What is an ERP System and Why is it Important for Your Business?
The world today is driven by digitization in its business processes. The technological advancements, software and tools come together to give businesses a competitive edge over competitors stuck in traditional practices. Let us introduce you with an all-in-one resource management solution for your business called an ERP system.
Ever wonder how global industrialists meticulously manage their businesses? The large-scale enterprises carry on with the complex operations with such ease. How do these enterprises operate? How are these businesses growing in such a short span of time? We observe that their hirings expand, leads maximize, new product launches, and customers roll in. There must be a continuous support system that assists with these complex tasks.
With an online presence over the internet, corporations and enterprises now look for ways to automate, integrate and effectively transform their business operations. For that matter, a business now uses a business management software called enterprise resource planning to automate the processes and save them from the hassle of manual activities.
What is an ERP System?
An enterprise resource planning (ERP) system is an automated and integrated solution for the enterprises wanting to manage their staff, inventory, finance, manufacturing and distribution. The system keeps track of your day-to-day activities and detects bugs or inadequacies within the operations to ensure a streamlined workflow with real-time reporting.
Mostly, the supply chain companies and industries with manufacturing and distribution challenges use the ERP system. On the other hand, the healthcare, non-profiled, construction or hospitality industries prefer an all-in-one solution for their business processes.
Why Do You Need an ERP System?
An ERP system attends to the unique needs and challenges of your business. If you are still confused about why you need an ERP software then consider the following conditions and rethink your stance:
- Your employees remain stuck with complex tasks
- You wish for easy access to the data
- The company remains stuck with multiple suppliers and vendors
- You need multiple applications and programs to run the business
- Hard to keep track of the inventory and sales
- Retrieval of data is time-taking and hectic
- Staff is stuck with filing and documentation
- Difficult to access confidential data at any time
- Failure to identify issues and bugs within the system
Types of ERP System
ERP system works best for small or big businesses. Small business ERP is the ultimate business management solution devised so that it meets the mid-sized company’s needs. While in case of big business ERP, the deployed software solutions are tailored to meet various resource needs. In order for this to function smoothly, the ERP software extends its various types of deployment models. Let’s discuss the types of ERP systems: On-Premise, Cloud-based, or Hybrid.
On-Premise ERP System
As the term suggests, the on-premise software type is implemented on-site and is managed from within the confines of physical office space. In fact, the system is run on the computer or servers used by the particular organizations offering complete solutions and control for the entire business resource system.
Cloud-based ERP System
In cloud-based ERP software, everything happens over the cloud. It is a service as a software (SaaS) that gives a complete database solution for any organization to be accessed from anywhere. Basically, the software provider particularly supports continuous data storage, retrieval, and update.
Hybrid ERP System
The third type is most suitable for an enterprise wanting to expand its business potential. It is about exploring the highest range of ERP software. A hybrid model is the combination of a cloud-based and on-premise system. Here, the resource provider crafts the ERP model with integrated and enhanced flexibility to deliver precision not achieved with a single model.
So look for a vendor who understands your business type and offers the most suitable deployment model type for your organization. Whether on-site, cloud, or hybrid, an ERP system takes over all the hassle for your business processes and provides an integrated solution to carry on with your business processes.
The Importance of ERP System
Are you looking for an integrated system to carry on with your business processes with complete security and accuracy? If you wish for a system that would manage multiple business modules at once without the hassle of manual record-keeping, then ERP is your only choice. This software attends to the business’s unique needs and operates efficiently without outside management from an IT team. Be it a large enterprise or a small business, the ERP system facilitates organizations to automate their routine finances, manage employee bases, or store company data with complete security.
Here’s a list of key modules that your ERP system would seamlessly support
ERP facilitates finance and accounts management for businesses to look over their current finances and predict future prospects. It helps organizations manage their accounts information, pay dues, and secure documents, sheets, reports or receipt statements.
Moreover, the software becomes an automated database to streamline billing, routine finances, payments and revenue management. It diverts the HR department from constant documentation and shifts its focus to an integrated system that helps through finances and accounts management. Finally, the profit and loss statements help you gauge your business’s overall ROI.
Supply Chain Management
Supply chain management is apparently most tricky for businesses. Businesses demand expert resource persons to keep track of all the goods and supplies. Yet, it lacks the precision achieved through automated ERP software. With an ERP system, the organizations easily track step-by-step movements of their supplies and goods from manufacturers, supply-chain suppliers, and distributors to consumers or retail industrialists.
The system coordinates the entire cycle of the supply chain, such as manufacturing, inventory management, the ordering process and warehouse management.
Human Resources Management
ERP system takes over your workforce management hassle and offers a comprehensive automated CRM system to manage employees. It keeps a tab on the employee documents, payroll system, performance and offers letters. Also, it manages complete employee working hours and monthly attendance records. On the top, the system contains individual employee records and discards duplicate reports or inaccurate information recorded within the portal.
ERP solutions offer complete production management and manufacturing plans such as; infrastructure, raw materials, machinery, and the production of goods and services. Here, the system records the manufacturing process and statistics per daily production output. Also, we keep track of processed goods, finished product details and supply-demand.
Well, that is not all, an ERP system has several more important characteristics such as:
- Asset management
- Big data analytics
- Service management
- Internet of things
- Project management
- Customer relationship management
- Business Intelligence
The latest research suggests that 81% of the companies are now pivoting to an ERP system. So why do you think the system is gaining so much popularity. It is because the software offers tons of benefits for your business.
Let us discuss how ERP manages an entire enterprise system in a single database.
An ERP system stores and manages real-time information. There is no chance for errors or glitches within the system. It is a single database for the entire team to access easily from anywhere in the world. Therefore, remote teams prefer an ERP system to keep tabs on the business process and receive accurate insights on the ROI. The system aids managers and stakeholders in accessing the confidential data and info to gauge the KPIs through easy access to the company ERP dashboard.
Your business can easily do tasks such as managing the inventory, tracking the manufactured products, managing the employee base and positioning them for multiple duties. Also, the resource program allows you to track employee behaviour, note the working hours, manage their payroll, receive automated financial reports and manage employee benefits.
All-in-all, the program reduces human resource work to an automated system. For instance, your employees get to focus on the core tasks without having to report manually. Also, your IT team can focus on the main functionalities rather than manually generating company data and reports. Basically, it is an integrated human resource management system aiding in the new hires or managing the old staff.
Forget about hiring a business intelligence team and using an ERP system as your BI tool. Basically, the ERP system allows your company to input data and information into the system and receive real-time reports and statistics on various projects. It is an easier and more responsive system that does not require human activity and reduces months of work into just a few clicks. However, it is essential to have a fully functioning ERP system that keeps a record of your years old reports.
When you log into the system, it becomes your central database for all the income statements, key performance indicators, generated expenses and detailed insight into the complex processes. In addition, the system has built-in filters. Precisely, the vendor develops a strong resource program that fits all your business needs.
Customer Relationship Management
How about an integrated CRM system within the ERP software? ERP system extends its efficacy into managing customer relations. This key module covers inventory’s sales and marketing hassle and provides live statistics on leads and conversions alongside order reports, history, generating quotes and closed deals. Basically, the built-in tools help track the inventory at multiple warehouses, transportation and trucking to stock details.
Let’s face it, we all look for shortcuts in our routine activities. ERP is one such system that reduces human work and automates business activities with digital solutions. You get to manage an extensive employee base with an efficient ERP system. For instance, the program helps with:
- Effective inventory planning
- Improved procurement management
- Streamlined customers support
- Enhanced vendor relationships
Moreover, applying a unified system to the enterprise saves your employee base from operating across multiple platforms. In short, you save on the expenses of recruiting and training employees for a single system. If used right, the ERP is your organization’s robot that takes over all your enterprise resource management.
Let us conclude this discussion with the argument that an ERP system saves you from wasting time, money and effort. Rather, it automates your business processes to ensure maximized revenue, coupled with increased ROIs. Sourcing Square is an all-rounder ERP software developer to aid businesses with streamlined functioning and implementation.
So bring your business needs to our table and watch us tailor the most suitable ERP software model for your business type.