The task of implementing an ERP system should not be taken lightly. The system, once in place, can yield tremendous benefits, but the project itself calls for a major investment in terms of time, money and effort – so a strong foundation is important. One of the first steps, of course, is choosing the system that best meets your company’s needs… and that’s where we’ll start the discussion. Let’s begin with a short description of what an ERP system is, and then outline its key benefits. After that, we’ll discuss the selection of an ERP system and an implementation partner.
What exactly is an ERP system?
An ERP (Enterprise Resource Planning) system is an integrated software package that, in general terms, can be used to manage all of a company’s processes. This type of system covers every aspect of business operations, including human resources management, accounting and financial management, and help with decision-making, as well as procurement, manufacturing, distribution and sales.
Companies operating without ERP use applications from different sources (some customized and/or developed locally) that are not integrated into a single system. The various applications share little or no data and are not always designed to work simply and in perfect synergy. A lot of IT effort is required for ad hoc integration of disparate systems, and the results do not always meet expectations. One benefit of an ERP system: the functionalities of all these applications are seamlessly built into its actual design.
An ERP system is much more than a way to automate all of your business processes – it is one of the best decision-making tools available. One characteristic of ERP systems is that all of the modules use a shared database, so multiple dashboards can be created and will provide data in real time. The data, once available, can be accessed by all players, who can then make the right decisions in a timely fashion.
The ERP system generates reports and features electronic dashboards that show you what’s happening, in real time, throughout your organization, so you can gather business intelligence and perform advanced analyses based on facts rather than forecasts.
The benefits of an ERP system
Drawing up an exhaustive list of the benefits associated with an ERP system is a highly arduous – if not impossible – task. We’ll try, nonetheless, to quickly review some of the key benefits. How best to summarize these benefits, especially in an industrial setting? The system helps manufacturers do more with less. In general terms, an ERP system helps grow revenues and – more importantly – margins. It can help make your business more efficient and more agile.
An ERP system also transforms the human capital and financial management processes by drawing on industry best practices. It can strengthen HR using feature-rich tools, just as it can help you improve and modernize your financial management.
Another key benefit is the optimization of resource management while maintaining client satisfaction. Use an ERP system adapted to your needs, and you can control the costs of meeting clients’ requests, for a more streamlined path to better profits.
Since the best ERP systems also include risk and compliance governance solutions, they can help you achieve compliance with current standards and requirements, as well as industry best practices. An ERP system can make regulatory compliance easier. It can also meet most audit and record-keeping tracking requirements by using aspects such as its product life cycle management features.
An ERP system can also make your corporate data – which are often a major asset, after all – more secure. A system worthy of its name will protect your data by setting up user roles and security parameters, for example, so access to data is restricted based on each person’s actual needs.
Part 2 of this article will show you, in greater detail, how to choose an ERP system adapted to your needs, as well as an implementation partner who can help you every step of the way. By choosing the right system and partner, you can successfully implement your ERP system, and quickly realize the expected benefits.