Enterprise Resource Planning (ERP)
Managing a retail store can be challenging enough, but what about an entire enterprise? Everything is scaled up to massive proportions, from the amount of financial transactions to the myriad of logistics and staff movements that make the enterprise’s daily operations. Handling everything manually or with pen and paper is all but an impossible and herculean task, something that not even the most robust of Point of Sale (POS) systems can accommodate. For this, the business owner needs something bigger to help them manage their company—a solution that can truly manage and tackle everything that makes a huge enterprise-sized business tick.
This is where Enterprise Resource Planning, or ERP, comes into play.
What is ERP?
ERP is a generic term for a suite of software programs that provide a business with a system of integrated applications that can help smoothly manage and automate the routine functions and operations of that business. Some examples of those functions and operations include the following:
- Product Planning
- Manufacturing or Service Delivery
- Marketing
- Sales
- Inventory Management
- Shipping and Payments
By having ERP software used in managing these functions, they will be carried out with a higher degree of accuracy, efficiency, and reliability than if they were done manually. As such, errors and mistakes in these functions are greatly minimized. This easily results in increase profitability and long-term viability of the business itself.
How does ERP do this?
As ERP is typically a suite of software programs rather than just one single software solution, how it works in making a process or function more accurate can vary. However, one general over-encompassing concept is that ERP facilitates the automated and efficient transfer of information from one entity within a specific business function to another. This greatly improves how that function is performed.
Let’s take the function of Inventory Management, for example. During a busy work day, the sales team is asked by a big client about the availability of a certain high-profile item’s availability. As the sales team has no quick access to their warehouse inventory, they route the query to the inventory team. Soon enough, it’s discovered that the business does in fact have no remaining stock of the client’s desired item. Studying further it looks as though someone in the inventory team made a mistake in inventory checking. Coming back empty-handed, the inventory team notifies the sales team, then the latter notifies the client.
The above scenario is inefficient, slow, and has a great chance in dissuading clients from ever taking up business with you. After all, who wants to be made to wait for an interminably long time, only to be told that you, the customer, has basically been waiting around for nothing? No one.
With robust ERP software however, the scenario would have gone very differently. Not only would it have allowed the sales team to quickly access the inventory team’s most updated reports—confirming the stock of the client’s desired product—it would also have been quick to remind the inventory staff that a certain popular product is in danger of running out.
This and a myriad of other important, business-growing benefits are available to you when you choose to invest in and install our main ERP offering, namely SAP Business One, into your existing enterprise infrastructure.
The Benefits of ERP systems
There are a number of benefits to be had by correctly implementing an ERP system in your organization. Some of these include:
Implementing an ERP system can bring immediate benefits by streamlining your business processes and reducing confusion that may occur when different parts of the organization interact with each other. This can save a lot of time that employees would otherwise spend familiarizing themselves with systems that they may only infrequently use.
A good ERP system will allow you to link related business processes and allow you to immediately view relevant data as it comes in. For instance, if a customer makes a purchase, your ERP system may automatically update your inventory, financials, as well as your materials requirements forecasts all without the need for further human intervention. This means someone working in one area of business will no longer need to constantly access the data held by different departments in order to perform their job – the ERP system will automatically provide them with the data they need as it comes in.
A properly-implemented ERP system will usually result in less paperwork and less time spent on parts of the business that take up a lot of time do not provide direct value. There will be less of a need for constant back-and-forth interactions between departments to get the data one needs, allowing teams to focus on creating value for the organization.
A properly-implemented ERP system will reduce the need for teams in different departments (for instance, sales and marketing) to duplicate efforts especially with regards to data gathering. As it may not always be clear what data other departments have available, time may be wasted by duplicating the efforts other teams may have already made. Since an ERP system makes data immediately available through the entirety of an enterprise, there are much fewer instances where such duplication can happen.
One of the biggest benefits of implementing an ERP system is to allow data to be centralized and immediately available to whoever needs it. These systems can be typically set up to integrate financials, sales, inventory, materials forecasts, and other key aspects of a business so that relevant information that appears in one area is immediately available in another. If the organization is only using one ERP suite for all its functions, this will also allow all data to be immediately accessible to anyone granted permission to work with the system.
Without an ERP system, it may take weeks, or even months to do a full audit of an organization’s overall status at a given moment of time. By the time a report is finished, the compiled data may no longer be accurate and may be of limited use to managers. Using an ERP system will allow a much faster reporting cycle, allowing you to get an accurate picture of the status of the business almost immediately.
Drawbacks of ERP systems
Purchasing and implementing an ERP system can be expensive and can take a significant amount of time fine-tuning to an organization’s needs. In some cases, it may take a very specialized team months to implement an ERP system for some types of businesses. There are also maintenance costs involved in the maintenance of such systems.
However, the benefits typically far outweigh the disadvantages, especially for businesses that see or expect significant growth.
How to Tell If You Need an ERP system
As your business grows, administrative workloads tend to increase with it. When this happens, you’ll often find that a large part of your work is no longer directly related to generating value for your business and its stakeholders. This can lead to a reduction of service levels and competitive advantages for your business over time as the administrative work starts to take more precedence over actual productive work.
When this happens, it may well be time for your organization to invest in an ERP system. Here are a few signs you’ll want to either implement an ERP system or switch out an existing one.
Keeping track of all the transactions a business does can be a huge challenge. Ensuring that they are all accurately recorded in a timely manner is paramount as it’s through incoming and outgoing transactions that you get an idea of what exactly is going on in the business.
If there is a bottleneck in your financials, such as sometimes happens when accounts and sales teams interact with each other for sales figures, keeping your finances in order in a timely challenge can become even more difficult. Using accounting software that isn’t integrated with your current ERP system, if one exists, is another major productivity chokepoint as far as your financials are concerned.
Having a fully-integrated ERP suite will allow managers to instantly access and collate relevant information to quickly assess an organization’s financial situation as well as create reports. It will also make it far simpler for a business to file their taxes correctly.
Using different software suites to manage different parts of your enterprise may hinder growth by keeping you bogged down in attempts to use data gathered by one set of tool for others. Even in cases where having a set of different systems works well, there tends to be a lack of immediacy and transparency, as data is locked up in one system with those working with other systems in other departments being unable to immediately access that information.
For a business to be efficient, it’s essential that all important data can be made available to those who need it, as soon as their needs arise. By using an integrated ERP suite, you ensure data is immediately made available to those who need it, as soon as it entered in the system.
Using multiple systems can be very challenging for IT departments. IT personnel not only need to spend time mastering all the different systems, but you will also have to deal with annual licensing fees. Having more systems in place also tends to mean that you need a larger IT team, which can significantly increase the cost of keeping multiple systems in place.
By using an integrated ERP system, you can do much more with a smaller IT team. Team members will only need to specialize in one system and with a smaller team is a reduced need for new hardware acquisitions as well.
Keeping track of stocks and assets is fairly simple and straightforward in the early days of an organization. You and your team will probably not need much more than a basic tracking system.
However, as the demand for your products and services grows, you may find that customer demand may occasionally exceed stock availability, because you may have failed to forecast the demand correctly. This can lead to customer dissatisfaction as well as a negative reputation.
In cases where sales teams do not have access to information from the stockroom or warehouse, this can make it difficult to manage customer expectations as well. The team that handles the purchases may not always order the needed stock as well if they do not likewise have the needed data from the sales team.
If any of these scenarios are becoming a problem for your business, then implementing an ERP system should definitely be a top priority.
Information has to be timely and accurate in order for it to be useful. In cases where different teams and departments are using their own software systems, the data that is in one place may not be immediately available or even visible to others in the enterprise. What’s more, other teams may not even be aware the data exists and they may end up duplicating data-gathering efforts themselves, wasting valuable time and resources.
If you find that you and your employees have to jump through several hoops just to generate a simple report, having an ERP system may be worth considering.
With teams less office-bound than they have ever been before, it’s important that your employees are able to access all the information they need regardless of where they are physically located. This is especially true with the case of sales teams who may need to access and update data on the move. Senior management may also need to have immediate access to information when traveling in order to make key decisions.
Going with an ERP system that provides good mobile functionality is now especially important in today’s world, given current trends in workplace mobility
Let ANSI Information Systems, Inc. Revolutionize Your Enterprise with SAP Business One
Only an ERP solution, such as SAP Business One, can fill the role of the robust ERP software in the above scenario. This is because this it carries with it the programming expertise and legacy of SAP, the same ERP being used by the gigantic, multinational companies and conglomerates of today. With SAP Business One, you essentially level the playing field and set your enterprise on the fast-track to profitable and sustainable growth.
Don’t delay. Contact us now here at ANSI Information Systems, Inc. and we’ll work with you on how to best include this powerful tool into your business arsenal.