The concept of ERP or Enterprise Resource Planning has been around for years, but sadly, it is often misunderstood or associated with a costly and lengthy implementation, complexity, and an inability to be tailored to individual business needs.
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Much more than simply an accounts or finance package, an effective ERP system is used to manage and integrate data from all of your core business processes.
It allows you to manage all of the key aspects of your business with a single system, including your accounts, HR & payroll, CRM, inventory & supply chain, manufacturing, project management, resource allocation, and more.
However, it shouldn’t stop there. At the same time as effectively allowing you to manage and automate your core business processes, ERP software should inform your key business decisions, create operational efficiencies and help colleagues across departments to work and collaborate more effectively.
Enterprise-grade software for non-enterprises
Historically, and as the ‘E’ suggests, ERP software was only for enterprises of a certain size, with their scale and large budgets allowing them to invest the large sums required to develop the solution.
On-premise implementation costs alone would be out of the reach of less sizeable organisations, not even mentioning the ongoing expensive maintenance contracts, hardware demands and compliance/integration issues.
But as technology has evolved, significant levels of functionality are now accessible and within reach of relatively modest sized businesses. Today’s digital and mobile world requires ERP solutions that are more integrated, more agile, and more accessible – and the cloud is meeting these needs.
We are seeing a shift away from legacy on-premise ERP systems to ones featuring modern technology architectures with easily accessible data. Cloud ERP is accessed from anywhere, easier to deploy, simpler to manage, and provides a good return on investment.
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Organisations can enjoy reduced capital expenditure with cloud-based solutions; they don’t need to invest in servers and storage, or buy licences upfront that they might not need straight away. Instead they pay for what they use monthly or annually on a subscription basis.
Plus with no servers to maintain, and the software being upgraded automatically, expensive maintenance contracts are a thing of the past. As a result, ERP, and all the added functionality that comes with it, is now affordable to ‘non-enterprises’.
This finally puts less sizeable businesses on a level playing field with their enterprise-sized competitors.
Improve and automate your business process
Implementing ERP software provides businesses with the opportunity to improve and enhance their existing processes and working practices. It allows them to introduce automation and create workflows to eradicate routine manual and paper-based processes.
Benefits of ERP include increased efficiency and better communication. Historically each department in a company would have their own separate system designed to complete their own tasks, resulting in inefficiency across the organisation and poor communication between departments. ERP software eradicates this problem by linking key processes in a single solution.
And when everyone’s using the same system, rather than working with several different point solutions and spreadsheets, duplicated effort is significantly reduced. This means staff are freed up to focus on more productive tasks. The risk of errors is also greatly reduced.
Other improvements might include accelerated sales, optimised inventory and improved cash collection, all of which have a direct impact on the bottom line.
Using an agile cloud-based system also allows you to think outside of the restricted procedures you have been used to; it provides a real opportunity for blue sky thinking.
Real visibility into data and KPIs
Whether a company is selling products or services online, over the phone or in-person, linking the front-end with the back-office, operations and supply chain can be incredibly powerful.
For example, if you have an eCommerce website that is linked to your customer service, sales & marketing, order management, and finance functions, then you are able to gain a real 360 degree view of your customers and prospects, and truly personalise and improve your service.
Likewise, improved inventory management in the warehouse not only leads to fewer ‘out-of-stocks’ but also reduces the level of cash tied up in stock and provides the sales team with a real-time view of availability & lead times.
When each department has their own separate system designed to complete their own tasks, this means they can only see the business data that is stored within that system.
However, it may be beneficial that members of other departments can view certain data that is contained within the accounting software, for example. They don’t need full access, but it would be handy for them to see certain information. A member of the sales team might need to know how much a customer paid for their last order, but this means they have to go and ask one of the accounts team to find out this information.
With ERP software, all the information is in the same system so each employee can see what they need to see without disturbing other teams. This doesn’t mean that everyone has access to everything – you can, of course, set restrictions which means each employee only has access to the information they actually need to complete their own roles.
Dashboards and role-centred interfaces help to make life for users across business functions straightforward and that’s essential when user-adoption is critical for any successful deployment.
A good ERP will provide powerful reporting tools and search capabilities because it will incorporate key data from across the whole business. This means that real-time, accurate reports can be created on key aspects of a business.
This is critical in driving decision-making, budgeting and strategic direction. Not to mention building competitive advantage by responding more quickly and effectively to customer expectations and market changes.
No disparate solutions to manage
If businesses purchase stand-alone point solutions, then these all need to be managed and maintained. One of the biggest downsides of having multiple systems across a business is that IT management can become a nightmare. Customising these systems, integrating them and maintaining them with patches and upgrades can be complex, costly and use up critical time and resources.
And when various front- and back-end systems run separately, it can wreak havoc on the processes that are meant to ensure your company is running smoothly.
ERP software integrates these systems so that every business function relies on a single database, which means companies only have one system to worry about. And with cloud-based ERP, upgrades take place automatically as part of the subscription.
Room to grow
Most ERP software is scalable and usually modular in design (particularly cloud-based ERP), so users can continue to build on their system as their company grows and their requirements change.
Whilst many point solutions are great for small and medium businesses, they may start to struggle to cope as a business grows, and users may start to find they are lacking the functionality they really need. Cloud ERP allows companies to easily add more users and functionality as and when it is required.
Much more flexible and customisable than it was in the past, ERP nowadays can be tailored to a business’ unique needs.
It looks like we’re going to continue to see an increasing number of less sizeable companies opting for cloud ERP solutions as they seek to enhance and automate their business processes and improve visibility into their key data and KPIs.
Do you have anything to add to this article? Let us know in the comments box below!
NoBlue provides NetSuite ERP, which is ideal for growing companies as well as larger enterprises looking to run their entire business with a single cloud-based solution. If you’d like to discuss your ERP requirement, please don’t hesitate to get in touch.
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