Enterprise Resource Planning (ERP) is an application that provides internal controls and insights to collect inputs from different departments such as supply chain, aerospace, sales, manufacturing, human resources, and even accounting. At its core, it helps automate business operations successfully. This software that helps predict, budget, plan, manage, and record an organization’s financial outcomes, all of which are included in a complete ERP suite.
A vast number of companies take ERP as a requisite, just like their electricity that keeps the lights on. Since prior generations, ERP systems have become essential to leading thousands of businesses of all industries.
ERP fundamentals
ERP can simply be the vehicle for processes and technologies across a modern enterprise that helps integrate people. The core constructs are connecting systems, the people who use them, and interconnecting with business processes driven by workflows across business departments (e.g., HR or human resources, marketing, finances, operations, and engineering). There are many different types of ERP software, but most ERP operations are outlined around a single, defined data structure with a shared database. This helps ensure that the data used across the industry is not only normalized but also based on user experiences and standard definitions.
From the CEO to accounts payable clerks, the ERP software can surely bring order to chaos so that all users can store, use, and create the same data derived through standard processes. Instead of several standalone databases with an unending inventory of disconnected spreadsheets, the fundamental ERP principle is the primary data collection for large-scale distribution. Everyone can be confident that data is correct and up-to-date, in a centralized data repository, and secure.
Data integrity is assured and performed throughout the organization for every task, from quarterly financial reports to a single prominent receivables statement, without solely relying on error-prone spreadsheets. It makes everything a lot more organized, secure, uncomplicated, and cost-efficient.
Why is ERP Important?
To provide a single source of truth across the business, most of all of an organization’s data resides in the ERP system. So, if we can compare the “Enterprise Resource Planning” to a human, it makes sense to describe it as “the central nervous system” of a business or enterprise. It provides the essentials to run all day-to-day business operations efficiently from integration, intelligence, and automation.
We can guarantee that each department in your business requires help from ERP. Let’s take a closer look at this together.
- To deliver the right services and products to customers on time, Logistics relies on well-running ERP software.
- To manage all customer’s orders or sales, the Sales Department needs ERP.
- Made possible by the ERP system, shareholders and Banks require accurate financial reports to count on reliable data and analysis.
- To make timely decisions, ERP will give the management instant visibility into the company’s performance.
- Finance requires an ERP to close the books quickly.
- To pay suppliers accurately and on time, Accounts payable needs ERP.
Here are also some of the reasons why ERP is critical for your businesses:
Ensure Business Agility
Many ERP solutions are built to help you proactively prepare and readily respond to any operational disruption or market change so your business can quickly adapt to these changes.
Propel Optimal Performance
With a system that integrates artificial intelligence (AI), it will reveal ways to improve operational execution as you advance. You’ll also have access to insights that will enhance your decision-making.
Accelerate Operational Result
By combining data and processes, you’ll bring more flexibility and visibility to employees, guiding them to deliver more value across the business and helping them take action quickly.
Any ERP solution you choose should work with what you’re using now and include features to help your future growth. For instance, if the software you have been using mostly handled the supply chain, manufacturing sides, and your business’s finances, then you may want to look for a solution that brings in a vital business intelligence component. Your business’s success also depends on the business intelligence you’re using.