If you’re considering migrating your business to an ERP (Enterprise Resource Planning) system, here are 15 benefits you can leverage to realize your business goals. An ERP system serves as a central database for your entire company, offering valuable reporting potential, providing numerous ways to increase productivity, and lowering costs across your organization. It streamlines and enhances business operations by integrating various functions, improving compliance, enabling risk management, and providing comprehensive governance to enable better decision-making and operational efficiency.
Several of the first questions you are likely to ask are:
NetSuite put together this comprehensive breakdown of 15 ERP benefits you can leverage in your business. You can use this information in your Leadership team ERP decision-making discussions.
While the concept behind an ERP system is straightforward — unifying all your company departments and their information on a single system — the benefits are vast. Here are 15 of the most notable advantages an ERP system offers your business:
Data has become a prized possession for businesses because it’s so critical to making the best possible decisions, and ERP software can help protect that asset. The fact that all this data is in one place rather than spread across multiple systems with varying levels of security increases the level of protection. It replaces spreadsheets and other documents sitting on employees’ desktops and being passed around via email.
With a cloud ERP system, your information is typically distributed across multiple remote servers to establish redundancies and protect against a single point of failure, adding another layer of protection. This is especially important if your company handles a lot of sensitive customer data.
An ERP system can also increase data security by limiting who can view and edit data. Most systems have permissions that are easy to control, ensuring employees only see the information they need to and reducing opportunities for fraud or other nefarious activities. Additionally, ERP systems enhance risk management by aiding compliance with regulatory requirements and identifying potential risks.
ERP centralizes all information from different departments and is stored in one place making it much easier for staff to track down whatever it is they need. An ERP system can standardize all your critical data and enable insights you need to make more informed decisions that help the business save as much time and money as possible. Additionally, ERP systems provide advanced inventory management tools that enhance visibility and control over stock levels.
Note that centralizing your enterprise data is essential for using AI to drive many high-productivity transformations.
There are countless ways an ERP system can give a major boost to productivity.
Additionally, ERP systems integrate and enhance various business processes, including customer relationship management, customer service, personalized interactions, and streamlined communications.
Using your ERP, your employees now have powerful visibility into various aspects of your business. It enables faster and better decisions because managers have all the relevant context that can assist them. Visibility into the status of processes and data managed by other teams ultimately helps all teams and individual contributors do their jobs better. Your ERP eliminates the time and effort spent trying to simply find this information.
Additionally, ERP systems enhance supply chain visibility and efficiency, streamlining operations and optimizing overall supply chain processes.
Visibility into the way teams work together and what information they're looking at drives collaboration. When employees communicate more frequently and work together, the entire business benefits. Together, they may uncover duplicate work that can be eliminated or brainstorm better ways to take care of daily processes.
The beauty of leading ERP systems is that you can use the functionality you need now while leaving the door open to add more capabilities down the road. Your ERP will scale as your business grows.
Cloud ERP systems provide the most scalability, flexibility, and remote access. They run on remote servers, making it easy to add the extra resources needed to keep your ERP running smoothly. This reduces the work put on IT and eliminates the need to hire a team of technical experts.
Leading ERP systems are mobile-friendly, and users access cloud systems through the web to access dashboards, reports, and other information they need to see in a mobile browser or using a mobile app. Mobile is essential when you have workers in the field or employees who travel frequently and must be able to see an up-to-date view of their business from devices other than a computer. These employees can also take care of critical tasks like approvals and monitoring cash flow (AR and AP) when they have a mobile-friendly ERP solution.
The most convincing reason to buy an ERP system is that it lowers overall costs, often in a big way. The automations we've already discussed can reduce or even wipe out many administrative and operational costs. Manual data entry or processes that require long paper trails, for instance, are often eliminated with ERP software.
The ability to monitor the status and transactions of your organization in one system means you can quickly identify the source of higher expenses and take action to reduce costs. ERP system visibility should prevent rush orders, over-production, or over-ordering, all of which can drive up costs. There are many ways an ERP system can reduce your costs to drive a fast ROI.
As you go through your ERP implementation, it's a good idea to work with an expert on your ERP to evaluate processes and determine if there's a better way to complete that task in the new system. ERP systems enable digital transformation by cutting out process steps and making other improvements to make it faster and easier to get things done.
An ERP standardizes data, and it also standardizes workflows. An ERP system should eradicate discrepancies across work teams and departments, ensuring everyone is following the same best practices.
Reporting is one of the biggest and most immediate benefits of using an ERP system, using the ability to customize reporting across all functions — finance, inventory, orders, procurement, sales and marketing, HR, and more. Your ERP solution can calculate and display all your Key Performance Indicators to help you understand what's driving the business forward and what's holding it back.
It's essential that your reports reflect the latest data, and that's why real-time availability is so important. For example, if revenue totals update in real-time, as each sale happens, you can immediately use it to inform decision-making. This has become critical in today's fast-paced, hyper-competitive environment.
An ERP solution increases efficiency across your organization since it touches every area of your business. Processes become less time-intensive, which often benefits not just the company, but customers as well. That can reduce operating costs in a big way and generate higher profits.
Your company is competing with other businesses for the same customers. That's why your customer experience is so crucial, and it is shaped by the level of customer service a company can provide. An ERP helps companies step up their service level because it puts all customer information, from contact details to order history to support cases, in one place. That facilitates faster solutions and a more personalized experience when customers do need assistance.
Your ERP system can provide more accurate inventory and order information to ensure your customers will almost always receive the right items at the right time, creating loyalty and repeat purchases.
Having accurate, up-to-date records that are easy to find and searchable will reduce the work required to comply with any regulations your company must adhere to. Customizable reporting tools within the software also make it far easier to track compliance and adjust as necessary and even support specific financial standards like GAAP or regulations like the Sarbanes-Oxley Act (SOX). The best ERP solutions will also update to reflect any changes to these regulations, so you remain compliant.
ERP platforms' flexibility allows users to tailor the system to meet their specific requirements, like unique processes or uncommon metrics. This ability to satisfy your exact requirements is the same reason ERP systems can be complex, but one is not really possible without the other.
This flexibility is especially important as your business evolves and grows over time. Your workflows and KPIs will change over time, and ERP flexibility means the system can still work for your business — there's no need to replace it.
Your business forecasts use a wide range of historical data and sometimes other inputs to predict future demand, revenue, expenses, and other numbers. Forecasts are much more accurate once you're running an ERP system because they're based on more accurate and comprehensive information since all that data is now in one place. Ultimately, better forecasts can help organizations both make more money (by having all the necessary resources available), and lower costs (by not overspending in the wrong places).
Thousands of companies have proven that their ERP system unifies all their company departments and their information on a single system. The benefits are realized as exceptional financial outcomes, and many companies have scaled and grown their businesses significantly using their ERP system.
