5 Valuable Business Benefits of Enterprise Resource Planning
Enterprise Resource Planning (ERP) addresses the need for a comprehensive software solution that integrates and automates all the aspects of core business functions into one seamless and efficient platform. An ERP constitutes a set of advanced tools and applications that are used to collate, integrate and process the information from all business functions of an organization.
Some of the common business processes that are usually integrated into an ERP implementation include Planning, Manufacturing, Inventory, Human Resource and Accounts. The implementation makes it possible to unify all the data from these disengaged departments into a single database. This gives a simplified overview of the entire business process and its functioning. The objective of the endeavor is to enable all the process to run at optimal efficiency and get them synchronized, which can maximize the overall performance. When implemented accurately, there are multiple benefits that can be delivered by an ERP solution, which are discussed below.
Traditionally, organizations had their data spread across several disengaged and compartmentalized systems specific to each department. This is because each department could be using a unique software solution to manage its operations. These independent platforms could be from different providers and each could be using a unique technology to store and process the information. In such situations, it could get very difficult to integrate the systems into a single cohesive unit, resulting in disparate information segments. As a result, crucial decision-making info from the data of multiple departments was inconceivable. Also, with each department maintaining its own set of information, data stagnation issues such as redundancy and inaccuracy would creep in. With no transparency, it could lead to total breakdown of the entire operational structure. This can be well prevented by migration of divergent information across all the departments onto one single platform. An ERP implementation is a solution to achieve one such cohesive platform that can allow seamless portability of data from one department to another. When data is kept consistent and up-to-date, it aids quicker and effective operations and decisions, that boosts the performance of the organization comprehensively.
For the organizations using various legacy systems that include incongruent data structures, it can get very difficult for mid-management to collate the appropriate reports. With reports that do not portray the right insights about the actual performance of the business, the most critical decision can be impaired. ERP solution does not just help in collating data easily but also simplify the process of creating the reports through various advanced tools. These tools can also be used to customize the process of reporting, which can maximize the capabilities to respond to intricate data requests much more easily.
Better Customer Service
An organization with its operations automated on an ERP has access to faster and much more accurate data about all its customers. When customer service personnel have insightful information available as part of customer’s transaction history with the company, it makes it much easier for them to deliver effective service. Moreover, when the info on customer preferences and engagement are collated and documented diligently using the ERP, it can also help the sales and customer service personnel to enhance their interaction with the customers and build better relationships with them.
An ERP solution also provides multi-level restrictions to the entire data of the organization. This enhances the overall security as data can only be accessed by relevant users and not all the employees. The masking of data as per the role and designation of the employees in the organization induces much better security and control.
An ERP system reduces the need to enter the data manually into the system. The integration of all the departments allows the process of data collection from financial transactions, inventory records, customer orders, etc., to be fully automated and seamless. This does not just keep the database up-to-date but also eliminates data redundancy and repetitiveness. Business processes are much more streamlined and there is much better transparency in the information and operations among various departments. This enables the organization to operate at maximum efficiency.
While the primary advantages of an ERP are transparency and efficiency through total integration, there are many more benefits that can be achieved by aligning the business processes. Minimizing the discrepancy in the data can save the company from making judgmental errors, which can in turn help to save money. Additionally, the automation brought in by the ERP helps in saving crucial time when it comes to serving the customers and helps the company in delivering enhanced customer experience.
- An ERP constitutes a set of advanced tools and applications that are used to collate, integrate and process the information from all business functions of an organization.
- The advanced solutions don’t just help in collating data easily but also simplifies the process of creating the reports.
- An organization with its operations automated on an ERP has access to faster and accurate customer data, which leads to better customer service.
- While the primary advantages of an ERP are transparency and efficiency, there are many more benefits that can be achieved by streamlining the business processes.