ERP Solutions Boost Business Results, Drive Operational Efficiency
Discover what enterprise resource planning (ERP) solutions are and how they can transform your business via a single source of data, transparency and efficiency.
Small- and mid-sized companies gain a tremendous competitive advantage when they invest in and leverage enterprise resource planning (ERP) software solutions.
What Is an ERP?
ERP solutions provide companies of all sizes a way to connect data and workflows in one centralized system. With an ERP platform, companies have a single source for data that is shared across operational areas.
By having one data source, companies gain opportunities to improve operational efficiency, reduce costs and errors, and make better decisions with accurate information in the moment of need.
Not only are data stored in a single database, but that data can be seen and used by users in one unified and integrated tool. An ERP decreases the need for the purchase, management, security and upgrading of legacy systems. It also means less duplicative data and manual reentry, which can lead to mistakes.
The three fundamental characteristics of an ERP solution are:
- A centralized database that can be accessed, added to and used by employees at all levels. This feature means fewer operational silos and more collaboration.
- Real-time operations that are updated continuously with up-to-date information.
- Comprehensive business systems that are singularly located, whether the ERP is cloud-based or on-premises.
What Are the Components of ERP?
ERP solutions vary by vendor but typically include some or all of these functional areas:
- Financial Management. This is the core section of most ERP solutions. It stores, monitors and reports on all components of your financial data, including accounts payable, accounts receivable, budgets, forecasting and costs.
- Supply Chain Management. Managing sources, pricing, logistics and distribution is essential for business success today. To optimize your supply chain, an ERP gives you tools to monitor all components, see problems and find solutions faster, as it happens.
- Customer Relationship Management. With a single source of information on customers across finance, sales, marketing and customer support. That information — contact details, responses to promotions, and questions — can be stored in one location, meaning better service and insights.
- Business Intelligence. Data-driven decision-making becomes the norm when you have real-time information available and presented in actionable formats for clearer and more strategic outcomes.
- Manufacturing and Distribution. Streamline your supply and demand functions, with scheduling tools for equipment, machinery and employees. Set and monitor targets and identify patterns necessary for improvement and optimization of resources.
- Inventory Management and Materials Planning. Accurate information about the quantities, locations and expiration dates of materials allows for optimal usage, less waste and smarter warehouse management. Tracking information in many ERP solutions allows you to list ingredients, properties, recipes, measurement conversions and other details that fit your company’s scheduling, purchasing and distribution needs.
Who Uses ERP Solutions?
Businesses of all types rely on ERP solutions. In many cases, vendors develop industry-specific solutions designed to meet the unique needs of a business sector, such as manufacturing, chemical production or food and beverages.
Customization is at the heart of an ERP with vendors offering different modules and add-ons that are designed to make your solution fit your needs. Entry fields, user controls and reports can be customized.
What Are the Benefits of ERP Software?
ERP delivers multiple benefits for your business, including:
- Better business quality. An ERP helps improve business processes, reduce inefficiencies and streamline the collection and storage of data.
- Operational cost reduction. By eliminating legacy software platforms, maintenance and upgrade costs, and data integration expenses, companies spend less on systems.
- Improved employee productivity. Automation is at the heart of an ERP solution and reduces the reliance on manual employee work. Automation helps route paperwork, manage workflows and monitor production and delivery of goods and services.
- Better customer service. Employees can collaborate better on everything from sales meetings to discounting to customer inquiries.
- Better insights. From profit and cost trends to customer behavior patterns, information is displayed in dashboards, charts and graphs that are based on real-time data and provide needed information to make smarter decisions.
How Are ERP Solutions Priced?
Cost can vary based on the modules, components and features your business needs, including whether you host the ERP on-premises or opt for a cloud solution. ERP systems are typically priced on a per-user basis.
How Do Small- and Medium-Sized Businesses Use ERP?
Businesses at every stage of development benefit from using an ERP. For startups in a high-growth mode, the scalability of an ERP solution is essential, allowing for the rapid introduction of more users and more data.
Small- and medium-sized businesses usually have more clients, employees and data, along with more and increasingly complex processes. Those situations are ideal for ERP solutions that provide transparency and integration across functional areas.
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