Benefits of ERP: Why to invest in ERP?

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Hitendra Rathore

Senior editor

Parul Saxena

Chief editor

Last updated: July 7, 2021

Do you have issues with your internal business processes? Does that affect your overall business performance? With our complete dependence on technology, we somehow feel handicapped when our workflow gets affected mainly because we need to go from one software to another.

Looking for ERP Software? Check out SoftwareSuggest’s list of the best ERP software solutions.

Also, glitches in the system or misinformation hinder productivity. Although every organization functions differently, everyone works keeping in mind that they have to be at the top of the chain. They also tend to share common ERP challenges like finding the most effective way to store data and also get easy access to information. This article is to relieve you of the stress of finding how to get work done effectively and efficiently.

Why ERP System is Important

Enterprise Resource Planning (ERP) system is the answer you were looking for! In the simplest of words, something that makes your job easy by integrating the core business processes in your office and helps you manage it smoothly is what we call ERP.

Enterprise resource planning system is a unified solution that provides applications that can be customized. This lets you manage the most important processes in the fastest manner.

The most used core processes include manufacturing, finance, HR, services, sales, customer support, procurement, supply chain, and many others. Enterprise resource planning system merges these various processes into a single system.

How is it Implemented?

erp implementation

The implementation part of ERP is divided into 3 parts.

  1. The first includes building a prototype for the company and installing the software.
  2. The second aspect incorporates the training session where everyone is provided with lessons on how to work with the installed ERP.
  3. The last step includes the part where the model of the ERP is finalized and then it goes live.

ERP System Selection Myths

1. Oh Dear, it’s Too Dear!

If you happen to be someone who makes one big-time investment in ERP and then, in the long run, sits back to reap benefits, then ERP is for you. ERP is initially a little costly. But it’s a one-time investment. Enterprise Resource Planning software will help you save money in the long run.

The two important tasks it performs are that of making the workflow smooth and lowering the costs. Also, if you are someone who has just started a business, then thanks to the advancement of technology, there are also some less expensive solutions that are made available by some ERP vendors.

There’s something for everyone! Therefore, selecting an ERP is way more beneficial because, by not getting one, you will have to carry out more expenses later on.

2. One for All!

This is not true. Just like every person can’t react in the same manner to a particular situation, one ERP cannot be the solution to all businesses. Every Enterprise Resource Planning software has its own set of functions and solutions.

What you need to see is, what are the issues you keep facing and what would be the best buy that will help you overcome those challenges. Each organization functions differently and therefore it cannot be expected that each one system will benefit all.

ERP systems build customized processes that help different companies carry out different tasks.

3. Lure Clients

A very common myth amongst people is that ERP is kept in order to woo its customers. But that is not true. When all the systems in your organization are synchronized and work in harmony, it is you who gets to work productively in less amount of time.

Yes, customers do reap the benefits by getting responses faster than before, but that only happens to be an additional bonus.

The primary purpose of an ERP is to enhance performance by also improving the quality of products and services and help to strengthen relationships with the clients.

4. Difficult To Deal With

A common belief amongst employers and employees is that it brings complexities in the work regime. But that is untrue. Initially, the installation does take a little time.

But that mainly depends on how big the organization is, the number of people working on the system, availability of resources and many more. But thinking that in the long run, it is there to make life simple, it is advisable to go ahead and install an ERP system.

Although, a huge deal of commitment is required from the organization’s side for successfully implementing the software. The benefits of Enterprise Resource Planning software can only be enjoyed with proper commitment. Once the system is up and running, work becomes more easy-going.

5. Benefits The Big

Although it may look as if the employers are the ones who reap the benefits of ERP, but in reality, the employees enjoy equal benefits as well. No organization incomplete without its employees as they happen to be the backbone that keeps things running.

As ERP synchronizes the different core business processes, it makes work less complicated. It is obvious that only the management will be able to see the benefits, but ERP makes work simpler at all levels.

We know deciding on the right ERP can be a little difficult, but that’s exactly why we are here to help.

We have an ERP software selection guide that will direct you step by step to decide which ERP would suit and help in gaining good results.

We are hopeful that by the end of the article, you will get a good idea about ERP and also about which system will work best with the organizational structure.

Advantages of ERP

There are ample benefits of ERP that come to mind. The biggest advantage that one can come up with is that it helps you compete with your counterparts in the market.

ERP helps you to be on your toes by reducing errors and being efficient. Time and tide wait for none. In this competitive world, it is important to deliver things in time than being late and losing out to someone else. The other benefits of ERP are.

1. Space

In today’s day and age where multiple data needs to be handled, space becomes a huge concern. To manage, interpret and analyze large data, organizations buy different software products.

Various software solutions tend to become a little heavy on the storage drive. Here is when an ERP comes to the rescue. One of the major benefits of ERP is that it saves you a lot of space by integrating the functions of various different software.

2. Forecasts

In a world driven by uncertainty, it is always better to be surrounded by forecasts that can help navigate the way ahead. Now forecasts need to be somewhat accurate in order to prepare for what’s to come.

ERP software helps in creating an accurate forecast for their users and management. Compared to other software, ERP gives you powerful insights for the business by pooling in all the data together.

So, to add to the bucket of all the good things ERP brings, one can surely put this down as one of the great benefits of the ERP system.

3. Efficiency

Imagine if you could reduce the amount of time you were putting in your work on a general basis. Wouldn’t that make you more productive? ERP does exactly the same.

The greatest benefit of ERP is that it reduces the amount of time and labor you put into your assignment. Repetitive tasks and processes are handled by ERP software.

Apart from helping you to be more efficient, it also suggests processes which can give quicker results thus making it work in favor of the organization. Another boon is that it reduces human errors.

To err is human, but in big businesses, one cannot afford to make mistakes. ERP software helps reduce these mistakes thus making it work efficiently.

4. Security

One of the benefits of ERP is to provide security. We live in times where data security is a big deal. People share their data knowing that it will remain guarded and protected. While the data is circulated within the organization to different departments, the best part about it is, the information can be manipulated in terms of who can view the data and who can’t.

Due to the single input system, ERP happens to maintain good security. ERP cannot be easily hacked into, thanks to the system being on-premise and cloud-based.

Contrary to what people feel, cloud-based systems are far more secure, as they add an extra layer of security.

Unlike private servers that are easily subjected to hacking, a cloud-based ERP system makes it difficult for a person to get access to the data.

5. Customer Service

One of the other benefits of ERP is that it provides high-quality services. The Sales and Customer service department can make interaction with the clients more fluid. It helps build strong relationships faster by providing more accurate information based on the customer’s history.

6. More Focused Costs

ERP systems usually have large investments, but it helps you to unify the IT costs. Every time you buy a new processor/software, you have to pay a good amount of money.

Every software will be charged for individually. But with ERP, you don’t have to pay for different software products because it is all integrated into one, thus helping you save a lot of money in the long run.

7 Customizing It As You Like It

This is hands down, the greatest benefit of ERP. One can customize what they wish to keep and what they don’t wish to pay for. ERP allows you to work and pay for what you will be using.

This way, not only is a lot of money saved but there is ample space saved for uploading more data. Not all processes will be used by all companies.

ERP can be like a tailor-made suit for an organization that allows you to pick and choose according to your liking.

Disadvantages of ERP

Benefits of ERP are more than disadvantages

1. Cost of Software

The very first thing that comes to everyone’s mind is that it is a little costly. But it also depends on which ERP system you are buying. A traditional software will definitely cost you a lot more.

With big organizations, money isn’t much of a problem compared to those who have stepped recently into the market. However, when there is something for everyone you don’t need to get disheartened.

One of the ways is that you must not opt for the cloud-based solution provided by ERP. By not opting cloud-based solution, you will only have to pay for ERP on a monthly basis. But if the payment is not made in time, then access is denied and work suffers.  

2. Too Difficult To Deal With

ERP systems are seen as something too rigid. This is mainly because people face difficulty in getting themselves acquainted to the processes.

When something is difficult, employees lose interest in working because it hinders their productivity.

Dealing with this system is cited as one of the greatest causes of ERP system’s failure.

3. Time Consuming

In order to get the ERP fully functioning, it at least takes 1-3 years. Plus, commitment is required on the part of employers and employees to learn and get used to it.

For any organization, this becomes an issue as they constantly have to keep up with the market and cannot afford to put in so much time and effort into learning new additional things.  

Since the participation of the users is crucial for the implementation of the ERP system, the training can become very exhaustive and users can get tired of learning it.

4. Transfer of Data

Transferring data to new ERP software can be as exhausting as moving from one place to another. It is sometimes impossible to achieve it.

But it all depends on the ERP one is going for. The activity is extremely time-consuming, as well as, it also consumes a lot of money and other resources.

5. High Maintenance

Apart from the fact that the upfront price is extremely high, a lot of the business capital also goes into maintaining it.

In order to see it function properly, the organization must also hire an IT staff, people who can give training about the software, ERP consultants, etc.

Quite a lot of vendors charge fees for maintenance along with the upfront cost.

Signs Your Business Need An ERP

signs erp need

  • If your processes aren’t communicating properly, you need to think of investing in an ERP. Many a time the issue arises where two software products don’t correspond to one another and therefore more time is consumed in doing the job. For a business to run smoothly without glitches, it is necessary that the data flows freely around every department in the organization.
  • When you find it difficult to analyze information about your business, then it’s time you need a good ERP.  ERP helps in gathering data easily by centralizing the information within one single repository.
  • If you happen to be spending a lot of time managing your systems, then you need ERP to your rescue. Running a lot of software can put pressure on the infrastructure and incur a lot of expenses. An ERP reduces the various software you use frees up the IT resources and reduces the cost.
  • ERP is a must-have if you start having issues in analyzing information about your business. A company works well when well-informed decisions are made. If you think that the organization lacks good judgment then you need an ERP to replace the other existing systems.
  • Customers are the reason why organizations are built. When you realize that your customers are suffering due to the unavailability of services, then it is high time you invest in an ERP. With the increase in sales, the demand will outweigh the supply. ERP helps in bridging that gap and providing software that doesn’t lose out on customers.

Points To Consider When Investing In An ERP

There is no particular ERP software that can prove to be successful for all business types because every software comes with different functions.

The main thing you need to note down is, what are your basic necessities and in which field do you need a more robust processor, to make your job easier.

Each ERP system specializes in different kinds of tasks. While some may be more helpful to large enterprises, some may prove more beneficial to small and medium businesses.

Customization is another important aspect that one must keep in mind while investing in an ERP system.

Any ERP software you choose must be able to provide you with the processes you want to choose.

It needs to be flexible enough to get aligned with its business process requirements.

In such instances, on-premise  ERP systems are easier to customize.

List of Top ERP Vendors 

1. NetSuite ERP

oracle netsuite

NetSuite ERP is considered to be a top ERP tool in today’s times. It provides important tools like financial planning, supply chain management, order management, and warehouse and fulfillment.

2. Sage Intacct

sage-intacct

Sage ERP’s specialization is in financial management. It has robust financial applications which include features like financial reporting, accounting, cash management, vendor management, inventory management, project accounting, etc.

3. SYSPRO

syspro

This company is into building business software applications, especially for distribution and manufacturing. SYSPRO ERP is made available on-premise as well as cloud-based. It eliminates repetitive tasks and manual entry.

4. Odoo

oddoThis ERP combines sales and project management, point-of-sale, e-commerce, and material resource planning in one tool. Odoo ERP also unifies various sales channels and business management solutions.

5. Oracle ERP Cloud

oracleOracle ERP manages enterprise operations. It consists of seven software modules for core business processes.

 

6. Microsoft Dynamics GP

microsoft-dynamicsThis ERP is more helpful for Small and Medium Businesses (SMB). Microsoft Dynamics is designed in a way that allows businesses to work smarter and faster. It manages the supply chain, finance and operations very effectively.

7. SAP ERP

SAP

SAP ERP provides powerful analytical apps, access to key data, and simplifies the business process to achieve a competitive advantage.  

 

8. Epicor ERP

epicor

The particular software usually targets medium-sized businesses and large industries. It provides a smart and flexible business and manufacturing support.

 

9. Brightpearl

brightpearl

Brightpearl ERP provides solutions for real-time accounting, inventory management, order management, customer data, and reporting. It also looks after the cash-flow, shipments and insights for the channel, SKU, and customer levels.

10. Sage 300 ERP

sageThis ERP is more focussed on streamlining Small and Medium Businesses. The Sage 300 ERP is more focussed on activities related to finance and operational functionality.

 

Wrapping it up

There is no doubt that ERP truly helps you work smart and not hard. The benefits of ERP have reduced complications like eradicating the use of different software products at different points of time.

ERP is like the one-stop-shop for all your business solutions. Now we understand that deciding on what ERP to go for, can be a little confusing. But go by what we have stated for you and you’ll realize it is not that difficult either.

As long as you are clear on what you want, nothing else should bother you. But do consider every aspect and then decide on what you would like to settle for.

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Hitendra is the Digital Marketing Executive and Content Analyst at SoftwareSuggest and loves helping people plan, optimize and launch marketing & content strategies. While digital marketing is his primary job function by day, hitendra also enjoys spending time with his family and listening to music.

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1 COMMENT

  1. This is so interesting and helpful blog for us. It helps to increase our knowledge about the Benefits of ERP. Thanks for sharing such type of informative blog with us.

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