Enterprise resource planning (ERP) systems are a mainstay of many companies' internal operations. In a tech-driven world, it's easy to become overwhelmed with a disparity of disconnected applications and software solutions. This can silo information, make data analysis difficult, and isolate your workforce.
If you want to streamline your tech activity, an ERP system can be a great way to do so. Whether you're using an ERP solution already or you're new to the term, it's important that you understand what an ERP can do, how it helps you, and how you can perfect the results of your company's ERP system.
ERP Systems: Definition and Benefits
An ERP system is a software solution that extends like a net across an entire company. It encompasses a variety of business activities, including:
Billing and payroll;
Invoicing and payments;
Budgeting and financial analysis;
Purchasing and cash management;
Supply chain and inventory management;
Manufacturing planning, scheduling, and production.
ERP systems are designed to capture data and integrate it into a single, overarching system that shares the same, updated data pool. ERP integration further ensures that SaaS apps and third-party software are adequately integrated into a larger ERP system, further unifying all of their data.
ERP systems are valuable, as they allow a company to see all of the resource-related activities required to run a business from a single location. These are presented in a dashboard that simplifies the resource planning process.
While ERP systems aren't necessarily new on the scene, modern updates have made them more effective. Of particular note is the ability to access many ERP solutions in a cloud-based format. This is ideal for the growing number of remote-friendly workplaces around the globe.
Using an ERP can have several benefits for a company. For example, they can:
Improve collaboration through the free flow of information and communication between different areas of a business.
Boost productivity through the removal of menial tasks.
Perfect supply chain and warehouse management through a single program that can oversee supply and demand across a company and forecast ordering needs.
Reduce the waste that comes from duplicating siloed information from one department to the next.
Help to scale an enterprise without wasting resources throughout the growth process.
Enhance both employee and customer satisfaction through on-time payments, efficient accounting activity, and easy-to-access CRM (customer relationship management) information.
Keep shareholders happy through diverse, accurate reporting of real-time company data provided by a single-source system.
Foster a growth-oriented mindset of perpetual improvement and continual learning through comprehensive, company-wide data collection and analysis.
While a cutting-edge ERP system can be a game-changer for any company, it isn't a magic bullet. You want to ensure that your organization's ERP system is running efficiently in order for it to be effective.
How to Improve the Efficiency of Your ERP System
An ERP system is only helpful if it's effective. Here are several areas that companies should address if they want an ERP system, either brand new or already in existence, to deliver premium results.
Automate and Standardize Where You Can
One major benefit of an ERP system is that it can automate menial tasks. This could be something like translating across language barriers in a multinational company. It could just as easily consist of executing orders according to local branch specifications and then propagating the data across a company's international network.
Automating time-consuming activities like these doesn't just make using the system easier. It can also free up employees and employers alike to focus on more important activities.
ERP systems can also be used to standardize tasks across a larger organization. It's easy to get lost in an overly complex web of hyper-specified activities that vary from one location to the next. By standardizing how things are done via your ERP system, you can streamline your organization's activity and boost productivity in the process.
Utilize Analytics On a Regular Basis
One of the best things about an ERP system is that they serve as a vast depository for data. This reflects information from across your entire business, from accounting to HR, supply chain management, and so on.
This offers an ideal opportunity to analyze your company's data. This has always been the case with ERP systems. However, past analysis was formulaic and restricted. Modern, dynamic ERP systems can generate customized reports with real-time, accurate data.
The best part is, by using an ERP, you don't have to worry about incorrect or outdated information. This is often a concern with companies that use siloed applications in different departments. An ERP will not only make all of that information accessible from any touchpoint. It will also reconcile it and ensure that every department, report, and analysis has correct, up-to-date data at all times.
Don't Overachieve With Your ERP
An ERP system is powerful. It can integrate numerous departments, bringing together their information and providing a synergistic boost to your business activity. However, an ERP system can also slow you down if you try to use every aspect of its capabilities.
Every company has different needs. These can vary based on things like how you operate, how large your company is, or what products or services you offer. For instance, a retailer of pool supplies will need an ERP system that can track supply chain and warehousing for physical inventory. An e-commerce retailer selling digital content won't need a physical component of this nature.
That is an obvious example, but there are other times that things can be more nuanced. When you go to utilize your ERP system, consider how useful each feature is to your particular business. Do your employees need universal access to certain information, or is it okay to leave it outside of your larger network? By trimming away the fat, you can keep your ERP system lean and mean as it helps you address true challenges and problem areas in your enterprise.
Using Your ERP System to Succeed
ERP systems can service a variety of different companies and industries. However, not every situation is the same. On the contrary, often in order to get the most out of an ERP, you need to tailor it to your particular needs.
This includes automating and standardizing tasks that reduce your employee's workloads. It also requires collecting and analyzing the data that can spur you toward continual improvement. Focus on those activities and avoid the temptation to use excess or needless aspects of your ERP system. If you can do that, you can ensure that you're getting the most productivity possible out of your enterprise resource planning efforts.