real-time.
When properly executing an ERP system, it will improve the following:
- Inventory management
- Forecasting of customer demand
- Shorten delivery lead times
When these processes are automated and tracked, you have fewer errors. You improve your overall customer satisfaction when you have fewer errors and faster delivery times.
Automating and tracking these processes also results in fewer errors. Fewer errors and timely deliveries tend to improve customer satisfaction.
When it comes to an ERP system, it\’s important to note that typically, this software is scalable. You can choose the features that your business needs and increase the functionality as your business needs evolve.
Additionally, the cost of ERP software means that businesses of all sizes can take advantage of it. There are free programs on the market that you can start with and eventually grow to an enterprise-level system.
One thing is for sure; GoldFinch ERP is an excellent option that scales as your business grows.