What is an ERP and why your business needs it?

ERP systems have become an integral part of many businesses. It is the very core that keeps the organization’s critical data altogether in one place safely, organized, as well as well-structured.

What is an ERP?

It may seem simple to get the information about what it is. It is enough to type “ERP system” in a search engine. However, you probably will not get a simple answer to this question. ERP stands for Enterprise resource management system. But what are these resources? You may probably think that if you run a company which is comparatively small, you’re probably out of need of the ERP. But the reality is different.  If there are 10 people in your company, then you plan a small number of parameters and, probably, you will not need a heavy ERP, but the system will be useful for your business. Even if currently your company is small, you can’t but keep in mind the idea to grow your business. You definitely work on elaborating the company’s strategy and think of how to increase profit.  May probably set a task for yourself saying “to increase the company’s profit by so many percent”. But to achieve this, you have to divide this strategic goal into some small steps, evident to your employees:

  • 10 new customers per month;
  • 3 monthly publications in mass media
  • 5 new regional partners monthly, etc.

Don’t you need an instrument to control these non-financial indicators? Don’t you need to see financial and non-financial indicators to reveal the relationship and influence of one on the other.

The next step is fulfilling the of these accepted aims, which in its turn makes it possible to reach the mentioned above strategic goals:

  • growth of the company’s market presence by x percent per year
  • entering a new market
  • physical growth of the company by x percent per year
  • revenue increase by x percent per year.

All these we have just discussed are nothing but the company’s resources you have to manage. You can manage them without an ERP, but the result will be poor. The explanation is simple: you and your colleagues can’t keep everything in mind. But this is not the only problem. Without an ERP, you can’t make data-driven decisions, i.e., no market data = no real sales plan = no profit control. It is the very task of an ERP to help your enterprise to avoid delays or downtime.

The goal of deploying the system is to optimize the costs and resources of the organization. The system sets uniform standards for processes in the production, operation of remote offices and employees, it is much easier to determine their effectiveness.

Is an ERP is needed for you?

Many statistical and analytical resources state: in 2019 ERP systems will be of significant importance. What’s more, the ERP market is expected to exceed up to $41.69 billion by 2020.

Surely, every business is unique, so probably there is no concrete indicator saying “ERP is needed just now”. However, it is likely that the enterprises that gain profit from this instrument will have same frustrations. There exist quite obvious signs your business is ready for ERP.

  • Separate software for different processes.

Think about how info’s tracking and recording within your company is organized and how it functions. If accounting department applies one system, and sales uses a different to receive and process incoming orders, that’s the right way to chaos. With your front-end and back-end running separately, you can’t ensure your business runs smoothly. Without a unified database, all the departments suffer.

  • Time-consuming IT-support

It is another drawback of having diverse systems across your business. Their customization and integration whip away overcritical company’s resources.  Just think of the time-consuming updates, which can by the way dismiss all the customization work that your IT team has previously set. Additional software is not a way-out as well. Make your choice in favour of an integrated ERP, making it possible to easily adapt to the changing business needs.

  • No real info about the business

It might turn out to be you can’t even calculate what an average sales margin equals. Rather than rely on spreadshits that require constant have-a-look and updates, ERP solutions are able to empower any executive with a comprehensive data on the firm, to that he can have a full picture of all business operations, while other departments can source the crucial data for their daily work.

  • Poor analytics

A centralized information database greatly contributes to the improvement of your company’s analytics and reporting. Likewise, it touches financial statements. In case to gather together the required financial info takes forever and a day, an ERP is your source of improvement. Your accounting staff will definitely experience much less frustration and the department will enjoy productivity with no delays delivering the reports timely and without pressure.

In a nutshell: company’s efficiency demands things connected. In due time data fragmentation pushed companies to turn to ERP systems implementation. Have a clear, real-time view on your business operation.

In case you can see the company you run with these imperfections, you should seriously reconsider implementation of an ERP system or a serious revision of the current one. Contact Codeinspiration.pro and receive comprehensive advice and support on your question. With our customer-focused approach, we’ll deliver the right ERP system tailored for your concrete necessities.

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