Enterprise Resource Planning (ERP) is without a doubt a useful tool for businesses. It offers numerous advantages as it helps improve business operations especially when it comes to the collection, storage, management, interpretation, and presentation of business data. It creates an integrated view of the primary processes of a business operation. However, ERP can do more. With effective implementation, it can also become a useful tool in helping a business grow through better business intelligence.
The following are ways through which ERP can enable business growth or development.
Efficiency is a key advantage of using ERP tools. Because of ERP’s ability to integrate a multitude of information pertaining to various aspects of a business operation, it leads to a system that enables the better control, supervision, and management of business processes. ERP unifies and automates record keeping, storing, and presentation for various business activities including product planning, manufacturing, inventory control, marketing, sales, shipping, and payments. This leads to more efficient business supervision and management as the communication and collaboration between business units and sites are enhanced.
Efficiency makes it easy to pursue expansions or business growth as it becomes easier to plan, track, and control resources, expenditures, as well as the selection of efficient options and processes that will benefit the growth of a company. Efficiency leads to better operations that warrant expansions or new but related ventures.
Moreover, efficiency improvements in business processes or a marked improvement in the overall operations of a business can lead to better customer relations management. Great customer relations can be a significant contributor to business growth.
- Savings or advantageous cost-cutting
As a business becomes efficient, savings on operating costs can be expected. With ERP, the cost savings are mostly on the business data collection, organization, interpretation, and presentation aspects. Employing an effective ERP system means fewer personnel to handle tasks involving the compilation, organization, processing, and presentation of business data. There are many tedious and repetitive tasks that can be automated with ERP systems such as the testing procedures performed by software development companies and the upgrading of software used by a business. Moreover, duplicate databases or data storage systems can be avoided by adopting an effective ERP.
Operating cost savings directly attributable to the use of ERP may relatively be not that much to be useful in funding expansions. The benefits of these savings, however, are indirect. The savings indicate efficiency and the adoption of a system that encourages business owners to expand or replicate the system in a new branch. ERP can facilitate the implementation of tweaks or adjustments in business processes, plans, or schemes to be able to minimize costs while maximizing revenues.
- Faster decision making and enhanced strategic planning
One of the major advantages of deploying an ERP is enhanced visibility, which means that through it everything can be easily monitored systematically and in detail. Hence, making decisions on various aspects of the business, from inventory replenishment to order fulfillment, can be easily decided upon. Additionally, strategic planning can be enhanced since variables such as demographics, cost implications, and resource availability and requirements can be easily inputted in the system to yield figures or statistics that guide better strategic planning.
- Improved responsiveness to changes
An ERP’s ability to present business information in a more useful form makes it a good tool in becoming more responsive. The ERP makes it easy to detect changes that could have serious or significant impacts on business operations. With that, implementing an actual ERP Change needs careful planning. It can also make it easier to identify opportunities that can be leveraged to maximize earnings. ERP enables information flow between all business functions and facilitates the management of connections to external stakeholders.
- Automation and best practices
The automation of data recording, storage, organization, and processing can help streamline plans for expansion or business growth. ERP tools can automate back office functions, testing, debugging, and other development tasks, so managers can focus their attention to more high-level endeavors. Additionally, many established ERP systems can provide suggestions or guides on best practices to make the most of opportunities and significantly reduce potential risks.
- Better matching of resources or selection of more effective processes
ERP and automation solutions can lead to efficiency and better business management, particularly in matching resources with specific needs to achieve the best possible results. It can also help determine the right processes or mechanisms to adopt in order to create conditions that are more conducive to business growth or expansion.
Impact analysis solutions for effective ERP implementation is always an advantage. There have been many success stories to prove this idea. Some companies claim that they were able to improve product availability, reduce the need to use expedited freight services, lower maintenance costs and repair time, reduce inventory variances, and even enhance traceability for ISO compliance and improved accountability. Forward-looking companies likely already have their ERP systems in place. ERP can support business growth and development.