What is ERP?
What is ERP?
Let’s get to know ERP with a simple definition – a business management software that helps organizations to record, manage and interpret data. A tool that makes uniformity of data easy across multiple departments.
An abbreviation of Enterprise Resource Planning, ERP software provides an integrated view of any organization’s core business processes. The ERP tool captures information about various business resources such as financial information, inventory, production, and provides real-time data for improving productivity. A holistic view through ERP keeps business owners updated about the status of work orders, payments, material replenishments etc. The data captured in ERP is shared with multiple departments thus improving uniformity in data. Your vendors, sales and production teams have the same information through ERP leading to a precise and accurate production.
Now let’s take an example – A sales member of your organization creates a customer order into your ERP system. The production team sees the same information and plans for the production through ERP. Through a pre-defined process set in the system, the task is divided between multiple departments and when one department finishes their portion of the task, the next one is automatically notified to proceed with their task via the ERP software. The business owner can anytime check the status of the order via personalized dashboards or check related costs. Payments from previously generated invoices, list of vendors and customers and comprehensive stock management – all can be taken care of by a single tool, ERP.
Read: Benefits Of Cloud ERP
Choosing the right ERP for your business
There are multiple ERP software in the market that can cater to your organization’s need in their unique ways. Here are few pointers to keep in mind while opting for ERP software that will be best suited to your business in all aspects.
- Define what you need – Before you start with your search for the ‘right ERP’, be sure of what your requirement is. Make a note of your existing processes and challenges to be sure of the solution you are looking for. Based on your notes meet vendors and maintain a checklist of the solutions for the ease of taking the right decision when finalizing the ERP software.
- Be sure of the cost – Question and dig deep to know the details of the cost for the ERP you are choosing. Be sure that the sales representative you are in discussion with isn’t hiding any cost details under the chair that may pop-up later. Ask details of implementation costs, hardware upgrades, backfilling your project team resources, software maintenance, etc.
- What is the implementation plan? – Make sure your vendor shares a detailed plan for the entire implementation cycle of the ERP software you are interested in. The implementation plan should include all aspects of getting the system ready – from defining business processes and workflows to data migration, training sessions. Get this plan from the vendor before you make the final call so that you are aware of the actual timeline to be able to use the ERP system.
- Scalability- Will the ERP you are choosing, grow with your organization? One of the important factors to consider is to look for an ERP tool that can expand based on your need in future. Plan ahead and do not start planning for an upgrade just when you finish installing your new ERP software. That may be costly.
- System Performance and Accessibility- Another important thing to be ensure the active provisions for additional resources. One of the advantages of ERP is that one can access the same data in real time and from multiple devices.
- Organizational Change Management- Typical ERP projects enable massive change in organizations that influence the culture of your company. If careful control and communication plans lack then it will create an adverse reaction to ERP resulting in barriers to adoption.
- Business Management Report- A business owner cannot micro manage every process in his business. An ERP software should be able to generate reports that help a business owner in analyzing the operations of his business. The ERP thus helps in highlighting areas that need more focus.
The above listed points are a foundation in choosing an ERP that suits your needs. Make ERP work for you; avoid working for your ERP software.
What role does an ERP software play in improving an organization’s productivity?
Look at ERP as a glue that makes all departments stick to each other when it comes to uniformity in data. An ERP software takes care of the below –
- A holistic view of an organization’s productivity
- Real-time access to data
- A better management of financial information and compliance with regulatory standards
- Automation of core business operations
Apart from uniformity in data, and streamlined and automated processes, an ERP software also helps in lowering the overall cost of an organization. The points mentioned above clearly highlight that the benefits of the ERP tool are amazing and for organizations who want to grow by improvising on processes – ERP software is a must.