Because of its centralized approach to business processes, enterprise resource planning (ERP software) is rapidly gaining popularity in small and large companies. It allows different departments of a company to work together towards a common goal.
ERP software is not something that many companies are familiar with. An ERP can optimize workflows and may be just what you are looking for.
What is Enterprise Resource Planning (ERP), and How Does it Work?
Software and enterprise resource planning definitions can be interchanged.
“System” refers to the complexity of business software. Software, on the other hand, is the general term for computer codes. It includes simple programs created by one developer as well as complex systems used by corporations and governments.
These definitions are out of the way. Let’s now answer the question, “What is an ERP system?”
A system called enterprise resource planning is software or a system that streamlines and automates your business processes. It stores manage and interprets business data. This software automates back-office and cross-departmental processes.
Enterprise resource planning (ERP), which allows departments to share one database, is a competitive advantage. This database is placed on one platform or ERP. Your accounting department can then access the data of the sales department to help manage accounts payable.
Enterprise Resource Planning Example
Research predicts that the global cloud-based ERP market in 2028 will be worth 47760.01 million USD. This is based on a 17.10% CAGR between 2022 and 2028.
These two players are important.
- SAP ECC ERP provides a complete solution to supply chain management, product lifecycle management, human capital, finance, and CRM. It can be on-premise or cloud-based. For additional features, it can also be integrated with third-party apps.
- Arion ERP is a business suite that can handle a variety of functions such as enterprise resource planning (ERP), customer relationship management (CRM), and human capital management.
Do you need an enterprise resource planning system?
Although ERP technology is useful for all businesses, not all organizations need it. How can you tell if an ERP technology is right for your company?
The reasons enterprise resource planning is so important to have to do with the following issues. An ERP is required if you experience any of these conditions.
-
Software is used for business processes but does not scale
Small businesses can manage five programs. A growing business will need more. Without technical skills, software integration can be complicated. ERP applications can centralize the processes of your company and increase efficiency. They also allow for once-off system upgrades, which reduces IT management costs.
-
Data management is becoming more difficult
For established and expanding businesses, continuous data production is important. An expanding client base and more staff mean more data that must be managed efficiently. An ERP can streamline the flow of paperwork and automate data management operations.
-
Your departments must collaborate seamlessly
A company that has more than one department needs to communicate and exchange information. A company can grow quickly by having access to data from other departments. Employees can work more efficiently and with less stress when using an ERP.
-
Complex inventory management is required
If you sell, you need to have the best inventory management. Stock is essential for clients. They also need timely shipments. An ERP software system allows employees, departments, and locations to track inventory and submit data. This helps you monitor warehouses and makes informed decisions.
Who uses Enterprise Resource Planning Software?
ERP is a business software solution that takes into account the nature of your business as well as the processes within it.
These industries are primarily using ERP systems:
- Accounting
- Farms and agriculture
- Business Intelligence
- Construction
- Education sector
- More
In the meantime, ERP system users can be divided into tiers.
- Multinational private corporations or federal corporations
- Large companies without significant global reach
- Local governments
- Medium-sized Businesses
- Smaller businesses may only require the most basic features such as customer support and sales.
What to Consider When Choosing an ERP Software
Let’s say you have analyzed the benefits and costs of an ERP system and believe it will increase profits. These are some ways to maximize your ROI.
-
Find out if your computer needs an upgrade or replacement
Evaluate whether an upgrade or a new ERP system is necessary. Modular ERP systems allow you to add payroll to existing applications, such as Salesforce. This reduces interruptions and costs. Replace it if your system is older than ten years.
-
Look for vendors that offer a training and deployment service
Technical installation is required for on-premise ERPs. Your vendor should help you install and deploy the ERP if you do not have a technical team. Check your SLA. SaaS ERP, meanwhile, involves activating a vendor server account. ERPs can be complex and require extensive training. Make sure you ask your vendor if they offer it.
-
Use to create robust dashboards and reporting
Avoid PDFs and spreadsheets. ERPs produce regional financial statements. Agile and ad-hoc reporting offers in-system queries and smart filters as well as real-time data. You should look for dashboards that provide quantitative and qualitative data on users, jobs, and departments, as well as drill-down KPIs.
-
Make sure your ERP is easy to customize
Different cultures and priorities may exist in different departments. Therefore, align ERP with your workflows. Every department has its own workflow. Look for ERP that allows customization, local dashboards, and flexible processes to allow departments to design the ERP according to their needs.
-
Get an ERP that integrates with all your systems
Integration with business apps is a requirement for ERP systems. You should evaluate top-to-bottom integration points such as system-to–system, module–to-system, and file transfer. An ERP that is versatile can be used with existing infrastructure to increase its functionality or replace it while ensuring easy file and record migration.
How can you maximize your enterprise resource planning software?
Cloud ERP solutions are becoming more popular, but they can be costly and complex for companies. How can you optimize your ERP software system’s potential?
These are some tips to optimize your resource planning systems.
-
Regularly review business processes
Business systems can be broken by bad processes that make it impossible for even the most sophisticated system to work. Documenting corporate processes can reveal misaligned expectations and technology. Eliminate ERP-related tasks from outside systems. Talk to your vendor and partner about automating, integrating, and simplifying.
-
Identify potential issues that may need to be addressed with organizational change
ERP is a barrier to teams. They’ll organize and record data in the non-ERP database. Employee resistance to change can affect ERP performance. Recognizing and dealing with such resistance can improve operations. After assessing the problems in your organization, you can create a plan for change management.
-
Offer targeted ERP training
Even the most effective system will not work without end-users. Many ERP users can be left untrained by turnover. To help employees learn throughout the ERP’s lifetime, create a training program. Your ERP training plan should be based on best practices to ensure that users are productive.
-
Make an upgrade strategy
Take a look at the system. ERP companies invest heavily in the updating of their systems with new functionality, service packs, and lessons learned. Your company should ensure that your ERP solution is up-to-date on a regular basis.
-
Enhance ERP functionality
ERP can be enhanced by customization, add-ons, and bolt-ons. Business needs and gaps may be met by upgrading. ERP with material requirements planning II (MRP II) extends functionality.
Learn how to leverage an ERP
It is difficult to emphasize enough the importance of enterprise resource planning systems (ERP). The Internet of Things (IoT), which revolutionized ERP today, opened up new opportunities for operational excellence as well as workflow automation. This allows an ERP system to collect accurate, real-time data from any internet-connected device or machine, increasing your efficiency.
ERP is a good choice if your company has a well-designed workflow but it’s difficult to manage. Poorly designed processes will result in useless, automated workflows for companies that are not prepared for ERP.
Arion ERP has been successfully deploying ERP systems to businesses of all sizes. We have a proven process that will guarantee you the best ERP implementation experience. Get in touch with us to learn more about ERP and how it can help your business.