erp solutions

Why ERP Solutions Are Business Mission Critical

In Business and Leadership by Tim AlbrightLeave a Comment

erp solutions

Photo credit: NextecGroup

What Are ERP Solutions

What are ERP solutions? Great question. ERP, aka Enterprise Resource Planning is figuring into more conversations in the halls and boardrooms of businesses large and small—and with good reason. ERP solutions are software that allows the integration of various functions throughout the enterprise into one complete system. That allows for the streamlining of processes and information across the organization as a whole. ERPs are used for all processes that are a part of running a business, including inventory and order management, human resources, customer resource management, accounting, sales, marketing, and others.

This software-forward business tool could well be the next arrow in a successful enterprise’s arsenal. In fact, I’d even go so far as to say that an ERP solution is business mission critical.

Why You Need an ERP Solution

Type the term “ERP” into any search engine and you’ll find a wealth of information—and admittedly, it can be a little overwhelming. You’ll discover along the way that some of the biggest names in software and processing have ERP offerings, which is probably an indicator as to why an ERP solution is an important tool for your business. SAP, Oracle, and IBM are among the biggest providers of ERP solutions.

Why does your company need an ERP solution? The better question is probably “How can your company go without an ERP solution?” ERP solutions make everything better. Here are just a few:

Real-Time Data. ERP solutions provide your team with a global, real-time view of the data they need to do their respective jobs. This allows them to be proactive about problems and constantly improve along the way.

Compliance/Risk. ERP solutions can help manage regulatory compliance and reduce risk for the company.

Automation. ERP solutions allow the automation of core business operations like lead-to-cash, order-to-fulfillment, and procure-to-pay processes.

Customer Service/Customer Experience. ERP solutions allow organizations the ability to use one source for billing and relationship tracking, making for improved customer service and customer experience.

Employee Experience. ERP solutions can automate many HR processes, from employee onboarding to standard HR functions, affording employees a better overall experience.

These are just a few of the benefits of integrating ERP solutions into business operations, but chances are good you’re seeing why this software is becoming a mission critical part of global business operations.

ERPs Impact Processes

I touched on some of the benefits of ERP solutions above, but it’s probably worth mentioning that ERPs impact processes in a big way—for organizations of all kinds and all sizes. The best way to think about this powerful software tool is to imagine a dashboard that contains all the information on your business. In the past, information was largely siloed by various departments in their own systems. Today’s ERP solutions are changing that. Today, savvy, forward-thinking enterprises are using ERP tools to collect information from all departments within the company, and amassing it into one master ERP system. As a result, the software compiles and cross feeds the information and churns out a single look at the health of your business, rather than a siloed one.

This consolidation of data does a number of things. One major benefit of ERP systems is the elimination of information walls, or silos, as mentioned above. When information barriers are broken down, every department can see what the others are doing and can make decisions with the benefit of a full picture, and all the information available, not just what is known within their group. ERP systems also allow for creating and deploying standardized customer service, as well as government compliance. Finally, the modern ERP system will assist your company in automating tasks that take hours, which can help reduce personnel costs and keep operating costs down overall.

ERPs Fuel Automation

In business, having the advantage of making decisions quickly and with as much information as possible is valuable. One of the biggest advantages of deploying an ERP system is automating data collection and distribution. Today’s businesses are embracing automation at a rapid pace, and with good reason—automation equals efficiency and increased productivity.

Today’s ERP systems take data from various departments. While it has that data, the software applies analytics, artificial intelligence (AI), and machine learning. Purchasing, accounting, inventory, and other data points are displayed on a dashboard and are put through various filters. The lenses this information passes on will vary based on your business and specific use. As the business owner or operations team, you decide what gets collected and how it is distributed. For that reason, there are certain templates used to begin the process, but you are the one who adjusts the levers and dials of the ERP software.

The Business Case for an ERP

As you’re deciding whether an ERP system is right for your business, ask yourself what you know right now. Do you and your leadership team have access to data that affords insight into every aspect of the health of your business? That information is, and should be, an invaluable part of business strategy. Knowledge, as they say, is power.
If you’re operating with an ERP system that’s locked away and accessed only by certain departments, and the information collected isn’t aggregated, analyzed, and shared, it really isn’t doing your company much good. An enterprise-wide ERP affords everyone within the organization the opportunity to see the whole picture and make decisions based on a full data set.

An ERP in Action — Let’s Look at Widgets

For a story about an ERP in action, let’s take a look at widgets. In the widget factory, the construction of widgets requires three components and about ten minutes of labor. If one of the components began to fail on a regular basis, the widgets would still get made. The workers on the assembly line would simply replace the broken component with another out of the bin and the assembly line moves on.

But those one off widget failures add up. What if it keeps happening on an increasing basis and no one reports the failure and calls for an inspection of the component at fault? If it takes you a week to figure out there’s a problem, it could cost the company hundreds or even thousands of dollars. If you never found out, the costs would be astronomical. With an automated ERP system in place, counting the components and tracking every aspect of the manufacturing and assembly process, you would know immediately how many extra components were required to make each widget, and where those parts were supplied. With that knowledge, you would contact the component supplier, get the issue resolved, and save yourself time, headaches, and money.

Wrapping It Up

Deploying an ERP solution is not a quick process and in my opinion, this not a DIY undertaking. The company from whom you purchase your ERP solution are experienced at everything having to do with an ERP deployment and relying on their expertise as part of the process is the key to success. These pros haven’t done just one ERP solution deployment, they’ve done hundreds. During the process, they will need to be inside your businesses, and inside the heads of your leadership team. They will get to know your business intimately, and their help will prove invaluable when it comes to creating the processes and automation that are needed for a smoothly functioning ERP. Once an ERP solution is up and running, in no time, you’re going to see the benefits, including new workflows, exposed areas of weaknesses within the organization that you can correct, and the elevation of your business to the next level of efficiency and effectiveness.

Tim Albright is the founder of AV nation, an audiovisual industry B2B media firm. Tim is an expert at all things related to broadcast television, radio, education, programming, digital media production, and he’s been teaching and producing podcasts since 2006. He has spent the last ten years focusing on and researching trends in business communication, where it is, and where it’s going. He joins the Futurum team as an analyst focusing on the Collaboration and UC space.