ERP stands for Enterprise Resource Planning. It is a term that first came about around 1990, but even though it is decades old, it is arguably still not that well understood. However, it is definitely a concept worth getting to know as ERP can be a valuable tool for many different businesses, enabling them to improve their processes and make the way their company operates much more efficient.
This article looks at some important factors about ERP, including the types of company that might well benefit from it, what some of those benefits are, and factors to consider when you are choosing an ERP system for your business.
What types of company should use ERP?
If you run a very small company, you are unlikely to need a specific ERP software system because your business should be compact enough to take care of all its operations without one. However, there comes a point in the growth of any business where it needs to look again at how it operates and how all of its departments relate to one another.
After all, as a company grows and gains more employees working in an increasingly diverse range of areas, departments can grow apart from each other despite your best attempts to keep them communicating well. If everyone is working according to different departmental processes, for example, it will make it much harder to coordinate things on a company-wide basis.
If this concern sounds familiar to you then it is likely that you will benefit from ERP software. It doesn’t really matter what industry you work in – sometimes people think that ERP relates to either manufacturing or accounting. While it does incorporate these aspects of a business, it also covers everything else, from sales to marketing, HR, payroll software and CRM. This sort of system can benefit businesses in all industries, so if your company is growing and your current systems are no longer meeting your needs, it could be an investment worth considering.
Why is ERP beneficial?
One of the main benefits of using ERP software is that it is so comprehensive. It is heavily focused on business integration and making sure that all the different departments of your business work well together. This can be particularly useful if your company is based on more than one site but there is still a need to coordinate your work – you can all use the same ERP system to do this.
Another reason ERP software can be helpful is that it allows you to generate reports relating to your business. This can be useful for managers and other senior staff with responsibility for overseeing sections of the business. It enables them to keep track of progress, spot areas of weakness and generally keep up to date with the latest data associated with the company.
It can also have benefits in terms of communication. For instance, rather than having to go to each department separately to find out about their expenditure, the accounting department would instead be able to use the integrated systems to complete their work much more efficiently.
How should you choose an ERP system?
Now we come onto the topic of how you should go about choosing an appropriate ERP system for your business. The first thing to say is that there are different models available for different sizes of company, ranging from software that is suitable for mid-market businesses looking to connect different sections of their business, to software that is suitable for organisations operating on a global level.
This is one of the key issues to look at when choosing your ERP software – you need to choose a system that will be as easy to implement as possible and one that can be tailored to the needs of your business. For instance, look for a system that offers flexibility and the ability to choose your own reports and applications as well as offering a good set of standard services.
Also look at issues such as how many people will be using the system as different software has different user limits. One thing that all ERP systems have in common though, is the aim of connecting your organisation more effectively than it was connected before.
This is really the key test of an ERP system: if you think your business needs to be better connected so that you can gain a better understanding of it and work more efficiently, you are more than likely to benefit from ERP software. Carefully choosing the right system for your needs should further boost your chances of implementing the right solution for your business.
