Enterprise resource planning also known as ERP software, is a suite for application which can manage your business processes like accounting, human resources, customer support, etc. ERP software is an integrated system that an individual software which is designed specifically for the business process. ERP software solutions have gained a lot of attention to both big and small businesses due to their centralized approach. It can help you store, manage, interpret data from various business units and can automatically backup all the office tasks and cross-departmental workflows. These solutions are efficient, lowers costs and increase profitability.
Uses of ERP software
The main purpose of using an ERP software is to increase efficiency, streamline processes and promote a culture of collaboration in the organization. These results help minimize cost and increase productivity.
Some benefits of ERP software include:
- It increases efficiency
- It promotes collaboration
- It increases data security
- It helps you make an accurate forecast
- It helps comply with industry regulations
- It increases operational flexibility
- It reduces operational cost
What does ERP software do?
ERP is a fully integrated process which covers the business processes like
- HRM: modules include performance review and payroll system, which is then later integrated with financial management module to manage wages, travel expense, etc.
- Financial management module manages capital inflow and outflow as it covers standard accounting financial transaction and generates reports for different departments
- Sales and marketing can take the more advanced version of the ERP, which includes taxation rules and shipping tracker.
- CRM module helps you boost customer service and eventually earn profits as it manages all the leads, opportunities and customer issues.
- Manufacturing module helps the business make manufacturing areas more efficient by providing bill materials, production scheduling, distribution plan, etc.
- SCM module manages products from workflow from production to customer with some calls for returns.
- Inventory helps you measure stock targets and other inventory goals as this is integrated with the purchase module.
- Purchasing module involves material procurement, which includes supplier listing, analysis, purchase order, etc.
Potential risks with ERP software
- One size fits all does not cut it: The process is much more straight forward when it comes to corporations with subsidiaries they require a uniform system which runs quickly even in a diverse environment.
- Unsupported applications: The more applications you have, the more difficult it is to integrate quick install ERP solutions fully. It is time-consuming and if you are lucky, you will be able to find an ERP consulting company that can help you integrate the system with your current applications.
- Security risks: The wider the scope of ERP, the more access points it has. This means the more chances of a security breach.
- Lack of compliance: ERP solutions are designed to help in the problems of technical shortcomings and if not implemented properly can lead to over financial compliance.