What is an ERP Software ?
ERP is a software that integrates all the departments in an organization which in turn helps to maintain a standard work-flow, giving complete details on day to day activities. ERP benefits in optimum utilization of the resources and thus improves the overall efficiency in delivering quality products.
An ERP handles each and every process involved in an organization, put together under a single software. It saves much more of your time and eases the work of every department while they depend on the data from other departments. Thus it provides good communication, eliminating repetitive processes by establishing a standard workflow. This helps employees to make maximum utilization of the resources as well as to keep track of the materials in stock avoiding the last minute hassles.
Benefits of ERP :
Once implemented, you can expect the following benefits from an ERP system.
Maximized Resource Management :
As the name says, enterprise resource planning software is entirely used for proper utilization of resources. It enables you to plan every resource in terms of equipment, materials and employee allocation. The production equipment and machines are properly scheduled for its availability ensuring maximum output. The raw materials are planned accordingly to the requirement hence without wasting much investment on over stocking. The workforce calendar is set as per the project’s deadline thus predicting exact capacity of the shop floor. All these results in the maximum resource management and better forecasting of sales as well.
Increased Productivity :
Productivity is nothing but the final outcome of the process. In order to get good productivity, all the sequential tasks involved in the process should be done without any interruption. By automating major tasks, there is more time for the employees to focus on other critical factors. The manual entries that consumed employees’ work hours can now be replaced with software tools thus eliminating errors. Hence productivity is gradually increased with the help of automated processes.
Simplified workflow :
Each industry has its own unique operations and manufacturing sectors involve many complex business operations. The ERP is designed in a way to establish a collaboration within an organization’s department to ensure a centralized database. The complete historical database is being fed to the ERP thus creating a standard workflow through master data. This, in future, helps employees work under sequential tasks without any disputes.
Better Inventory Tracking :
Inventory tracking is a big challenge to companies constantly dealing with a huge number of products coming in and going out. Manufacturing, retail, trading and ecommerce kind of businesses maintain a store facility that needs proper optimization. The ERP software has a module for inventory where it keeps data of all items in the store with respect to the date of purchase and specific location in order to retrieve later. Better inventory tracking prevents a lot of mess during the production process.
Reduced cost :
ERP is a one time investment that could give you a tremendous profit in the long run. Once you start using the software you can see visible results in many areas. Through proper utilization of available resources, machine hours and timely decisions that are made, we can prevent any delay in productivity thus reducing the overall operation cost. Also with the accurate reports and advanced forecasting it helps us to manage budgets more efficiently. With efficient use of ERP’s reports and business insights, a better financial plan can be achieved. Knowing what to buy, when to buy and how much to buy, a company can greatly reduce its operational cost.
Total visibility on real time data :
ERP’s master data is the one time entry of crucial business data. Once it is entered, it will be carried on with all the future projects hence following an error free method. At the same time all the historical data helps provide a complete business insight and good sales forecasting. As the day to day activities are entered from each and every department, the ERP could provide you exact real time data under a single click. Knowing what is currently happening in your organization and the status of the ongoing projects helps in business improvements.
Enhanced Reporting :
One of the biggest ERP benefits is reports. With a centralized and real time database an ERP could produce accurate reports. It has more features to represent the data visually. This gives you a more clear view on business analytics resulting in timely and better decision making. The ERP can also be integrated with third party business intelligence tools.
Improved efficiency and Quality :
Improved efficiency is the major reason one would adopt ERP software. Centralized database ensures everyone works under the same page hence improving communication between departments. Any issue that arises in the shop floor can be given attention immediately for a quick decision. The maintenance of inventory as well as machines are great help for an uninterrupted production. Quality inspection allows a mandatory quality check to all inward materials and produced goods. All these enhance the efficiency and quality of finished goods.
Data security and Reliability :
The ERP comes in 2 types on premises and cloud platforms. The software vendors offer high security to both platforms as data is the heart of ERP concept. The ERP admin is allowed to restrict access to the employees in terms of editing the entries. This prevents data loss from the masters. Unlike you have heard, the cloud vendors offer a double degree of protection for the servers around the clock. Thus the data is highly secured and reliable.
Supply Chain Management :
For companies dealing with more inventory and physical items moving in and out, an ERP is a great benefit. It improves the performance with reduced lead times and on time deliveries. The supply chain management improves the overall operations and becomes more responsive with improved demand forecasting, inventory management and procurement. To sustain your loyal customers, to meet their demands on time a well defined ERP software is essential.
Customer service :
Among many competitors in the market, it is very crucial for businesses to keep an eye on ever changing needs of the customers. To gain more customers we should constantly adapt to new technologies and processes in no time, where the ERP benefits to achieve this easily. By efficient process control and quality products that are delivered on time, results in sustaining loyal customers over the long run.
Risk management :
Every business has to take some risk in the process of creating new products. With an ERP system you can eliminate those errors with greater visibility and control over operational details. The ERP’s built in forecasting feature helps you to see through every single detail on the new process and comes up with suggestions on which areas to be optimized.
There are plenty of ERP benefits to your business. To say in simple words, in today’s business environment, an ERP is a must for any organization (despite its size) to meet customer needs and stand out from their competitors.
Still confused whether your organization would need an ERP ? – Well, we could suggest you some list of questions to ask yourself to determine how valuable an ERP would be for your company.
- Are you able to provide on time deliveries to your customers ?
- Is your inventory level optimized as per your production capacity ?
- Are you good at predicting sales ?
- How well are your resources being optimized to gain maximum output ?
- How easier is it to retrieve an item from your store ?
- How accurate are your business reports ?
- Are you satisfied with your company’s growth ?
- How often do you get good feedback from your customer ?
- Are you looking for better ways to reduce cost ?
- Do you feel it is difficult to generate the right invoices with correct calculations ?
I think this blog has given enough thoughts and ideas on how beneficial an ERP is to your company. Now if your answer is a yes I need an ERP to my company then the next bigger challenge would be choosing the right one. Do not worry, we are here to help you in that aspect. Feel free to contact us for a demo now! It is nothing to be worried about to spend a few hours exploring more opportunities that might help your business growth.