ERP Software
Published December 05th, 2016 by

10 Reasons Why ERP Is Important for Businesses and Organizations

10 Reasons Why ERP Is Important for Businesses and Organizations

The best ERP software revolutionized the way businesses streamline their workflows by integrating their processes and data under one central management system and document repository. The technology is mature in a sense that it is already effective enough to stabilize the operations on its own. But the opportunities are promising, and innovations are always underway.

How to Know When it’s About Time to Get One

What is an ERP software and how do you choose the right one? It is a huge capital investment for any business – in terms of cost, implementation expenditure, and associated risks. But having an ERP software doesn’t automatically solve your business woes. It should entail proper choice for a vendor, support from your employees, and a big capital upfront. Nonetheless, successful implementation will provide you a host of benefits that grows and improves as your business progresses.

Getting one requires you to weigh in on your needs, priorities, and business direction. Every business is unique regardless of the industry it is operating in, or the product it is selling. No two business have the same employees; therefore, how it operates vary as the skills, values, and competence of its organization differ. With this perspective, there is no concrete basis to measure your company’s urgency to get ERP software.

However, experiencing problems like inaccuracies and non-reconciliation in terms of finances, lack of collaboration among business systems, messy inventory, and declining customer relationship are some of the strong signals that you might need to consider implementing an ERP software. Aside from that, check if you are experiencing these signs:

  1. Your business’ processes lack a streamlined workflow.

You adopt quite a lot of software for each of your business processes and you cannot integrate them with each other. While some of your processes thrive, problems arise when there is at least one backslide or there is an error upon delegating data. This will create a ripple effect on the other processes. Your business deals with different front-to-end processes which may not be vertically-aligned because of the lack of integration. The software may also overlap with each other in terms of functionalities, making them cost-inefficient.

  1. There is lack of centralized access to information.

Each business process captures or yields the specific type of information which may be essential for other processes to function smoothly. The lack of central repository will cause delays whenever a data needs to be accessed. It will take time for the business process to produce and verify the data that another one needs. This may also introduce inaccuracies if the data sent is not updated.

  1. Accounting and other financial-related processes are slow.

Financial activities such as accounting are tedious and critical for any business. Aside from the inefficiencies of doing it manually, the process is slow as the staff verifies and reconciles the data manually. The different processes involved in accounting, sales and payroll will also entail data to be passed on. Any error commenced will produce a collective damage.

  1. Sales is slowing down.

Inventory and sales must always update each other. The mistake of some businesses is that they provide a separate system for both and forgot to integrate. Instead, the inventory system relies on cues from the sales, which may give them downtimes as they wait. On the other hand, sales may forget to update their inventory spreadsheets because they have other tasks to attend to. When a customer doesn’t get the item she saw in the store catalog because of lack of stocks, it could lead to a missed opportunity for present and even future sales.

  1. Customer relationship management is poor.

Another problem about the lack of centralized access to company information is that your customer service will be inefficient in addressing customer concerns. Customer inquiries vary in nature and degree of complexity. With no access to company information, the customer service representative might have to pass the customer to what department he or she thinks will help the customer. This is time-consuming – both on the customer’s and company’s end since the customer service should be the one handling it. This also implies an unreliable and unprofessional service which may damage your reputation.

  1. Your IT department has too much workload.

Having too many software systems to implement, maintain, and integrate with each other makes the IT department’s job more complex. Software customizations and training also add up to the strain. There are also a number of updates to keep up, and inefficiencies on this part will make your business run on legacy systems, putting you behind your competitors.

When you are a medium-scaled business and is currently adopting ERP software, it is also important to note that its average lifespan – or usability time, is around 7 to 10 years. So, if you see that you are nearing the deadline, it is best to consider an upgrade or of changing a vendor.

As separate systems are getting complex, a centralized solution in which you can implement and maintain all your business processes at once is a sound choice. Which ERP software is the best? Getting an ERP software that grows with your business and is flexible to address your need for efficiency, agility, reliability, and accessibility will help your business to respond more effectively its client’s ever-changing needs.

Benefits of Adopting an Enterprise Resource Planning Solution

An ERP system breaks all barriers when it comes to integrating core, operations, and administrative processes as well as centralizing all information repository and access. As the tasks involved in running a business become increasingly complex and grow in number, a unified solution will help the organization work collaboratively.  This ensures that the skills of your employees are maximized. By having the processes visible to them, they will become more proactive with their work. Reporting about the Key Performance Indicators (KPI) will also aid in more informed decisions.

Why is ERP software important? Aside from those mentioned, also expect the following benefits:

  1. Efficient execution of business process

Integration, as one of the core strengths of ERP software, sustains your business with efficiency in terms of execution. It is also easier to reconcile data since it will be coming from a single source. It also makes your departments continuously do their tasks without worrying whether the data they use are updated or not. There is a systematic turn-over of outcomes to be used for other processes, and workflows are streamlined.

  1. Employee productivity and flexibility

By omitting most of the manual processes, your employees will be more productive in executing those profit-concerning core tasks. With a tool to use, they can also be flexible to do more tasks at a time.

  1. Enhanced responsiveness to customer needs

Now that ERP software gives you access to a document repository for all non-confidential company information, your customer service department can effectively address customer inquiries and concerns. It is most likely that their questions are answered right away, which increases their satisfaction.

  1. Centralized data repository and management

The level of data consistency and credibility is significantly improved with a centralized repository. Departments can now update their data and it automatically updates across all the business processes using it. It also enhances the accessibility of information across your business network. Using cloud storage spans its accessibility through the internet using a desktop or mobile device.

  1. Application accessibility

Software-as-a-Service or SaaS is becoming popular and relatively a useful advancement for businesses. This enables small businesses to take advantage of enterprise solutions without the hefty price tag. This makes use of a third-party host to give the service and the business pay-per-use access. ERP solutions can now be in the form of a SaaS, giving more flexibility for businesses and with fewer responsibilities for maintenance and management.

  1. Enhanced data security

Cloud-based ERP systems boast of top-of-its-class data encryption technology which allows businesses to control access and data input, making it also excellent for storage and back up. In-house ERP software may also do the same, and may customize access either by the role or by the department. This way, the data’s integrity is maintained and users will be able to view and access the data that they only use.

  1. Improved organizational flexibility

Integrated systems make the organization flexible to adopt as the business scales and grows. ERP software is also ideal for projects which have varying requirements and time frame to work on. You also maintain the consistency of your project estimates and forecasts.

  1. Less complexity of IT-related work

The IT department can now be relieved of too much work when it comes to maintenance, integration, and updates.

  1. Process transparency

With ERP software, employees can take advantage of the visibility of processes and make them responsible for executing their work more efficiently and seeing its effect on the organization. This is also important for stakeholders because it increases their confidence with the company.

  1. Better system for compliance with government standards and regulations

It is easier to fulfill the heavy documentation requirements of compliance since everything is kept and updated to a centralized data repository. It is also possible to gain access to a traceable audit trail.

Why Is an ERP Essential for Sound Decision Making?

Dealing with a centralized system entitles you to capture important vast information – internally and externally – and subjecting it to analytics will give you better and more accurate reports. Data-driven reports are the keys for better decision making.

How do ERP software helps decision makers? It has a built-in dashboard which lets the manager oversee the KPIs in real-time. This way, he can take advantage of the opportunities as he sees it, and apply appropriate solutions as problems start to arise.

To maximize the full benefits of ERP software for your business, ensure that you made the right choice for a vendor. Remember that this is one of the most critical investments for your business, and you don’t want to miss out on making it right the first time you do. According to a Panorama Consulting Solutions’ commissioned ERP survey in 2015, the cost of ownership for ERP system has risen to 4.5 million from 2.8 million dollars from the previous year. How do you  choose ERP software for your organization? Choose the one that can scale with your business as it grows.

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