What are the benefits of implementing an ERP?
To understand why setting up an ERP within your company, you must first know its main components. This software allows you to make many improvements both on the business plan of your company and on the quality of the collaboration of the teams between them. We will, therefore, recall what a management software package (PGI) is and then explain the advantages it can bring to your company.
Reminder of What an ERP is
An ERP system is an integrated modular software with a single shared database. If you plan to organize your business management better, this article will help you because we will explain the ERP solution.
What is an ERP?
ERP, or enterprise resource planning (ERP), is a modular software system that integrates the major functional areas of an organization’s business processes into a unified system. It comprises various modules divided into several areas of activity, such as finance and accounting, human resources, production and materials management, customer relationship management (CRM*), and Supply Chain. According to the specific activity of the company, the organizations choose among these modules which are the most adapted and essential to integrate within the software package.
*The difference between an ERP and a CRM
The ERP is more complete than the CRM: the latter is centered on the customer relationship, whereas the ERP serves more for the global organization of the services. CRM stands for Customer Relationship Management, which is data-centered on customer loyalty. For example, Microsoft Dynamics is a CRM widely used by companies, and it has many advantages, such as good flexibility and clarification of modules.
Why use an ERP?
Companies looking to manage their business functions within a centralized and integrated system have every interest in using an ERP. Often, ERP is used by companies working within the supply chain to help them keep track of all the moving parts of manufacturing and distribution. In addition, ERP is used by all types of industries: health, construction, hospitality, associations… It is easy to find reasons to use an ERP for VSEs or SMEs.
The Challenge of an ERP for a Company
The optimization of the resources and the company’s global organization passes through the installation of an ERP. Indeed, whether for the production chain, communication between employees, the organization of the functions of each resource, sales, customer data, accounting, etc… These functions are separated into main modules on the software. Training in this system, in this software, is necessary for the resources that will be needed to use this software. It is a tool on which information will circulate and be displayed, which is why misuse could lead to poor decisions.
Indeed, ERP is a tool that presents itself as one of the most effective solutions for managing your business in digital transformation. Rather than having a multitude of software that each represents a solution, ERP is a single solution.
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Benefits to Improve your Business
Improved communication, better quality of work for all employees, easier accounting… ERP offers various advantages and solutions.
Realize Savings
We must see here the opportunity to obtain a real return on investment. Indeed, having an ERP today does not necessarily require a significant investment. The benefits of an ERP are multiple. The main thing is to benefit from a centralized system: all the tools necessary for his work are in the same space. This unification of tools helps your staff work more efficiently. Also, costs are reduced since the team does not need to be trained on different software.
Improved Collaboration
The centralized database in the integrated management software (ERP) is the single source from which to work. This reduces errors due to the use of erroneous data. There is less hesitation or blockage during projects since team members can access a single database. Collaboration and exchanges between departments are, therefore, more fluid and precise.
Further Analysis
ERP is like an accurate Business Intelligence tool. Indeed, all the data entered by users is stored and presented in this integrated management software package. Thus, it is easier to generate reports and diagnostics thanks to this presented data set. The right decisions can be made more easily following more precise analyses.
Improved Productivity
Tasks to be repeated daily can be tedious and take up your time when your qualification could be used for other tasks. An ERP system can automate redundant tasks, enter data, and perform advanced calculations in minutes. Therefore, productivity is at stake here: this efficiency and optimization of time is necessary for a company to be as profitable as possible.
Exemplary Inventory Tracking
One of the significant challenges for companies is monitoring their inventory levels. Indeed, ERP systems use barcode serial numbers to control your stocks at each stage of the supply chain. The ERP allows an increased vision of the warehouse regarding order preparation, packaging, and shipping processes. Indeed, inventory management is a condition for a good organization of services. This information is essential for the company and its production chain.
The Production
Implementing an ERP is strongly recommended for each company needing to concentrate the data on the same system. It is a way to make employees involved and to improve their productivity. This is because the information is centralized and no longer resides on many separate systems. The solution for the production activity to be as efficient as possible is to make information concerning them accessible to all departments in a simplified way. Thus, with optimized production and improved management processes, sales will increase.
Thus, the benefits are many, allowing business activity to flourish. However, future solution users will need training to use the tool properly. All the information about the systems is a lot, so using the tool requires training.
To go further on the ERP
Microsoft Dynamics: A solution for creating an ERP
Microsoft Dynamics is a complete and robust solution that combines all your business data and applications. It is an ultra-modern solution; CRM and ERP applications are hosted in the cloud and accessible on the same platform. Today, the cloud is the most secure way to access elements, making this solution a beautiful and competitive software.
What is Enterprise Resource Planning?
ERP offers a high-performance and functional data connectivity solution for the business. The fact that the systems communicate with each other makes it possible to plan, manage, distribute, and anticipate concrete solutions for companies. This is why SMEs have every interest in implementing this management solution. Also, VSEs can plan to set up such management systems, but the software must be adapted to the company and not disproportionate. Indeed, each process must be at least tailor-made.
4 Different Types of ERP Software
There are different types of ERP software. Generalist ERP: a unique software that offers the basic functionalities and meets a company’s needs. It can be implemented in most business sectors but is not customizable. In addition, the specialized ERP offers functionalities adapted to each trade and especially each sector of activity. In addition, there are open-source ERPs; as the name suggests, they are free and do not require the purchase of a license. Their price is lower, but the associated services are minimal.
They, therefore, require good computer knowledge. Finally, ERPs in SaaS mode are marketed as a service, not as software.
Each solution has its advantages, but each type of software has its specific characteristics, which depend on what companies seek.
A real Solution to Manage Processes
Installing software allows improving its management processes with a particular information organization. Businesses can see strategic advantages emerge from this information organization solution. ERP is software that can bring you a good return on investment, provided the solution is worked and adapted for your company.
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