Benefits of using ERP system
According to research by experts from Software Suggest Let's find out 11 benefits that the best ERP system will bring to business management efficiency:
- Increase productivity:
49% of organizations reported that ERP implementation improved all core business processes. Only 5% of businesses reported no improvement. Productivity can be significantly increased with ERP systems. Some repetitive tasks can be automated, freeing up employees to focus on projects that are more valuable to the company and helping employees complete their tasks faster by simplifying processes and reducing the time spent searching for information. Employees do not need to ask around for relevant data or analyze how processes work because ERP provides visibility. Increased productivity means that you will not need to hire as many employees as you would without an ERP system. Employees can take on new projects and focus on tasks that truly utilize their skills and expertise as a large amount of work such as summarizing, statistics, and creating repetitive reports has been done by the system.
- Reduce operating costs:
According to statistics, ERP software reduces administrative costs by 22%. ERP can help save costs and increase profits in every area of your company, from manufacturing to accounting, by improving the efficiency of operational processes. The price of ERP can range from a few thousand dollars to several hundred thousand dollars or more, depending on the system and the size of the business. However, it is a worthy investment if the business can increase work efficiency and make effective and wise action decisions. By entering data once, data can be transferred immediately to the relevant departments instead of having to enter it manually. Furthermore, if you spend more money on distributed systems than centralized ERP, you can save money on IT across the board. The need for end-user training is also reduced when using a single system because they only need to understand one system instead of interacting with multiple individual applications and needing to integrate the systems together which is extremely complex and potentially risky.
- Comprehensive Completion:
Knowing where a company stands in terms of inventory levels allows managers to track cash flow more accurately. Furthermore, having all of a company’s information in one place allows for better collaboration and faster completion of complex tasks. This comprehensive visibility improves workflow and allows for efficient tracking of inter-departmental processes. One of the key benefits of ERP software is that it provides complete access to every essential or critical business process by providing accurate data to managers from every unit (branch, factory, site, store, etc.). This allows management to monitor inventory levels on a regular basis, weekly or monthly, along with future shipments.
- Centralized data:
Since everything is stored in one software, you will not have any problems running reports or analyzing data because everything has the same layout. A centralized ERP system has enabled 80% of businesses to create new applications together. Therefore, with centralized information, you can get all the facts you need to make better decisions, helping the organization save as much money and time as possible. Without such a system, data is often scattered throughout the company in many different applications and spreadsheets. This process often creates duplicate data in many formats, adding to the problems.
- Scalability and Flexibility:
ERP systems, regardless of size, allow you to add more users and upgrade data packages as your company grows. Some cloud-based ERP systems benefit employees by allowing them to use the system remotely at any time and from any location as long as they have internet access, allowing them to make decisions quickly. Scalability is one of the main advantages of enterprise resource planning systems. ERP solutions are designed to accommodate businesses of all shapes and sizes, allowing users to customize the system to meet their own needs, such as unique processes or atypical KPIs.
- Improved reporting and planning:
One of the key benefits of an ERP system, in addition to improved visibility, is better real-time business intelligence. A single unified reporting system for all processes is available when your company implements an ERP suite across all teams. Reporting and analytics can be provided at any time with an ERP system that has a single source of information. With ERP software that has BI functionality, companies can gain a deeper understanding of the analytics of their processes. These insights aid in business planning by highlighting strengths and problem areas. Providing users with this holistic view of their company’s data allows them to make more informed decisions based on models and metrics, reporting, and planning are key features of an ERP system.
- Enhance cooperation:
Collaboration is a key element in any successful business. However, most businesses find their teams working in silos simply because workplace communication is more time-consuming and energy-consuming. That’s why ERP can significantly increase productivity and satisfaction among your employees, partners, and customers. ERP platforms simplify collaboration by giving employees access to the information they need when they want it. They provide a cross-departmental database where information flows across departments and is centralized. This distribution allows for real-time data updates and improves collaboration within the business. With the right ERP system in place, every employee has instant access to all of the company’s data, allowing them to make better decisions.
- Promote data security:
According to Toolbox, companies are now suffering up to 90% more financial losses due to security breaches than they did four years ago. Therefore, using ERP software that enhances information security is a must. Enhanced data security also aids in regulatory compliance, and the integrated reporting tools mentioned above can help reduce audit costs. Data security is at the core of modern ERP software. Restrictions on who can view and update sensitive information are built into ERP systems that span multiple systems and business functions. Combining all business data into a single repository, either on-premises or in the cloud, increases security compared to having sources scattered across different systems.
- Improve customer service:
Most modern ERP systems today offer e-commerce platform integration. This integration allows companies to manage web-based order fulfillment and better manage customer relationships. By storing all relevant sales and customer information in one place, sales managers and customer service staff can interact with customers more easily and respond to their requests faster.
- Compliance:
Having accurate, up-to-date, easily accessible, and analyzed data can significantly reduce the effort required to comply with any regulations your organization is subject to. This increases visibility because all the information an auditor might want to review is immediately available. Some new ERP systems can even handle financial standards like GAAP or regulations like the Sarbanes-Oxley Act (SOX). The best systems will also keep you up to date with any changes to these requirements, ensuring you stay compliant. Compliance can be a challenge, especially in highly regulated industries, but ERP makes it easier.
- Supply chain optimization:
ERP systems help businesses with physical goods movement and manufacturing in a variety of ways. This improvement results in faster processing times, more on-time deliveries, and many other benefits that support your company’s core operations and performance. A well-designed ERP system can help your supply chain operations become smoother and more responsive by improving demand forecasting, inventory management, purchasing, and other functions. You can also save money and develop new products with a simplified supply chain, giving your company a much-needed competitive advantage. Additionally, ERP systems can significantly improve profits while reducing the cost of overpaying for inventory and production. Inventory levels can be optimized by using a centralized system that provides visibility into sales, production, and delivery times rather than relying on “best guess” forecasts of upcoming quantities. SCM monitoring should be at the top of the list of advantages of an ERP system, especially in today's times.
