The use cases for Enterprise Resource Planning (ERP) systems are numerous. Because the software runs your entire operation, its versatility means that companies of all types can benefit.
The overall benefits of ERP software are clear. Based on a unified database, an ERP uses functionality that drives all aspects of your business and delivers immediate value via business intelligence insights and efficiency gains. But exactly what role the ERP software has in delivering these benefits is best evidenced through use cases. Here are seven specific use cases showing how companies can benefit from implementing an ERP.
1. Finance
Working with an array of different spreadsheets, consider a company selling direct to customers. Without the financial management capabilities of an ERP system, it has to manually track purchase orders and customer orders, making things time-consuming and error-prone.
With an ERP system, not only are all the accounts receivable and accounts payable transactions recorded automatically, but the general ledger is also fully managed, and the company directors have immediate and more visible insight into the company’s finances. This allows them to exert greater control over their cash flow and expenditure. The finance team can easily and quickly generate important reports and documents, like balance sheets and profit and loss statements, without having to laboriously slave over a jumble of spreadsheets.
2. Stock management
Without stock management software, a retailer would have to rely on physical stock counts, probably tracked in a spreadsheet, with little certainty about precise current stock levels or location of stock. This could result in slow fulfilment, customer order issues and frequent out of stock situations.
With stock management in an ERP system, the retailer will have confidence that its stock situation is accurate. It would be able to see real-time stock levels and would have a better insight into when to order additional stock, and how much. This would avoid out of stock situations and order fulfilment would be faster as items could be easily and quickly located – meaning operatives could get more orders out the day each day.
3. Purchasing
In this use case scenario, a manufacturer without an ERP may perhaps spend a great deal of time researching potential suppliers and obtaining quotes for component parts, raw materials or ingredients. Staff then need to manually assess the quotes and set up purchase orders, plus update a list of approved suppliers with contact information.
With the purchasing module of an ERP, processes can be automated. Requests for quotes can be automatically sent, then stored along with the responses, and purchases orders can then be issued with just a few mouse clicks. The ERP maintains the list of suppliers and the manufacturer can easily track the progress of purchase orders. This whole process is much improved and the amount of staff time that must be invested in the procurement process is dramatically reduced.
4. Customer Relationship Management (CRM)
Let’s take the example of an international distributor who is losing business to competitors. To increase revenue, it wants to try to cross-sell and upsell to existing clients, and also find new customers. However, it is not capturing new prospects’ details and the data on its existing customers just isn’t available without a great deal of manual sorting through orders and logging them against customer lists.
Instead, with the CRM module of an ERP, prospects that complete forms on the distributor’s website are automatically added into the CRM, and the sales department can be notified so that they can manage sales leads and opportunities. All previous order history is collated by the system, allowing for analysis and data collection in future – for example, to upgrade previous customers when their purchases are a certain length of time old, or to target a cross-sell to those that have previously bought a certain item. This increases the revenue potential for the distributor and mitigates the impact of the competition.
5. Project management
A growing professional services firm is beginning to struggle with tracking time, costs and resources for its increasing roster of clients. This makes billing more difficult, time-consuming and liable to inaccuracy. Invoices are sent out late or with errors, and time and cost estimates for new projects are slow and complicated to calculate.
The project management module of an ERP system tracks all this data for each project. Consultants can quickly ascertain the project status, and billing hours are tracked, along with expenses and client communications. Automatic invoicing can be set up, triggered at project milestones or set intervals.
6. Asset management
Tech startups with funding are apt to grow quickly. Perhaps some new investment means that more staff can be employed, meaning a requirement for additional office equipment, such as computers or laptops, telephones and mobile devices, desks, chairs and filing cabinets. There might even be a move to larger premises.
An ERP asset management module can manage these assets – as capital allowances and depreciation – throughout their lifecycle. The startup can use the ERP to keep records of the value of the equipment, office costs – whether rented or purchased – and to take care of the associated tax and capital gains reliefs. This ensures compliance and adherence to accounting standards.
7. Ecommerce
Our final example looks at a B2B distributor that decides to explore additional revenue streams. It identifies that it can gain from offering its products direct to the end consumer – the businesses its distributors currently sell to – and looks to set up an ecommerce channel.
Using the ecommerce module of its ERP system, its existing website can be modified into an online store. Products can easily be added and updated and other ecommerce aspects, such as order information, stock management and CRM – also included in the ERP – are all integrated. This means that all sales and payment information flows directly into the ERP and is logged and accounted for.
Conclusion
These are just some of the use cases for an ERP system. Other use cases involve and improve areas such as: sales and marketing, manufacturing, supply chain management, and compliance monitoring. On top of this, all businesses can benefit from the advanced business intelligence the software incorporates, the automated reporting functionality and the multiplier effects of having an integrated system that touches all parts of the business.
NetSuite is capable of all these use cases, with some of the functionality coming via the core system, other areas from the optional modules. More than 22,000 businesses – across all industry types – in more than 200 countries worldwide run NetSuite.
If you would like to become another example of a great use case for ERP, book an appointment now or contact us for a free business consultation or a quote tailored to your needs.
