In dynamic and highly competitive modern markets, every available opportunity to improve efficiency is crucial. Enterprise resource planning (ERP) is a technological approach that allows business managers to enjoy several significant advantages that can boost productivity and enhance organizational growth.
Here are 10 examples of the benefits of using ERP:
1) Control over all areas of business operations
Via implementing an integrated system for planning, organizing, controlling, and leading business processes, an entrepreneur acquires control over all aspects of enterprise operations: from marketing strategies to financial reporting. The new flowchart establishes clear communication between different divisions and enables the company’s management to make more accurate tactical decisions regarding achieving strategic goals. This results in more efficient use of resources and increased profits. In addition, all information is saved in a single place, which makes communication between managers easier and documentation less time-consuming.
2) Improved collaboration within the company
ERP allows streamlining communication across different departments through improved access to essential business data. This provides an opportunity for better coordination between marketing, finance, purchasing, and supply chain management divisions. For example, accurate real-time inventory tracking makes forecasting demand needs much easier. Also, managers can share vital data about current projects via dashboards that are updated in real-time. Thanks to this feature, members of project teams can track their progress on key performance indicators (KPI), which proves highly valuable during the project planning process.
3) Improved collaboration with suppliers and customers
ERP allows companies to collaborate more effectively with their business partners. It enables users to streamline data exchange within one or multiple companies, regardless of operating in different industries, while preserving the value of sensitive information. Via integrating ERP systems into existing business processes, companies can share their resources more efficiently while increasing product traceability across the entire supply chain network. This facilitates cooperation between partners involved in joint projects or purchase orders, providing opportunities for better lead time management, determining accurate deliveries dates, and other critical aspects for supplier-customer relationships.
4) Enhanced flexibility
Since modern ERPs are web-based applications powered by cloud computing, it’s possible to access these systems virtually anywhere and anytime. That’s why companies can work with their ERP system more flexibly, without sacrificing the security of vital business data. This provides an opportunity to experiment with different ways of organizing workflow processes for different departments, enabling employees to quickly adapt to changes without investing much time and resources into transitioning from one system to another.
5) Increased time efficiency
With ERPs, it’s possible to automate routine tasks that take up a significant share of the company’s workforce each day. For instance, you can integrate finance modules with other applications responsible for payroll, inventory management, human resources, etc. This way, every manager in your team can benefit from automated planning reports daily while saving time previously employed on gathering the same information via manual reporting. By doing so, it’s possible to improve workforce efficiency by delegating responsibilities to automated systems while freeing up employees’ time for more creative activities.
6) Better knowledge sharing
Implementing an enterprise resource planning system enables better-organized knowledge sharing within the company. Thanks to the interconnectivity between different applications, managers don’t have to invest much time in gathering and parsing data from other software solutions. This increased transparency of the workflow streamlines the reporting process, allowing employees to spend more time generating valuable insights that can help managers make more accurate decisions during the planning phase.
7) Improved compliance with regulatory requirements
ERP helps companies comply with regional norms and regulations. For instance, some countries in Europe require local companies to use software that complies with the International Financial Reporting Standards (IFRS) when they file their reports.
ERP is an efficient way of meeting these requirements since it comes with built-in modules for financial reporting, which cover all processes relevant to regulatory compliance.
8) Upgraded security protocols
ERP systems employ advanced security systems to make sure that data stored in the ERP platform is protected against unauthorized access. Since many aspects of our lives are now digitized, cyber-attacks have become a great concern for businesses and individual users worldwide. According to PricewaterhouseCoopers’ research, cybercrime costs the global economy around $400 billion per year. However, modern ERP developers pay much attention to the security aspect of these systems, which greatly reduces the risks of infiltration by hackers.
9) Reduced expenses related to software licensing
ERP software is usually offered on a Software-as-a-Service (SaaS) model, which means that you can get enterprise resource planning cloud services without purchasing any licenses for your employees.
Instead, all users access the same system using their own gadgets and devices, while administrators can control who has access to certain information and when they can do it. This way, companies don’t have to deal with large investments in licensing fees every year or so while still getting the full functionality of the ERP system. Using SaaS payment models also reduces security risks related to lost or stolen devices since all sensitive company data is stored in the cloud. This way, employees can work remotely, enabling better workforce utilization and boosting business productivity.
10) Advanced data analysis capabilities
ERP helps companies invest less time gathering reports about their activities than other solutions that are not equipped with built-in analytics modules.
Companies can use these pre-designed algorithms for predictive analytics to understand customer behavior, predict future sales trends, optimize resource management, etc. Moreover, insights gained through statistical analysis empower managers to make more informed decisions throughout the strategic planning process.