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Why an ERP System is Important to Your Company

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Why is an ERP System Important to Your Company?

ERP Systems are important to your company because it allows you to streamline your workflow and address a number of pain points in day-to-day operations. With these software solutions at your disposal, you can speed up customer accommodation, eliminate repetitive back-office processes, consolidate data more efficiently, and improve team communication.

Why is an ERP system important to your company? It helps you improve business performance by simplifying operations and consolidating all your company’s information in one convenient platform. But how exactly will it be of use to your business? To help you further understand the significance of ERP platforms, we will be discussing what these software solutions can and can’t do as well as the benefits that it has to offer. Furthermore, we will be listing down the leading examples of ERP solutions to help you get started on looking for one for your operations.

Why an ERP System is Important

Enterprise Resource Planning or ERP software solutions have been around for ages. With its prevalence on the market, there is a good chance that you have an idea of what it can do for your business. But do you know exactly how significant having one is for your business?

In a study published on IGI Global, results show that ERP systems offer plenty of operational, strategic, and organizational benefits. This ranges from reducing costs and shortening cycle times to improving supply management and standardizing work processes. On top of these, ERP systems offer a number of intangible benefits such as higher employee morale and better company image.

No wonder many companies implement ERP systems to improve their business performance (17%) and position their company for growth (12%). These software solutions serve as comprehensive tools that let you integrate the different aspects of your operations in one convenient platform. With these at your disposal, you are sure to simplify your work while ensuring quality products and services.

Source: Source: Panorama Consulting

Are you interested in purchasing an ERP solution but are not sure if it is useful for your company? In this article, we will be discussing the practical uses of these platforms in order to help you understand why an ERP system is important to your company. This way, you can get a better idea of how you can put their features to use and what kinds of benefits you can reap from them.

Industries That Benefit Most From an ERP System

ERP systems have practical uses for different kinds of businesses because of the many tools they have to offer. However, not all companies require all the features of an ERP suite. So, these platforms may be more beneficial to some industries than others. More often than not, those who can maximize these tools are businesses that tackle multiple tasks every day using different software solutions. Some examples are:

  1. Manufacturing. The production of goods for other businesses involves a lot of processes. With an ERP system, you get a better visibility of business transactions and progress of operations. This is because these platforms can consolidate the information from different aspects of your business. This way, you are always in the loop about what’s going on in your manufacturing plant without requiring in-depth reports from your staff on a daily basis.
  2. Construction. Other than the actual act of building structures, construction companies also have a number of back-office responsibilities to take care of. This is why they require multi-functional applications like ERP systems. These can help them with project management and inventory tracking as well as accounting and service management. Having such a tool as part of their arsenal of business software can reduce their clerical tasks so they can allot more time for their projects.
  3. Logistics. Transporting cargo in a safe and timely manner is a difficult task as it is. It becomes even more challenging when you have to consider the details of each freight you have to handle while gauging the schedule of your drivers and measuring the capacity of your delivery vehicles. ERP systems that are created specifically for logistics often integrate delivery planning and management tools, communication features, and order processing options into one platform for you. It even lets you maintain a customer database so it’s easier to look up finished and ongoing deliveries.
  4. Healthcare. Clinics, hospitals, and other medical facilities can get busy, making it difficult for staff members to maintain quality patient care while keeping track of back-office responsibilities. With the implementation of the right ERP software, compiling and organizing data as well as other necessary clerical work won’t take too much time or effort, and the staff can focus on monitoring and treating patients.
  5. Retail. When it comes to the distribution and sale of goods to the public, it only takes a simple mistake to ruin the flow of your operations. Countless things require your undivided attention, but there’s only so much you and your employees can do simultaneously. This is where ERP systems come in handy. From coordinating with manufacturers and distributors to tracking shipments and managing inventory, these tools help you make sure that you, your customers, and your business partners are happy.

SYSPRO dashboard showing the status of production operations.

Pain Points ERP Systems Solve

No doubt, ERP systems are indispensable tools for all types of businesses that require different tools for various operational tasks. In order to further understand its features, we have compiled some of the many pain points that these platforms can solve:

  1. Separate Systems for Related Operational Tasks. Many entrepreneurs find themselves juggling multiple software solutions for their daily business operations. However, jumping from one platform to another can take up a lot of time and doing so can make your operations more vulnerable to the risk of human error. Using an ERP can streamline your workflow by providing all the tools you require in one interface. This makes your daily operations faster and more efficient, all while reducing errors. Moreover, by maintaining one platform instead of separate systems, you can save a lot on operational costs.
  2. Delayed Customer Accommodation. Being too preoccupied with back-office tasks leave you little time to concentrate on front-of-house duties. This hinders entrepreneurs and their employees to accommodate their customers’ needs and make timely decisions with regards to their concerns. Eventually, this leads to reduced customer retention as well as slower lead conversions. Through an ERP system, you can leverage the combined power of CRM and project management tools to serve your customers better. These features should give your staff members access to all the information they need to help your clients as promptly as possible.
  3. Time-Consuming Inventory Management. Keeping your inventory fully stocked while making sure that you don’t waste any supplies is one of the biggest challenges that entrepreneurs encounter on a regular basis. It is a tedious task that requires great attention to detail. Luckily, with ERP systems, you will no longer have to monitor your supplies manually. These platforms come with inventory management features that will allow you to monitor changes in supply levels as they happen and gauge when to reorder stocks accurately.
  4. Fussy Financial Data Consolidation. Money goes in and out of your business daily. If you don’t have an ERP system, there’s a good chance that you are keeping tabs on these numbers using different software solutions. While this may work during your first few years in the business, it can get more and more demanding as your sales grow. This strategy makes bookkeeping and financial tracking exhausting for you and your accountants. With an ERP platform by your side, you can consolidate financial data automatically, so you can review all the information without having to check multiple systems.
  5. Data Inaccuracies. Manual paper processes can lead to inevitable typing errors and inconsistencies in your business information. Using ERP platforms, you can eliminate the chances of duplicates and lessen typos. On top of that, you can even reduce your carbon footprint because these software solutions will let you handle these processes digitally. You may even store them in an online database that can be accessed whenever and wherever you wish.
  6. Unorganized Team Communication. Collaboration is everything if you want your business to run smoothly. To do this, you will need to have a secure and reliable means of communication. Using ERP systems, you can get access to in-software communication tools that enable you to delegate tasks, facilitate group chats, and accommodate your file sharing needs. This way, you can manage more projects efficiently and be more proactive in your operations.

Odoo has a scalable interface with configurable features making it a good option for teams that require a flexible ERP system.

Misconceptions About ERP Systems

Catchy ads and quick product summaries can certainly grasp the attention of companies that are looking for ERP programs. However, without the presence of comprehensive product guides, users tend to misunderstand what these platforms are and what they aren’t. Here are some misconceptions about ERP systems that you should know about:

  1. ERP Systems Are Only Suited for Large Companies. Just because a majority of the ERP solutions out there are created for large firms doesn’t mean that your small or medium-sized company can’t benefit from it. Most of these platforms are designed to be scalable so that fast-growing businesses won’t have to replace their software solutions each time they see an increase in clientele. This goes to show that no matter how big your company or how extensive your operations may be, there are available options for you.
  2. ERP Systems Are Expensive. ERP systems are composed of multiple modules, so a lot of individuals expect them to have a high price tag. But the truth is that if you look hard enough, you are sure to find software providers who offer affordable basic ERP platforms. There are even those that offer them for free.
  3. ERP Systems Do Everything For You. While ERP systems are equipped to automate tasks, users shouldn’t expect these platforms to handle all aspects of your business for you. This technology still relies on your input, so it is up to you to understand how you can make these software solutions work for you. The best way to do this is by taking the time to learn the system and taking advantage of the tutorials and other informative resources that software providers offer.

Sage Intacct dashboard showing the income and expenditures in relation to the active projects of a company

Examples of ERP Systems

Now that we have answered why an ERP system is important to your company, are you ready to start browsing for one? If so, we have compiled some great examples of this software to help you begin your search. These were selected according to their flexibility, affordability, as well as the quality of the features they provide. Should you want more options to choose from, feel free to check out our list of top 20 ERP tools or simply browse through our extensive list of ERP software reviews.

  1. NetSuite ERP. NetSuite ERP is a platform that caters to the needs of high-growing medium-sized and large businesses. Known for its scalability and robust features, this ERP solution is capable of automating both front- and back-office processes to help you work smarter. Be it payment management, inventory control, billing and invoicing, accounting, or manufacturing management, this tool has you covered. Should you be interested in this product, contact the vendor for a quote. You can also sign up for a NetSuite ERP free demo here to test out its features before you subscribe to a plan.
  2. Sage Intacct. A cloud-based ERP application, Sage Intacct can handle basic accounting, asset tracking, project management, and workflow planning. It is programmed to help users improve the overall performance of your operations, simplify financial tasks, and boost the productivity of your employees. Sage Intacct is available at a minimum of $400/month for small businesses and $10,000/month for large enterprises.
  3. SYSPRO. A trusted name in ERP for over 40 years, SYSPRO is a system built for businesses in the manufacturing sector. It integrates and synchronizes your operations without needing to jump from software to software. From accounting management and work scheduling to inventory optimization and document planning, it can give you all the tools you need for your business. Accessible on both desktop and mobile devices, this can be deployed on-premise or on the cloud for your convenience. To take advantage of this product, contact the vendor for a quote.
  4. Odoo. Serving as a universal solution for operations, Odoo can handle everything from CRM and sales to project management and HR. With this at your disposal, you can easily perform a wide variety of tasks without having to jump from platform to platform. It is designed to cater to the needs of all business sizes from all industries, so you can rest assured that this can adapt to your company’s requirements with ease. Furthermore, Odoo has a modular interface that can support a wide variety of plug-ins so you can pad up the system with the tools you need. Another thing that makes it great is that it has an affordable starting rate of €10/month.
  5. Oracle ERP Cloud. An end-to-end business management solution, Oracle ERP Cloud is a cloud-hosted software that aims to streamline all sorts of business processes. It aims to help users automate core operational tasks, simplify compliance and risk management, and increase overall productivity. No matter what industry you are in, be it IT, finance, marketing, telecommunication, or pharmaceutical, this tool can also scale up and down depending on your needs. For pricing, they have different enterprise pricing plans that range from $80/user/month to $175/user/month depending on the modules you need.
  6. Witty Educational Institute Management. Built for academic institutions, Witty Educational Institution Management covers all the bases to effectively manage a school. This comprehensive educational management platform has tools for managing one’s workforce, students, payroll, and parent-teacher communications. With its automation tools, Witty can do most of the heavy lifting so you no longer have to worry about mundane tasks and work processes, thus, you can dedicate more of your efforts in improving your academic programs and meeting your financial goals. Contact the company to learn about their pricing information.

Oracle ERP Cloud offers a variety of comprehensive modules such as this invoicing system.

Conclusion

The modern business landscape has increasingly become fast-paced, making it difficult for enterprises to keep up. By using ERP systems, you can not only accelerate your operations but also become more efficient in achieving your business goals. Now that you know why an ERP system is important to your company, all you need to do is find one that suits your business model. If you want to learn more about what these platforms can do for your business, be sure to check out our article on the features of ERP systems. This should give you a more in-depth insight into the different functions of ERP platforms.

How to Choose an ERP System

Before you go ahead and choose an enterprise resource planning tool, let us first walk you through the process of picking one for your company. There are hundreds software providers out there offering quality ERP systems, so it can be quite overwhelming to zero in on which product works best for you. To help you out, we have created a step-by-step guide that you can follow as you browse for a platform for your business. We have even detailed some of the factors that you might want to consider in terms of features and subscription options.

  1. Take a close look at the features of the platform. ERP systems may have different sets of features but it is important that you have all the essential tools for your operations. It should be able to perform financial management, HR management, data reporting, inventory management, marketing management, and sales management. Aside from making sure that these features are present in the platform you are interested in, you also have to check it for industry-specific features. For example, if you own a factory or manufacturing plant, it is important that the ERP system offer production management options. If you are in the retail industry, then, you might find POS functionalities handy for your operations. The bottomline here is that you need to check if the system comes with specialized features that can improve your operations.
  2. Gauge if the platform can help you meet your company goals. Every business have set long-term goals. So, it is important to find an ERP system that will allow you to achieve them. For instance, if your ultimate goal is to expand your local business into an international conglomerate, then, you wouldn’t purchase a platform that is made for small businesses as they won’t be able to support your needs in the future. Similarly, if you intend on branching out to different industries, you shouldn’t choose an industry-specific ERP platform that do not offer integration support.
  3. Determine the flexibility of the system’s structure. Another thing you will want to consider is the flexibility of your prospective ERP system. It is important that you pick a platform that will be able to adapt to your business’ changing needs. Can it integrate with third-party systems? Will you be able to configure the platform without technical assistance? Do they offer different deployment options? Is the interface mobile-ready? These are only some of the questions that you might want to ask the vendor before you purchase their ERP tool.  
  4. Assess the system requirements. The last thing you want is to purchase a software that is not compatible with your hardware. Not only is it costly to purchase new devices for your operations; learning how these equipment work can also eat up a huge chunk of your time. Before purchasing any software, be sure to learn more about its system requirements. To start with, check what kind of operating system can support it as well as how powerful your computer processor should be.
  5. Ask the vendor about subscription inclusions. To cap off our guide, you should assess an ERP platform’s price carefully. Don’t just opt for the most affordable product on the market; choose the product that offers the most bang for your buck. Look out for vendors offering subscription plans that are not limited to just the software itself. They should also include services such as free customer support, product updates, and routine maintenance.  
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