What exactly is ERP software?

In any business, efficiency is key. As the saying goes, time is money, so the more time your business loses through time-consuming processes, the less time you’ll be able to spend on the things that matter — driving sales, maximising profits and ultimately strengthening your business.

As your business grows, this problem becomes increasingly pertinent. Scalability is an issue that many growing businesses face but thankfully, software has been developed to ease the pressure on businesses and streamline processes. Enterprise Resource Planning software (ERP software) is one such option — but what is it and how can it benefit your business? I’ll explain more:

What is ERP software?

As I’ve already mentioned, ERP software stands for Enterprise Resource Planning software. It is a form of integrated business management software that helps centralise core processes, simplifying management and reporting. Essentially, the software acts as a central database of information, from which data can be retrieved, managed and interpreted.

There are a number of processes that can be managed via ERP software. While this will vary on a business-by-business basis, these processes can include:

• Customer Relationship Management (CRM) — Instead of a spreadsheet localised on an employee’s desktop or a smattering of business cards, ERP software can help you store contact information and track the status of both current and past communications within the CRM

• Financial Management — Reducing costs and maximizing profits is a priority for any business, regardless of its size. By improving visibility of business finances, you can gain greater control over your assets, cash flow and accounting.

• Project Management — Tying into the financial management aspect of the software, the package’s project management capabilities will help you manage delivery times, budgets and billing on a case-by-case basis.

• Business Intelligence — Through having all business-critical data centralized in one software package, intelligent tools make real-time reporting and analysis simpler, delivering the data you need quickly.

• Human Resources Management — Identify gaps in business resources and recruit the right people to support and drive-forward your business.

• Stock Control & Sales Order Processing — Streamline your supply chain with effective management of purchasing, manufacturing, stock inventories and sales-order processing. Gain complete visibility of your current stock, maximise your existing and future assets, and free up your finances.

• Traceability — Traceability is important in most areas of manufacturing. Track items from beginning to end and introduce tighter controls on waste, rejections and cost. You can identify problems at the earliest stage, minimising the impact errors can have on your business.

Above are just some of the capabilities offered by ERP software. For more information about our own ERP software package — view our dedicated page K8 Manufacturing.

Because of the numerous tools it offers, ERP software is a popular choice across many sectors. However, due to its specific supply chain and operations management functions, it’s particularly useful within the manufacturing industry.

Benefits of ERP software

With so many people choosing to utilise ERP software in their business, it offers numerous benefits, including:

• Increased visibility - How many times has an opportunity been missed as a result of a breakdown in communication? ERP software’s central database eliminates the uncertainty and keeps all employees in the know. It ensures that everybody has access to the accurate information that they need — so there’ll be no time lost working on outdated figures or documents.

  Depending on the scale of your business, you may want to set access restrictions to ensure that only the people who need the data can access it. For example, do warehouse and order-processing staff really need access to your businesses financial and sales data? These access controls act as an additional safe-guarding factor.

• Real-time accuracy - How does your current reporting system operate? If a large chunk of business time is spent pouring over a spreadsheet, fiddling with formulas and formatting, you could benefit from the real-time data and reporting functionality offered by ERP software.

  The real-time accuracy of the data means you’ll have a clear overview of your current business performance. Nothing is left to chance — you can clearly identify where your strengths lie, what your weaknesses are and potential areas for improvement. It’s this kind of knowledge and business intelligence that helps drive forward success.

• Streamlining processes - Ultimately, the greatest benefit of ERP software is its ability to streamline processes. Whether it’s the supply chain or your internal processes, ERP makes the day-to-day running of your business simpler and more efficient, giving you more time to focus on what really matters.

What are the alternatives to ERP software?

Despite its many benefits, some people still try to find workarounds to ERP software. These workarounds can be defined as anything from making-do with a spreadsheet to multiple systems that have been employed in an attempt to avoid the cost of implementing ERP software.

However, while these methods are okay as short-term solutions, they could be doing more damage to your business than you may realise. For example, employing multiple business management systems means multiple costs, multiple training sessions to teach employees how to use them and the risk that data will be incorrectly synced across them. If information is logged incorrectly, the picture your data paints of your business will be inherently wrong.

Not only this, you’ll also have to deal with the time that’s lost through updating multiple systems. As a central, scalable package, ERP software eliminates the above risks. If you value productivity, profitability and business intelligence, there is no other option; ERP software is the answer.