ERP System – Benefits & Features

One of the main characteristics of the contemporary business arena is having organizations that are required to perform several actions quickly in a hassle freeway. These business activities are not only a process of managing the internal systems, rather they determine the efficiency of the organizations as a whole. Thus, in this context, some software such as ‘Enterprise Resource Planning’ or ERP systems refers to one such software that enables companies to undertake and perform day-to-day business actions like accounting, risk management, supply-chain management and several others. Apart from these regular actions, a complete enterprise resource planning enterprise is equipped with performance management features..

These features help in performing activities related to a company’s finances, like planning, budgeting and risk prediction, more efficiently.

What is an ERP Systems: Importance & Overview

The phrase ‘ERP Systems’ is an abbreviated version of the Enterprise Resource Planning system. This system refers to software designed to manage regular business activities of the user organization which includes its finances, supply chain management, risk management, manufacturing methods, human resources and several others. While all companies irrespective of their size and industry already have certain operational software for performing such regular business actions, most of these are not built to provide future business growth.

The continuous change in the business structure tends to expand the internal sector of business activities within an organization, for which the software structure should be adept and up to date.

The Modern-day ERP softwares are formulated to bring about all the business activities in one single coherent structure which gives the internal system of a company, the required fluidity.

To understand the importance of ERP systems within a company, it is essential to enumerate the features that the software provides. This explanation can be given in the following manner:-

• The software system comes with hassle-free deployment options which make it easier for companies to use.
• There is a drastic increase in the security and privacy provided to the data of the user organization.
• The system is quite sustainable and pocket friendly because of the different plans in which the software can be bought and implemented.
• The ERP system is most importantly designed to build certain fluidity in the internal business processes. This in turn helps in the development of actionable insights which consequently facilitate the process of rapid productivity growth.

Top Benefits of ERP Systems

The evolved ERP Systems of modern times are designed to aid in the completion of regular business activities along with performing core functions within an organizational environment. This in turn proves to be monumental in breaking the barriers between the front desk and the manufacturing departments of the company. Subsequently, one of the major benefits of ERP Systems available to the user organization is the ability to adjust and adapt new solutions to the evolved priorities of the business.

In contemporary times, ERP solutions are utilized by several industries across the global market. The companies working within these industrial sectors receive equal benefits from ERP system implementation. These industrial sectors can be listed in the following way:-

• Trade and Commerce
• Human Resource Management
• Finance Management
• Manufacturing
• Supply Chain Management

The beneficial aspects of utilizing the ERP System features in these sectors can be individually explained in the following way:-

• Trade and Commerce – With the globalization of the business arena, companies within the trade sector, deal with several issues across the world. An advanced ERP solution can provide a unified solution to all these issues and also increase customer satisfaction. The personalized recommendations generated through artificial intelligence within the software can provide hassle-free shopping experiences to the customers. Along with this, the user organization will be able to increase the individual productivity of their employees in addition to the reduction of fraud.

• Finance Management – The evolved ERP solutions help to drive compliance. This is achieved by the process of creating visual dashboards and real-time insights based on artificial intelligence. Subsequently, the user organization can view its internal financial structure by looking into the insights from any location without the expenditure of manual labor.

• Human Resource Management – Organizations in the human resource sector also receive benefits from the ERP Systems. The software provides methods to manage the organizational data related to employee payrolls, hiring structure and other responsibilities. This gives companies a better position for retaining, recruiting, empowering employees, tracking individual performances and identifying issues before they even occur.

• Manufacturing – The ERP Systems have a track record of helping companies in the manufacturing sector, in improving their business communication methods and automating the other daily business activities through robotic methods. This provides the manufacturing companies with the opportunity to fulfill the customer demands and manage the resources better through the assessment of data in real-time. 

• Supply Chain Management – The companies that tend to enter supply chain information and warehouse details manually have the scope of saving a lot of time and finances by automating these activities through the ERP system. The evolved versions of this software also provide abilities like creating dashboards, business intelligence and IoT technology for handling the stocks of organizations working within the supply chain sector.

But, despite the fact that modern businesses need ERP Systems more than ever, it is found that only 40% of manufacturers across industries make use of an ERP system and many businesses fail in their ERP software implementation projects.

How ERP software improves business processes

The ERP softwares are formulated to increase the efficiency of a company and reduce the costs incurred for regular business activities. These software improve business processes by doing the following:-

• Completing more work on time
• Decreasing the inventory cost
• Ending the formation of purchase errors
• Increasing productivity
• Accurately determining the job costs
• Creating a comprehensive cash flow
• Lowering operational costs.
• The user company can manage all business activities through a single system.
• The updates of the ERP Systems are user friendly.
• The data of various business processes are streamlined to provide easy direct access.
• Among the benefits of the ERP system, the ability to analyze the business data is included.
• The user companies can additionally, meet the customer expectations.

ERP Systems for Startups: An account of the benefits

As a startup company is surrounded by several issues all at once, the implementation of an ERP system can provide certain crucial benefits. These can be categorized in the following way:-

• Facilitating the process of managing business and administrative activities within the new company.
• Creates a centralized platform for all business activities from the very beginning.
• Keeps the management updated regarding the crucial operating figures and the cash flow.
• The new company can have the opportunity to concentrate on other essential requirements apart from the regular business actions.

Importance of the ERP Systems during Covid 19 pandemic

Covid 19 pandemic forced organizations to implement work from home policies along with maintaining a consistent supply chain management structure for meeting the changing customer demands. The ability of an ERP system to tackle abrupt changes in business structure was put to test during these trying times and the software delivered quite well. Thus the pandemic was monumental in highlighting one of the biggest benefits of The ERP system, namely, its ability to maintain continuity in business structure.

The ability to access the internal business operations of a user company from a remote location was extremely helpful for organizations in keeping their business afloat.

According to Software Advice, only 38% of the manufacturers and distributors across multiple verticals (like pharmaceuticals, machinery industry, food/beverages etc.) have an ERP system in place.

ERP Systems usage in the Banking Sector

The ERP Systems are well suited for the banking sector because of the data-oriented nature of their features. As the software can integrate various data entities within the banking process, it can create unified results which later increase the productivity of the organization. Subsequently, the insights created from the unified data structure can help the banks to make well-informed decisions in future.

Popular ERP Systems: A discussion of Dynamics 365 Business Central ERP 

Some of the popular ERP solutions available in the market include the following:-

• SAP
• ORACLE
• Microsoft
• Information
• IFS and others

Among the popular ERP solutions available, the Dynamics 365 Business Central is gaining more popularity as it offers number of benefits over other ERP softwares. The reasons for its popularity in comparison to others can be categorized in the following way:-

• It is more flexible than other ERP Systems
• The software consists of enriched business intelligence.
• It can perform enhanced customer relationships management.
• The Dynamics 365 business central integrates with all other Microsoft services.
• The cloud-based solution is more cost-effective than the others available in the market.

How to Decide if Your Business is ready for ERP implementation –

The benefits of the ERP system are quite extensive including the ability to increase the productivity of the user organization, coherence in the internal business activities and subsequently increased profit-making ability. The software can perform all regular business functions along with creating financial inventories, tackling human resources and creating an integrated structure of all internal departments of a company.

But on the other hand, at times the process of ERP system implementation can be a long process time and Finance consuming process. This is the reason why organizations need to make sure that they are ready to successfully implement ERP software within their system. While it is easier said than done, certain steps can be followed in determining whether the company in question is ready to implement an ERP system in a hassle free way. These steps can be enumerated as follows:-

• Assessment of the current technology used – The review of the present technologies used by the organization is extremely necessary for determining whether there is any need for ERP Systems. Although the benefits of the ERP system are varied, the implementation can be expensive and a complete loss for a company that does not require it. At times, the existing technology used by the company lacks to deliver the desired performance because of the absence of updated installations or training programs among employees. For such companies, there is a need for installing updates of their existing software rather than a new ERP system.

• Evaluating the Future requirements – The business strategy plan designed by each organization is an approximate evaluation of the expectations the business owners and employees have from the organization in the future. In relevance to such expectations, the need for information technology will also differ. An assessment of such needs is to be made thoroughly before deciding on the need for ERP system implementation.

• Formulating a cost-benefit assessment – Implementing new ERP software can be expensive for some companies. Thus, it is advised that the interested company should perform a detailed financial analysis of the proposed implementation. These analysis needs to firstly cover the influence of the existing problems on the financial structure of the company. Secondly, the cost of updating the existing system to solve the issues must be determined. Finally, this cost must be considered with the total expense required for implementing a new ERP system. This would help the company in making a more informed decision.