Enterprise Resource Planning (ERP) software allows you to centralize all of the data used to run a business today in a single system, including the data generated in inventory and order management, accounting, human resources, as well as sales and customer relationship management (CRM). A well-designed ERP solution integrates all of the data generated by these various business functions, putting the information your employees need to get their jobs done at their fingertips, and streamlining operations across the entire organization.
The key feature of ERP systems is a shared database that supports the multiple functions required by different business units. This means that employees in different divisions of your company have access to the same information, but the information is presented in a format tailored for their specific needs.
For instance, with sales orders automatically flowing into the financial system without any manual re-keying, the order management department can process orders more quickly and accurately, and the finance department can close the books faster.
1. Automate Your Business Processes
With a thoughtfully designed ERP system in place, sales orders can automatically flow through all the required financial processes without any manual re-entry of data or even switching between databases. This kind of sales automation enables order management to process incoming orders more quickly and accurately than before. Your marketing processes can also be automated using real-time data from your ERP system, and last but not least, your accounting and finance teams can also bill the customer and finalize the order faster.
2. Generate Actionable Business Intelligence
ERP systems today can also enable you to generate useful business intelligence (BI) based on your own data as well as broader industry and sector data, integrating “front-office” functions and ecommerce into your DataStream.
Nearly all ERP systems are designed with a portal or dashboard so that employees can monitor key business performance metrics at a glance. The ability to track key performance metrics over time and the ability to visually display your data in a variety of views and formats in a dashboard can lead to important insights that had not been recognized earlier.
The evolution of “cloud computing” and Software-as-a-Service (SaaS) business models has been a major boon for ERP. Cloud-based solutions make ERP software more affordable, as well as easier to implement and manage. Cloud-based ERP systems also make data available in real-time, which notably improves the accuracy and value of a broad range of BI, thus providing company executives a useful “window” into ongoing business operations.
3. Enhance Agility with Faster and Better Decision-Making
To survive and prosper in today’s rapidly changing business environment, enterprises of all sizes must become increasingly agile.
ERP systems promote collaboration through shared data, and by providing structure with common data definitions. Shared data means no more time wasted arguing about data quality and makes it possible for employees to analyze data more effectively, draw conclusions, and consistently make better decisions.
Research shows that effective decision-making typically balances central control with a situationally appropriate amount of local autonomy. This is because central control operations are usually not responsive to local problems, and complete autonomy makes enterprise-wide coordination almost impossible. Utilizing shared data and common business processes leads to decisions focused on the benefit of the entire enterprise being made by the employees closest to and most familiar with the specific situation.
Increased agility offers businesses a slew of short- and long-term benefits. Simplification of processes and standardization across departments and business locations results in fewer rigid and unwieldy structures to be overcome in the process of innovation. Implementing a company-wide ERP system almost automatically creates a more agile enterprise that is built on the twin pillars of collaboration and adaptation.
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