Enterprise Resource Planning, better known as ERP, is a software package that seamlessly integrates with the functions and operations of the company to provide advanced and timely information about shared data stores. An ERP package is a great asset for the companies as it offers numerous benefits, some of which are:
o It streamlines workflows.
o Helps provide better customer service.
o Provides real-time statistics on raw material availability, sales patterns and cash flow.
o Ensures rapid processing of information, reducing paperwork.
o It is very well suited for global operations as it contains both local and international attributes required for a global company.
In short, an ERP system can help increase productivity levels and thereby increase profits, both tangible and intangible.
Like anything else, ERP has some downsides. The ERP implementation is time-consuming and expensive and can significantly affect the working environment of the company. However, the advantages of ERP software always outweigh the disadvantages and it has become something of a necessity for the manufacturing industry, transportation sector, and distribution and retail.
To implement ERP solutions, companies should thoroughly research options and weigh them for features and capabilities. The most important of these are:
1. financial management – Due to the fact that companies are constantly under the scrutiny of financial regulators, sound financial management is an essential part of an ERP solution. A financial management module offers several advantages. It ensures companies comply with accounting and tax requirements. Additionally, managers can improve financial performance by tracking expenses in real-time, improving cash flows and maintaining more accurate and timely financial reporting.
2. Human resource management (HRM) – Previous Human Resource (HR) ERP modules were limited to employee management, payroll and a few other legally required reports. But now the solution has evolved and gone beyond the limits. The latest solutions are capable of handling a variety of tasks such as talent management, scheduling, recruiting, performance reviews, time tracking and much more. In addition, the tool also offers tailored insights into common HR processes.
3. Supply Chain Management (SCM) – In today’s highly competitive market, it is imperative for a company to properly assess demand, supply, manufacturing status, logistics and distribution. Otherwise, it may have a negative impact on the company’s operations and affect the relationship with the suppliers or distributors. It can also result in the company’s reputation being damaged in the marketplace. An ERP supply chain module takes care of all phases from design to requirement fulfillment.
4. Customer Relationship Management (CRM) – Customers are the most valuable assets of any business and no one can afford to lose them. When you have a large customer base, it becomes quite difficult to meet their needs in a timely manner. A customer relationship management (CRM) module ensures proper information flow between the sales team to address needs and the marketing team to understand buying preferences and patterns.
5. Third Party Interoperability – No two companies are the same, and even if they are, chances are they have some uniqueness in their operations or requirements. It requires additional precautions to meet these unique requirements if they are not accommodated in your existing ERP system. Therefore, it is important that the ERP solution is scalable and interoperable without integration problems.
Installing an ERP solution can be a daunting task, and further customization to meet business needs complicates the process. Therefore, it is imperative to choose an ERP package with the appropriate features and capabilities so that it offers more benefits than investments.