Why Using ERP (Enterprise Resource Planning)

WHY USING ERP -- When business owners and managers realise that ten Excel spreadsheets and a simple accounting package are not sufficient for managing their business, they should explore this new generation of ERP systems. If you’re in business and considering ERP, you undoubtedly have numerous questions. Should you choose an on-site or on-demand solution? Should you manage the selection and implementation process yourself, or rely on outside consultants?

ERP software consolidates business operations and processes across different functional groups in the business. It allows end-to-end processes to be better managed and for customer-facing employees in sales, marketing and customer service to make quick, informed decisions on everything from effective problem resolution to identifying delays in supply that affects customers.

Benefit of ERP Implementation

According to the Aberdeen group that looked at ERP in the SME market, benefits from a company committed to rolling out an ERP included a 24% reduction in inventory, a 97% accuracy in inventory, 3.1 days to financially close a month, and a 97% on time and complete delivery rate.

An ERP system often comes after a time of growth in a business, when new layers of management have been hired and new tools are needed to manage the complexity of the business. ERP systems provide a range of opportunities for improvement within the business:

•  An ERP implementation project is a perfect opportunity to discover, define, and streamline your business processes and make them more effective.
•  An ERP system implementation also gives you the opportunity to revise and update master data (i.e., non-transactional data such as product information, customers, suppliers, technology, etc.).
•  You can more clearly understand your cost structure and identify opportunities for improvement.
• In a manufacturing environment, an ERP system provides traceability for finished goods— costing structure and sources are fully visible, from raw components to the final step.
• Company data is centralised, data duplication is eliminated, and data entry errors are minimised.
• Personnel are involved in decision-making processes via access to reporting tools. All required decision support data can be made available instantly and with minimum effort.
• A well implemented ERP system dramatically improves your level of customer service.
• Sometimes savings can be realised by reducing the number of personnel, or by making existing staff more efficient (#Erpguidebook).