Blog

An organization is split into various departments which undertake specific functions. Traditionally, each department functioned independently towards achieving the same goal.

There were seemingly little inter-departmental interactions. The little information shared was either via email, phone or a plethora of paperwork.

Without a doubt, this was time-consuming besides being an arduous task. Moreover, data duplication was something you couldn’t miss.However, the emergence of Enterprise Resource Planning (ERP), aided businesses amicably. Its subsequent integration ensured business processes function with ease.

It also ensured real-time availability of data, further hastening critical ad hoc decision making. Enterprise Resource Planning is a massive software architecture. It seamlessly integrates organizational departments and facilitates better communication among departments.

Features of an ERP System

1. ERP is a Centralized System, not Decentralized

In a decentralized system, the sales department acquired a huge order, it proceeded to check with the storage and inventory department for product availability.

If the product is not available or is lowly stocked, they turn to the production or supply department to produce or acquire more.

The production team then gathers information from the inventory/storage department and proceeds to consult the finance department.

The finance department then places an order for item restocking. Now, this process is lengthy and the customer may have moved on to a competitor.In governance, administration and planning, a decentralized setup is ideal. Specific needs require specific attention from different professionals. This is ideal to achieve various goals. In the end, however, in business, a centralized setup is more logical.

Centralized information flow eases decision making. If decentralized, confusion is imminent, there will be no single picture to put to the frame. Time-lag and information corruption is bound to happen negatively impacting an organization.

2. It is User-friendly and Inclusive

ERP is easy to understand, operate and  even non-tech-savvy people can use it efficiently. The system is designed to meet the requirements of all relevant stakeholders in the company. From junior employees, all the way to the upper ranks are categorized as end-users.

3. Easily Customizable and Versatile

An ERP system doesn’t make an organization adapt, rather an organization customizes an ERP to suit its needs. Moreover, ERP systems can be implemented without incurring huge upfront costs hence ideal for organizations with financial constraints. Successful ERP implementation is hugely dependent on understanding business processes.

Arguably, ERP solutions possess the ability to forecast future trends. Which indeed makes it easier for businesses to adapt it accordingly since they are scalable. This feature makes task management easier and maintains workflow order creating a competitive stride in the corporate ecosystem!

How Can an ERP Boost Production?

Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning and focused effort.

– Paul J. Meyer

There are several ways in which an ERP can boost business productivity.

1. One Small Centralized Database, a Giant Leap in Productivity

Image Source: Netsuite

Several types of data exist within an organization; employee data, financial data, inventory management data, consumer data, production data etc., useful in creating, storing and management. Each of these data can also be shared within the relevant department.

For instance, employee data is shared by HR, Administration and Finance departments. However, an ERP system removes the need for each department to have a list. Rather, it fetches the list from one department and updates it accordingly. This data duplication is a thing of the past with a centralized database.

Centralizing your data into one improves the management, accessibility and the shareability of information. Departments can communicate in real-time ensuring business operations continue unhindered and uninterrupted. Workflow is also improved since operation processes are standardized across all departments.

Furthermore, if you are already operating in a lean setting, an ERP is still essential. It ensures you stay that way by automating manual processes. In the end, a few hours are used to complete a huge workload.

2. ERP Mobility and Cloud Upload Advantage

ERP on-site implementation and integration has been known to take up more storage space. This is not a positive aspect, more so if you are already running on limited storage capacity.

Fortunately, ERP can be uploaded to cloud storage spaces and managed from there. It enables companies with limited storage capabilities to get more work done from cloud-based platforms.Moreover, ERP is mobile and able to be deployed on the move. A wandering salesman can feed it from the cloud storage and update information for review by marketing executives back at the office.

This mobility serves to promote quick responses and decision making from relevant stakeholders.

3. Optimized Inventory Management and Automated Processes

An optimized inventory is the backbone of any business and ERP ensures it remains so. Knowing what you have in your inventory ensures you are working at the right capacity.

In addition, automating processes promotes efficiency and improves the quality of those processes. ERP tracking and monitoring will help you notice any mishaps and arrest potential issues. Therefore, reducing the chances of negatively impacting your productivity.

4. Cost-Effective

Incorporating ERP systems in your organization reduces operational cost. The cost reduction is related to inventory management and database administration. Each department can access organizational information from a centralized platform, making it easier to manage huge chunks of data.

There will be no need to employ data management services or hire experts to manage your data. Moreover, tracking inventory is made easier and there is no worry of data leaks from multiple centers.

5. High Business Intelligence

There is also a higher business intelligence since ERP software enables the constant influx of real-time data accessible to all stakeholders.

The information is spread across multiple channels (departments). It can be utilized to manage operations effectively in a flexible manner. In turn, productivity is boosted with better management and execution of directives.

6. Helps with Strategic Planning

Resource management is at the forefront of an organization’s success. An ERP serves this essential aspect of business operations. It puts available resources into optimum use ensuring productivity is not hampered.

It better plans the use of resources distributing it accordingly across the chain. This feature provides much further assistance to strategic planning by management.

7. Customer Satisfaction and Guarantee

In today’s fast-paced and dynamic business environment, customer satisfaction is the key driver of business success.

A business’ top priority ought to be providing quality services and solutions through its products.

An ERP assists businesses to understand customer needs, and thus act in their best interest. Hence, ERP integration helps to build consumer trust, maintain it as well as gain a competitive edge in the market.

Satisfied and loyal customers translate to increased sales which in turn lead to increased productivity.

Conclusion

The current economic climate has forced businesses to evaluate their lean and competitive abilities. The most essential aspects include technology integration and real-time data access.

ERP software is the solution for staying at the top of your competitors while boosting productivity. According to analysts, high initial costs may dampen ERP implementation, and the system being robust may face phishing attacks.

However, the aforementioned features and advantages counter the said disadvantages. In addition, the global ERP software market has grown exponentially, at a compounded rate of 7.2% in the years 2014 to 2020. Its market size has expanded well beyond US$40 billion, thanks to widespread integration.ERP systems are essentially comprehensive vehicles that serve one major purpose, utilize information.

They gather, edit, update and disseminate information comprehensively. They also provide in-depth analysis and accurate reports which assist in informed decision making.

ERP systems are a “cheat-sheet” to increase performance and amplify a brand’s presence in the corporate shark tank.

Without a doubt, ERP is the future of business technology – it is high time you incorporate it and transform your production capabilities.