Enterprise resource planning (ERP) doesn't come cheap.
For example, businesses can pay anywhere between $150,000 and $10 million for implementation alone! Then there the costs of database management, infrastructure updates and ongoing ERP-related expenses to cover as well.
Clearly, an ERP system is a major financial investment. On top of all the other essential business overheads, this expense might seem unfeasible. It can be tempting to try and run the business without ERP in place.
Before you settle on that decision though, it's worth running a costs-benefits analysis. Indeed, ERP systems offer a plethora of benefits to any company that utilizes one.
Interested in finding out more?
Keep reading to discover the top benefits of ERP for your business.
What is ERP?
Let's begin with a look at ERP itself.
An initial definition should help someone new to ERP better understand the benefits involved.
As we've already noted, ERP is an acronym for enterprise resource management.
The clue to its purpose is in the name. ERP systems are designed to facilitate the management of core business activities. Everything from accounting and finance to project management and compliance can be effectively controlled and supervised using the software.
These essential and diverse systems are brought together into one place. Processes are streamlined and access to up-to-date information is simplified.
All told, ERPs offer a host of advantages to any company that utilizes them.
5 Top Benefits of ERP for Business
Time to move on to how ERP can support the running of your company.
If you're ever in need of advice and problem-solving, then an ERP consultant, such as Epicor Consultants, can help. For now, let's consider the benefits of using the systems themselves.
1. Access to Information
ERPs offer total visibility across the organisation.
All data and information are accessible by each department. As opposed to individual offices working in silo, one system integrates everything into a single location. This unification simplifies teamwork and facilitates decision-making across the company.
For example, someone from finance is able to identify how budgets are being spent by each separate department. If there are any problems, they can work to create a solution. With the ERP, that information would have been far harder to come by.
Such insight is invaluable for management purposes. They can be a fly on the wall, looking into the happenings of the entire company from a strategic vantage point. That enables sound decision making, accurate tracking of company matters, and greater efficiency all-round.
2. Reduced Costs
As we've seen, ERP systems are expensive to set up.
However, once they're in place they can provide numerous cost-savings elsewhere.
For example, all IT matters are brought into one centralised location. Multiple IT systems are no longer required to cater for varying needs. That means fewer technicians needed to maintain it, and less training for employees. After all, there's only one system in place to maintain and get trained on. This inevitably leads to financial savings.
It's also worth noting the cost benefits of an efficient system. Unifying complex business activities makes everyone's life easier. Complexity is a recipe of mistakes, and mistakes cost money. Furthermore, any problems that do occur are easy to identify.
Managers can see where exactly in the organisation an issue originates from. Rapid discovery of problems mitigates the potential financial fall-out from them.
3. Straightforward Product Tracking
ERP systems provide 'eyes-on' to the movement of products.
Inventory can be tracked in real-time. From start to finish it's possible to see where exactly a product is through the business. It's simply a matter of checking a dashboard on the screen. Every element can be observed and traced. From orders to inventory, and onto revenue, managers can keep an eye on it all.
That has a major impact on the delivery of a product or service. Delivery times are of the essence these days. The quicker the better. Imagine how much harder it would be to enhance delivery times without an ERP system (and the tracking abilities it provides) in place.
4. Ability to Follow the Rules
The ability to accurately track all aspects of a business has knock-on benefits.
For example, consider the numerous government regulations almost every business must abide by. It's essential to have near instant access to financial accounts, users' personal data and so on. ERP systems allow companies to generate reports at the push of a button.
Being able to track products makes it easier to identify where and when particular problems might have occurred too. They can then take active steps to stop any problems happening again. This is a particular help in abiding by quality control standards.
Non-compliance becomes a non-issue as ERP systems cover you from the outset.
5. Increased Data Security
ERP systems provide companies with far greater security over sensitive data.
That's good news for both the organisation and the customers that provide their personal information to them. ERPS simple provide greater protection from both internal and external threats versus unsecured services like Google Documents. For instance, user permissions can be set up to ensure there are no breaches from inside or outside the company.
Furthermore, ERP software companies generally offer ongoing support to rectify any problem that does occur. Likewise, ERP systems often have online forums and communities set up around them. These are another invaluable source of advice and support.
Time to Wrap Up
There you have it: 5 key potential benefits of ERP for your business.
It's true the ERP systems can be exorbitantly expensive. However, the costs of opting against the expense, and forgoing the advantages they provide, may have an even costlier overall impact.
As we've seen, the ability to unify and integrate all essential business activity has a wide range of advantages. Through accurate product tracking, the facilitation of communication between departments, and cost minimization, ERP often pays for itself over time.
Hopefully, this piece has highlighted the key business incentives for making this investment. Many companies simply couldn't operate without it.
Like this article? Want more business-related advice? Be sure to head on over to the 'small business' section of the blog.