What is an ERP Software?

Enterprise Resource Planning (ERP) is a business management software that automates the core business processes and coordinates the flow of information between different departments and functionaries. It provides a unified fluid system that meets the unique requirements of businesses in each industry, and keeps up with them, as they grow in size and expand their operations.

ERP collects data from disparate data sources such as production, sales, marketing, customer support, human resources, and accounting departments. It acts as a future-proof solution for industries of all sizes, enabling decision-makers to access up-to-date information from a central database. Decision-makers can analyze different scenarios, identify problem areas, and take corrective measures.

Key Features of ERP Software

1. Business Intelligence & Reporting

ERP consolidates data from different sources and presents the information in intuitive and creative form such as visually engaging reports, pie charts, and graphs. This allows decision-makers to make strongly data-backed timely & accurate decisions.

2. Remote Accessibility

Cloud-based ERPs provide companies with the ability to access their data remotely. Multiple individuals or teams can access the same data from different devices, locations, and times. The data can be accessed regardless of the user’s device- computer, Macbook, tablet, or mobile.

3. Scalability

Scalability is the ability of ERP software to be able to scale up or scale down based on the changing requirements of the company. For example, as the business grows in size and complexity, the ERP supports storing and processing an increased load of business data.

4. Customizability

Customizability is the ability of the ERPs to be customized to meet the specific functional needs of each business. For example, a manufacturing business may have different strategic requirements than a packaging business.

5. Customer Relationship Management

ERP builds a comprehensive database of the customer’s information such as contact details, purchase history, tickets & conversations, and billing information. It can benefit the company in various ways such as increased visibility into sales operations, comprehensive sales reports, better customer retention, and increased sales.

6. Accounting and Financial Reporting

ERP streamlines data entry processes, allowing employees to free up and focus on critical business processes. It empowers businesses with transparency and accuracy throughout financial records, better cash flow management, asset management, and audit trail across various industry-specific processes.

7. Inventory Management

ERP brings traceability throughout inventory management which helps ensure adequate stock is available to meet the current market needs. It makes it easier to track products, classify them with their expiration dates, and optimize their storage. With a solid inventory management system in place, businesses benefit from automation, better decision-making, and productivity.

Read: Top 10 Big Challenges in Mobile App Development You Need to Know

How Advanced ERP Software Outbeats Spreadsheets & Legacy Systems?

ERP systems outbeat traditional spreadsheets and legacy systems in a number of ways:

1. Typically, many small and medium-sized businesses use spreadsheets and legacy systems, which are sufficient for their basic needs. Although they are cost-effective in the short term, they have their own limitations. They may hamper the growth and market expansion plans and lack the tools that are needed to succeed in the long run. In contrast, ERP is a scalable solution that matches the level of complexity of the business and adapts to the changing business needs. It provides a comprehensive set of modules that allow large-scale and complex businesses to manage the intricacies of their operations.
2. Many businesses use disparate systems that lack the ability to coordinate with each other. These systems do not facilitate real-time data synchronization and there is no way to build a comprehensive report consisting of information from all sources. In contrast, ERP is a fully integrated solution that integrates data across all departments and enables decision-makers to get insights into their business operations and take total control.
3. Many legacy tools lack the security features required to protect your critical business data from prying eyes. It increases the potential for data breaches, disruptions of business processes, reputational damage, financial losses, and lawsuits. In contrast, ERP offers robust data security features such as data encryption to protect your data from being stolen, altered, or compromised. The cloud-based ERPs store data on the vendor’s servers with strengthened security measures.
4. If your business relies on dozens of spreadsheets, it may suffer from the problem of data disorganization. For example, with so many spreadsheets with the same name, an employee might start working on an outdated worksheet. Such outdated worksheets may not only provide obsolete information but also lead to complexities, confusion, and human errors. ERPs, on the other hand, build a comprehensive database that provides a federated view of data aggregated from different sources while eliminating data silos, and duplication.

Critical Factors to Consider for Successful ERP Deployment

1. Technical Fit Evaluation

Technical Fit Evaluation is the process of assessing whether the new ERP will be compatible with your business needs and existing systems. Your new ERP shouldn’t disrupt your current business operations, and support smooth and phased implementation.

2. Budget Constraints

ERP deployment involves various costs including software license costs, training costs, and hardware upgradation costs, among others. Choose an ERP that suits your budget. Choosing an out-of-budget ERP can cause significant financial strain, disrupt business operations, reduce employee morale, and lead to an incompletely implemented system. Typically, cloud ERPs are a cost-effective alternative for small and mid-sized companies.

3. Type of ERP (On-premise Vs Cloud)

Does your business need mobility? If your employees need to access the ERP system straight from their mobile without being physically present in the company, you should invest in a Cloud ERP. The cloud ERP provides monthly/ annual subscription payment options, allowing your business to benefit from cost-efficiency, and avoid hefty investments in On-Pemise ERPs.

4. Identify Problem Areas & Set Realistic Expectations

Your company needs to conduct a detailed analysis to identify areas of business operations that can benefit from the ERP implementation. For example, the Project Team working on ERP implementation can draft a detailed documentation of existing workflows, and outline how the ERP will transform them. Such a detailed analysis can help your business set realistic expectations and make the best out of ERP implementation.

Wrapping Up

ERP is an indispensable solution for modern businesses that need to automate mundane tasks and need access to up-to-the-minute information. ERP implementation is a large investment that costs money, time, and organizational resources. Developing a solid implementation plan and adhering to it will help your business get the most out of the ERP.

Sage X3 is a future-proof ERP that offers a range of functionalities and powerful tools that empower your business with a single source of truth, reduced operational costs, and an easy-to-integrate reporting system. It is a highly customizable ERP that empowers your business with full oversight of all company-wide functions and resources and provides powerful tools and features that facilitate faster and more accurate decision-making. 

Author’s Bio:

Sneha Rakte is a specialist in communication who excels at recognizing client requirements. She currently works with Sage Software Solutions, an industry leader in supplying small and medium-sized enterprises in India with high-quality ERP software and CRM solutions.