benefits of erp system

ERP Benefits: Adopt Today, Acquire Tomorrow

EasyERP Team 06/05/2016

Suppose you run the enterprise, which counts almost 300 employees. Yes, not 30, but 300. Think of it deeply. What would you do to make your company work better and to obtain achievable benefits? The answers are clear. Today, many companies are searching for various solutions to make this dream come true and one of these weird solutions must relate to the ERP benefits.

This idea, is increasingly related to those, who have big-picture benefits as increased productivity, maximized efficiency and greater data management. At first sight, the implementation of the ERP system may seem to be expensive. Yes, it is true, but the benefits obtained are worth implementing it.

He who fails to plan is planning to fail – Winston Churchill (1874-1965)Click To Tweet

What resources would you think? Why do we need them to be planned and managed, if it all works?  The statement “all works” is a bit doubtful, especially when there are more than 200 employees working for you. Do you agree? Let us deepen into this statement to understand it better. If the resources are not on the large scale, correspondingly, there is nothing to plan and everything can be kept in your head, but when they are huge, it becomes indispensable:

a) to think about planning
b) to think, how these resources have to be cut, without losses for business, of course.

In such a case, ERP reveals all its essence. Recently, due to the rapid development of the IT, many new ways of using computer resources and various software for automating business process management of the company have emerged. Therefore, the development and the implementation of the information systems, analysis and control that facilitates the improvement of the data processing enables enterprise to work effectively.

2000 largest companies in the world use approximately 49 different types of software and spend about 24 billion dollars, to ensure the relationship among different systems. Now, the world’s market counts near 500 systems, similar to the standards of the ERP. The pleasure to put the ERP benefits into practice requires higher costs for implementation, but those benefits will be definitely tangible. The use of such system allows you to use one integrated program instead of several isolated.

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What quantifiable and sublime benefits can be obtained from the introduction of the ERP system?

ERP Benefits to Business

The use of ERP system greatly enhances the quality of the management organization. It will make it easy to control the flow of work between departments, to reduce costs associated, with duplication of information and tasks, and costs, which arise from the operation of disparate management systems. The introduction of the enhanced tools, usually leads to the increase of the product and the growth of the revenue. Now, let’s review some of the core ERP benefits.

Additional income

  • ERP system can lead to the increase in the availability of the product and services, as a result less orders have been lost due to the inaccessibility;
  • Thanks to this tool, team sales, are given much more time available, to get in touch with the customers or products and prompted orders;
  • Customer Relationship Management, which is an inseparable part of the ERP system, helps the sales team to focus their sales activities on the areas with the most potential;
  • ERP system helps the company to determine and draw attention on profitable lines.

Process control

ERP systems make it possible to exercise the control over company’s important processes. It is based upon the hierarchical system, from the operational level to the level of strategic management.

Discount/Integration

Many of today’s ERP systems allow suppliers/customers to perform the functions of the organization (the formation and order tracking, inventory control and their replenishment). Companies acquire the possibilities to track and pretend on supplier’s rebates for the wholesale. As one of the greater ERP benefits, it reduces lead-time by improving interaction and information exchange with suppliers. It refines the relationships with customers by providing much information about their demands.

Valuable “asset”

The system enables us to locate the clearest way to the most valuable asset – the customer. The communication between sales team and the potential client satisfies customer’s needs, by improving the delivery time and accountability. You will be provided with all exact information about your potential client.

While the product is being delivered, the system is allotted with the possibility to record, how long the client has been owning it and, what necessary part the customer may need later. Respectively, you have the direct line with the customer and you will always catch the possibility to sell a new machine and be searching for your business again.

The synchronization of the processes

All the processes of the company can be organized in a consistent and interconnected workflow, being transmitted from one department to another. Due to the application of ERP workflow, systems are synchronized. Such synchronization will ensure the effective implementation of the processes, which are closed in some departments, but affect the overall processes for multiple departments.

The extension of administrative functions

The majority of ERP systems allow to apply the modules of corporate knowledge management.  This enables organizations to significantly expand the administrative functions through the creation of corporate knowledge base.

Perfect adaptation to business needs

The ERP systems have different modules that can be operated either being linked to the basic functions or being separated from them. The composition of the tasks in each module is customized for the needs of company.

Full integration

ERP system unifies all your processes and their necessary software into one program. It brings you tighter integration of every other aspect of your business. The most important aspects of your business like assembly and delivery are regulated with your processes in one place. When you need, for instance, financial reports from your stakeholders, ERP can automatically generate them by gathering and collecting information from all departments and offices without holding the communication with your employees or waiting for the email.

Possessing this ability, you are able to manage all your business aspects in all your locations safely and confidently. If your have several offices on the international level, the Enterprise Resource Planning software gives you the possibility to integrate them easily.

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What do financiers say?

The financial managers affirm that information in the ERP is very important and in general, it has a great effect on business performance. Financiers agree that this lucrative tool assists in saving a lot of time, doing tasks, necessary to complete the business processes. Many have agreed that reduction of the time, needed to deliver products to the customer, is probably the most valuable of all ERP benefits.

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The consequences of ERP implementation

One of the most prominent companies that has obtained the eminent results of the implementing the ERP system is Nestle. Still, having met some bumps in the road, the implementation of the ERP has paid for itself. The sum it has realized – is equal to 325 million dollars, which came in the area of supply chain enhancement, specifically demand forecasting. In addition to revenue, Nestle became able to come together as one huge company. The problem of 29 different brands has merged into one separate with all its common databases.

Warming up, it becomes obvious that, Enterprise Resource Planning is one of the best ways to increase the real competitiveness and profitability, attract investments and as a result, the maximum rate of business growth. It is a single information environment, powerful and lucrative tool of the collection and analysis of the financial information. ERP adoption unites incommensurate data, re-engineers processes and involves large numbers of users and locations.

Chatra