ERP system definition

Firstly, let’s establish a definition of what an ERP system is. An ERP system is essentially a core programme that allows you to manage every component that goes towards making up your business. While these different parts of your business may feel separate, and they may be run by different departments, an ERP system will help you to integrate them all into one system.

You might use different ERP modules to manage each different section of your business, such as a separate module for your financial team, supply chain, customer services, and so on. These can provide different insights which are relevant to these departments, but ultimately draw on the same data pool. One of the biggest benefits of this is that it can reduce human error, as all information on your business is kept in one place and is accessible to everyone that way.

Modern-day ERP systems are usually advanced software that operate via the cloud. This means that they’re accessible via the internet, therefore making them accessible while working remotely away from an office. Also thanks to cloud technology, the ERP system will be accessible to all of your different departments, no matter where in the country – or the world – they are based.

Why use ERP systems?

Why is it important to integrate all of your business processes in one system? There are several answers to this question. When all of your departments have access to the same system, with all of your data about your business in one place, they are able to make better decisions, such as whether your accounts payable needs to pay suppliers or freelancers at a particular time, alongside information about your budget for various different projects. Your financial team will be able to see who is being paid for what, as well as effectively manage your budget and close your books at the end of your accounting periods.

Some benefits of using ERP systems include the following:

• Can improve productivity;
• Can improve communication across business departments;
• Can offer real-time reporting with data analytics;
• Reduces the risk of human error;
• Can streamline and simplify information technology processes;
• Can offer greater transparency on cash flow (especially to top management);
• Makes sure that your different departments all have goals that align with each other;
• Can provide better insights into your data with the help of analytics.

Below, we’ll look at some of these key points and how ERP can help give your business a boost.

How ERP can provide data analytics

ERP analytics involves gathering data from across your entire business in order to help you make more informed decisions, which are often based on real-time analysis. ERP analytics can provide your top management with an overview of your business’s current state, helping them to make better decisions. This information may include the following:

• Performance analytics that show how well you’re meeting targets;
• Finding trends and patterns via data mining;
• Statistical analysis to help find out why trends happen in the way they do;
• Data visualisation in the form of charts and maps that can be presented during discussions and meetings;
• Data querying, which allows you to extract even more specific information from datasets.

With the help of ERP analytics, you can achieve the following:

• Better demand forecasting, leading to better decision-making when it comes to stocking inventory, expanding supply chain networks, and providing better customer service;
• Gaining real-time insights into customer behaviour and employee performance, providing key insights into why certain trends emerge.

Using ERP to improve employee productivity

ERP can also be an essential part of your employee engagement and productivity strategies. That’s because ERP can help you consider the entire picture of your business, while honing in on employee engagement in particular. ERP tools can help employees complete tasks like inventory management, or create new orders for clients or customers faster. This can reduce frustration, and therefore potentially improve your employee’s sense of satisfaction in the workplace.

However, it’s worth bearing in mind that you’ll have to train employees in ERP skills so that they’re able to efficiently use the software and get the most from it. Ultimately, helping your employees to learn ERP software can reduce human error throughout your business pipeline, as well as saving time which can be better spent on tasks which need a friendly human face, such as customer service responsibilities.

Using ERP to make sure your department goals align

ERP systems can help you ensure that your department goals align. But in order for this to be a success, it’s important to set policies and objectives which help you to align your ERP with your overall business goals. It’s also a good idea to look at your business’s overall strengths and weaknesses, as well as potential pitfalls which could affect your business in the coming years or months. After all, you’ll need standards and parameters in order to measure the metrics provided by your ERP system against. It’s also worth making sure that your current business processes, data flows and systems so that you can identify new pain points or potential issues.

Not only is it important to make sure that your business goals are aligned with your ERP, it’s also worth noting that different departments will also likely need to agree to use the same ERP model. Otherwise, you may run into conflicts between different teams if they have different plans.

ERP systems can be an effective way to gain key insights into business trends. However, in order to use it most effectively, consider aligning it with your current business goals and ensuring that all departments are confident with using the same system. By training employees in the use of ERP systems, you can help them to more effectively draw insights, manage inventory, and order in new products for customers.