What Is ERP & Why Is It Important?
The much-quoted saying, “If you can’t measure it, you can’t improve it”, is at the core of why ERP systems are so important.
To manage your business effectively, you need to track what’s happening in every area in as much detail as possible. This data provides the basis for informed decision-making that can help improve efficiency and profitability.
But without having the capacity to know what’s important and what’s not and to analyse and interpret that data, you’re still effectively flying blind.
That’s where ERP systems come in.
What is ERP?
ERP stands for Enterprise Resource Planning.
It’s a type of software that helps businesses manage and automate many vital processes that keep the wheels turning on a day-to-day basis by bringing together data from different departments and functions.
In the manufacturing industry, this might include everything from managing inventory, production planning, and tracking orders to handling payroll and accounting.
An ERP software can be considered a business’s central nervous system, tying together all the moving parts and ensuring they’re working in harmony.
It presents all the relevant information in a way that is easy to understand and actionable and gives you a complete, real-time picture of what’s happening in all areas of your business.
What are the benefits of having an ERP?
Here are some of the core benefits of having an ERP system in place:
By bringing all of the different data points across the business into a single, centralised software solution, ERP provides a comprehensive information flow that can help inform decision-making.
At the same time, it can also allow you to drill down into the details of any particular area when necessary, providing greater transparency and visibility.
- Improved decision-making:
ERP systems can give you the insights you need to make better decisions about your business. Good ERP software can help you identify issues and opportunities as they arise and make decisions to help you hit your business targets by providing real-time data that is easy to access and understand.
- Automation and improved efficiency:
One of the most important benefits of ERP is that it can automate many repetitive, time-consuming tasks that need to be carried out daily. By automating and streamlining key processes, ERP can help to improve efficiency and free up valuable time and resources that can be better spent on more strategic tasks.
- Cost savings:
By helping businesses to identify and avoid duplication of effort and errors, ERP can lead to significant cost savings.
- Improved customer service:
With the ability to provide up-to-date information on stock levels and order status, ERP can help businesses improve their customer service.
The downside of an ERP system is that it can be complex and time-consuming to implement and requires a high level of commitment from all employees. You’ll find ERP systems for every business sector, some that try to be ‘all things to all people’ and others that specialise.
Choosing the right ERP system for your business is also essential, as it can be difficult and costly to change systems later down the line. Download our free guide on choosing the right software for your business.
But when it’s done right, an ERP system can become an invaluable partner and a powerful tool that can help businesses improve their performance and put them on the road to hitting their growth and profit goals.