Enterprise resource planning systems are not particularly new, but the new generation of these systems is being adopted by companies wishing to survive in these uncertain times.
Lowering costs, improving efficiency, and increasing productivity in your business should be a priority. Businesses must become leaner and more agile if they are to grow and flourish today.
If you are unsure whether your business needs an ERP, or you are unsure of what one is, then read on to see why they are important today, and going forward.
Which industries use ERP?
You may first be interested to know what type of industries are using ERP to understand whether they would be relevant to you.
Manufacturing and construction have used enterprise resource planning for decades. The Gartner Group first coined the phrase ERP back in the 1990s. However, many other industries and well-known brand names use ERP outside of the manufacturing sector.
Starbucks is just one business operating in hospitality that uses Oracle ERP. Amazon is another huge company that enjoys the benefits of ERP.
Industries that use ERP are as follows:
- Manufacturing
- Distribution
- Construction
- Hospitality
- Health Care
- Financial Services
The industries using ERP are not strictly defined by this list, and many other sectors can benefit from these systems.
Why is ERP important to businesses now?
Installing a good ERP system will bring numerous benefits to a business. Basically, an ERP will link together all facets of a business to one centralized database.
This means that manufacturing, HR, finance, warehouse inventory, and IT, would all be linked together with information shared. An advantage of this is that the data is often shared in real-time.
Read on below to see in what ways an ERP benefits a business, and why they are important.
It helps to create a data-driven environment
Using enterprise resource planning can help a company head towards being more data-driven. This is helped by the system being able to link the different departments and share data. This is then analyzed, and interpreted, to help make strategic business decisions.
They can help with improved security
Anyone working in IT will understand that learning to keep your business safe from online threats is vital today.
Cybercrime is seemingly getting worse each year, and companies come under attack every day from hackers and bots. An ERP can not only help with reporting and data analysis, but it can also help protect that data by encrypting it.
They can help to save money
Many companies have operated in the past with different types of systems and software throughout their departments. This can often lead to poor integration, tasks being carried out more than once, and the cost of software licenses.
An ERP is one integrated system that brings all the departments together with information being able to be shared as there will be no incompatible sections anymore.
This removes the need for expanding IT departments or purchasing more technology or adding staff to the payroll.
Enterprise resource planning also helps to eliminate mistakes and therefore can save money in this area too.
They allow a company to automate mundane tasks
One example of an innovative company using ERP is Sunnova. This company specializes in alternative energy sources, namely solar power.
Sunnova Energy Corporation uses Rootstock ERP to help streamline its processes and at the same time automate many of the more tedious ones.
Automating processes in a business has the effect of removing mundane tasks from employees who are now freed up to take on more important roles. It also helps to remove the possibility of human error which often happens with these sorts of tasks.
ERP will help to increase productivity
Companies are having to evolve to survive the harsh business climate that has been witnessed over the last eighteen months or more. The pandemic has destroyed many businesses, especially in the retail, tourist, and hospitality industries.
ERP can help a business to be more streamlined and operate more effectively. The access to reports and data means that problem areas are more easily identified. Processes that are not working and need to change can be spotted and improved.
Through the use of automation and a change in some processes, a business can improve its productivity, and help the employees too. By improving the way the business works, you will have happier employees which naturally translates to better productivity.
Summary
Next-generation ERP is something that many business and industry experts are now discussing. An ERP strategy for a post-pandemic world would include migrating to next-gen ERP systems sooner rather than later.
The pandemic made it clear that businesses need to be more efficient, embrace the digital world, and be more profitable, to survive.
Ecommerce is expanding far quicker than many people have anticipated. Largely this is due to the lockdowns and the need for online retail. However, seeing giants such as Amazon using ERP should be a sign of how important this way of working is right now.
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