What is an ERP system?
Enterprise Resource Planning (ERP) systems begin with a shared database containing the information each company needs to manage its core processes. From accounting and finance, through warehousing, inventory, and production, to order processing and human resources management. Based on this shared data, ERP systems add various modules to automate and integrate workflows, monitor and analyze operations, and support faster, smarter, and better decisions.
Why should think about buying an ERP system?
There are various reasons to buy an ERP System. For example, some companies find that their existing systems do not allow them to handle processes simply and effectively (or not at all). Their accounting software cannot handle multi-entity accounting or is not compatible with a specific warehouse or inventory tool or system. For their growth, other companies need a system that requires fewer manual inputs and allows employees to engage in other tasks, with added value. Employees do not have to spend as much time on simple and manual processes and can spend more time on more complex tasks.
In general, most of the benefits of ERP systems could fall into the following categories:
- Direct and indirect cost savings,
- Opportunities to increase your revenue and
- Higher business efficiency.
Saving direct and indirect costs
ERP systems increase cost savings in several ways:
They simplify and automate complex business processes, saving many hours of manual labor. They reduce value-added processes and integrate functions throughout the enterprise, giving employees better information and the ability to adapt. They support standardized repeatable processes to help improve quality and reduce manual labor. They reduce the number of supplier relationships and save on licensing and integration requirements, application management, and reduce the need to train employees in various processes, as more software systems are replaced by one comprehensive solution. Choosing the right software-as-a-service (SaaS) cloud ERP system such as NetSuite, where a service provider manages infrastructure, performance, operability, and upgrades, reduces corporate IT accountability.
Opportunities to increase your revenue
ERP Systems can effectively manage sales by helping to ensure the right level of inventory to meet customer demand. At the same time, thanks to consistently offers better customer service, and brings client who are returning on regular base to your business. ERP allows your team to provide faster answers to customers’ questions, process orders faster and more accurately, including on-time delivery, and incorporate more self-service options so customers can shop with you whenever they want.
Thanks to a central database of all financial information, the ERP system can also help you identify the most profitable product, improve cash flow and predict demand.
Higher business efficiency
Today’s ERP systems increase business efficiency by supporting easier and faster collaboration, implementing best practices, automating business processes, and providing real-time data on company performance across teams. They help managers identify emerging trends and opportunities and support strategic and tactical decision making. Teams share the same data instead of manually integrating it from multiple sources of different ages and levels of accuracy. At the same time, ERP systems offer a platform for growth and change, which will help you present new offers or enter new markets faster and easier.
What are the common functions of ERP systems?
Many ERP systems are created as module systems. This will allow you to start with the basic functions and expand them as needed or select only specific modules associated with your industry or the characteristics of your business.
In addition to the core database, most ERP systems offer tools and functions for accounting, financial planning, supply chain management and supply chain communication, production management, customer relationship management, ordering and order fulfillment. ERP systems can also include analytics and business intelligence capabilities, workflow integration and automation and dashboards to make it easier for managers to access and control.
Are you thinking about implementing ERP? Let us know and we will be happy to advise you!
Source: NetSuite Oracle