What is an ERP System and How Can it Benefit Your Business?
Enterprise Resource Planning (ERP) systems are suites of customizable applications that integrate business data and improve process management. ERPs help executives manage key operations across departments such as accounting, procurement, CRM, HR, supply chain operations, risk management and compliance, and more.
Running a company without a central ERP system is like navigating a ship through stormy waters without a compass. It's not a mandatory tool, but your chances of making progress rise exponentially if you have one.
How does ERP work?
Typically, enterprises are organized as decentralized systems. Each individual business unit carries the load for its own local data maintenance. When other units require that same data for their specific needs, accessing it becomes cumbersome. The inefficiency of the process reflects in inconsistencies, delays, and duplication of data.
An ERP system's key value is a shared, centralized database that serves as a hub for the entire business. The purpose of ERP software is to provide you with a comprehensive view of the ins and outs of your business. After installing an ERP system, each business unit remains accountable for local data maintenance, but with one fundamental difference: a single record system is open to all. Employees can pull data and reports from one central source, helping them make more informed and timely decisions. Most companies report an improvement in processes following ERP deployment. The optimization of internal processes results in multiple benefits—from a decrease in data maintenance costs to improved customer service.
Two Types of ERP: On-Premise vs. Cloud
The two popular types of ERP systems to choose from are on-premise and cloud applications. On-premise software requires you to purchase a suite and install it on servers and computers in your company. As such, it gives you more control of the deployment process. However, this type of platform costs more upfront and requires more maintenance for the organization.
Cloud ERP hosts all data off-site and is considered to be more stable and secure. Compared to on-sire platforms, the maintenance expenses are generally lower, but since most cloud solutions are subscription-based, the cost can add up over time. Still, cloud-based ERP platforms have been more popular in the market. In 2018, they boasted an 85% adoption rate compared to on-premise programs.
In addition to cost, there are other factors to consider when deciding between a cloud-based or an on-premise solution. Understanding the indirect expenses (hosting, updates, maintenance, security, etc.) long-term impact will help you make the right choice. It comes down to answering your company's pain points, keeping it within your planned budget, and determining whether your team has the capacity to deploy and support the platform.
Primary business benefits of an ERP system
Deployment of an ERP application can be valuable for all business types and models, regardless of size or industry. Here are some of the universal advantages:
Unified data with a single source
The main selling point of ERP is data integration. Having a single data hub eliminates the need for disconnected systems within your organization. Individual employees no longer have to use standalone applications or maintain separate documentation to manage their operations.
With ERP, all of your data is compiled, stored, and shared through a single system, minimizing concerns about how accurate, up-to-date, or complete the data files are. Information is entered once and immediately available. This also prevents duplicate entries and cross-referencing.
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Now Is The TimeStreamlined processes and operations
ERP helps employees secure a systematic and uniform flow of business data and navigate complex processes. ERP can also completely automate the most repetitive processes, such as routine billing, reporting, replying to customer emails, approval management, etc. This helps save time, reduce human error, and allow your staff members to focus on more important work instead of menial tasks.
Top-of-the-line data security
Data security is one of the most significant benefits and priorities of an ERP system. It maintains a high level of data security by substituting interdepartmental merging of data with a single input system.
On-premise solutions have an excellent track record regarding data safety, but cloud-based ERP systems have an additional layer of security. They employ round-the-clock specialists to make sure your data is protected, which makes their servers a more difficult target for cyber attacks. Both on-premise and cloud systems have backup storage for critical and sensitive information.
Superior planning and reporting
With the help of ERP software, managers can acquire more in-depth analytical insight into your organization's operations. By observing processes through a single system, you can quickly identify bottlenecks and establish more efficient procedures. You can also recognize operational strengths more clearly and gain a clearer picture of how the organization is doing and in which direction it's headed.
Improved customer satisfaction
Your clients will feel an indirect impact of ERP deployment. Once you enhance your operation speed and accuracy, customer satisfaction will automatically improve.
Having all your client information in one central location and streamlining processes, your team can focus on improving customer relationships and retention. With relevant data readily available at all times, support teams can cut down on response time without compromising the quality of service.
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Now Is The TimeImproved collaboration amongst teams
Managing a company in which each department functions separately from the other is a highly inefficient way of doing business. ERP systems eliminate the lack of collaboration.
With an ERP, departments can seamlessly communicate, cooperate, and share information instead of shifting responsibility and needlessly duplicating the administrative workload. This helps employees see the company's big picture and promotes a strong culture of collaboration within the organization.
No more guesswork
The new world of business requires you and your company to work quicker and smarter than ever before. ERP applications help you do just that. No matter the industry, an ERP system will allow you to take out the guesswork and make better business decisions based on metrics. This makes ERP applications an indispensable tool in the modern business landscape.
By unifying your knowledge and treating it as an asset rather than just another tool, ERP enables you to amplify your results. Deploying an ERP can be a turning point for your company. Investing in one should be a serious consideration for any forward-thinking organization.
Questions?
ROA Solutions Group can help. We have a team of experts that can quickly identify problems and find solutions for our clients in Cleveland, Akron, and Cuyahoga County. Call or email us to set up an appointment today!
