Enterprise resource planning (ERP) is the integrated management of main business processes, often in real-time and mediated by software and technology. ERP is usually referred to as a category of business management software typically a suite of integrated applications that an organization can use to collect, store, manage, and interpret data from these many business activities. ERP creates a more agile company that adapts better to change. It also makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business-internally and externally. ERP can improve data security in a closed environment. A common control system, such as the kind offered by ERP systems, allows organizations the ability to more easily ensure key company data is not compromised. This changes, however, with a more open environment, requiring further scrutiny of ERP security features and internal company policies regarding security. ERP provides increased opportunities for collaboration. Data takes many forms in the modern enterprise, including documents, files, forms, audio and video, and emails. Often, each data medium has its own mechanism for allowing collaboration. ERP provides a collaborative platform that lets employees spend more time collaborating on content rather than mastering the learning curve of communicating in various formats across distributed systems.
Benefits of ERP Software :
Reduced Software Overhead :
ERP software allows teams to consolidate their tools into one unified system. Instead of paying for separate subscriptions for a supply chain management, core HR, CRM, shipping, and inventory software, teams pay for a single platform that handles each of these tasks in a centralized system. Depending on the company’s size and complexity, reducing the number of software system subscriptions can significantly cut the monthly overhead.
Increased Communication :
When all sectors of the company gather in a single software to plan and track business events, all of the business data can then be made available for team review. Many modern ERP systems invest heavily in analysis tools and visualizations that let team members create reports that show progress, indicate inventory levels, and notify colleagues of wins. ERP software then acts as the single source of truth for stakeholders to compare successes and prepare for bumps in the road.
Silo Reduction :
While still useful for storing grain, business silos–where teams work independent of one another to everyone’s detriment–are a luxury no one can afford. An ERP helps to bring business goals and planning out into the light of day where teams can share effortlessly with one another. This allows teams to compare notes across departments, helping everyone move toward those big business goals.
Standardization of manufacturing processes :
For large manufacturing corporations with several facilities, sharing manufacturing plans and best practices can be vital for product and process standardization. ERP systems allow manufacturing teams to store manuals, blueprints, regulatory information, and vital statistics for each process in a single, searchable location. This allows processes to be replicated across country and country lines without sacrificing quality or speed.
Whether it’s the number of widgets or the humans that install them, it’s costly to keep more resources on hand than you need. ERP solutions provide inventory tracking and analysis that allows companies to run leaner. Using technology like RFID tags, and biometric data, ERP systems can track assets through their entire lifecycle from supply to sale, and many ERP systems will suggest inventory improvements over time. With reduced inventories, companies can repurpose storage space and cut down on their payroll costs.
Standardization of human resources information:
Many ERP solutions provide Core HR products like payroll, scheduling, time clock, and benefits management. These were a logical extension of the types of software that connected the front of house, warehouse, and c-suite. With Core HR features, an ERP system can use the time clock software to calculate payroll and benefits, and managers can access employee information when building schedules. Because humans are often a company’s most expensive and valuable resource, it’s vital to connect the software that manages them with the rest of the enterprise’s data.