Many companies, as a result of the desire to stay on top of their game, are looking to technological ways of achieving effective solutions that cut costs but retain a smooth running and efficient organization. In that event, Enterprise Resource Planning (ERP) has gained popularity because of its ability to streamline business processes. A lot of research has been done focusing on the benefits of using ERP and the most recent shows that companies that have implemented ERP are generating revenue at an exponential rate. This is because of the following benefits of ERP software;
- Reduced operating costs- For any organization, reducing costs is an important pursuit.ERP has gained popularity as a result of its great ability to reduce costs without affecting product quality or the image of the company and at the same time keeping a level of profitability that allows continuous development of the business. ERP cuts down costs such as inventory, production and marketing by introducing integrated solutions which bring people together while information flows within a company. Information is entered once and becomes available to all the applications across different functions facilitating coordination and communication.
- Improved customer service- Customer service is not limited to how you treat your customer in direct interactions; customer service also means delivering quality products at a reasonable price and delivering it as promised. Customer Relationship Management (CRM) software is designed to cater for all these needs. It enables the enterprise to track, manage and streamline interactions between company and customer, allowing for strategic relationship progression. It improves customer service by making customer-facing business process more efficient and effective. This in turn fuels sales without increasing labor costs.
Scalability- According to Investopedia; Scalability in thefinancial markets, is the ability that exchanges, banks and financial institutions have to handle increased demands, such as higher trading volumes. In the corporate sense, a scalable company is one that can maintain or improve profit margins while sales volume increases.
When it comes to scaling for growth, ERP software standardizes business processes across the organization hence eliminating activities that add no value, optimizes overall efficiency and provides a repeatable operational and system templates that accommodate the need of a company.
- Efficiency-ERP enables visibility across intercompany transactions by automating information process. It bridges information gaps across a company and focuses on key issues such as productivity enhancement, customer service e.t.c. The result is improved employee interaction and broken silos. With more detailed and up-to date information coming in real time, managers are able to make critical business decisions.
- Integrated information- Project workflow is the key to maximizing the return on services delivered; ERP unifies and standardizes business processes. ERP solutions improve efficiency by automating business processes, furnishing integrated applications that share data to give employees instant access to the information they need, and by providing business intelligence and analytics to improve decisions and planning. When information is centralized, it is easier collecting, accessing and managing data that can be used to better inform business decisions and operational proficiency.
To reap out of an ERP, the most critical thing to consider is finding ERP software that best fits your business. Most software solution providers offer customizable software where one can choose the parts of the operations they want included, add more as they develop and expand further. One of the main reasons why companies using ERP are successful is the availability of clear and relevant information which gives managers a better chance to change and/improve business performance.