Managing a growing business while managing its workforce is not an easy feat. In the modern day, each organization faces the same challenge: they need to be highly competitive, but also remain flexible at the same time. They are required to effectively manage and plan their day-to-day activities, business strategies and future planning. With all the complexities, there needs to be a tech solution that allows businesses to store and access information on a single platform. Cloud ERP system is the answer to that need.
ERP system functions to simplify various activities in various aspects within a business. The tool helps standardize and integrate all departments within the company, such as finance, human resources, marketing, procurement, and others. ERP can automate end-to-end data input in real-time, thus saving valuable time and efforts. This allows business leaders to make better, timelier decisions, syncing the machine tools, people, and software systems in a big, data-based ecosystem.
Growing digitization and advancements in technologies have made ERP software markets garnering significant global traction. According to Market Research Future (MRFR), the global ERP software market size is projected to reach USD 66,389.7 million by 2026. ERP system has been a core part of the industrial revolution, industry 4.0, and now the advent of industry 5.0. With most manufacturing facilities already poised to embrace industry 4.0 regulations, ERP solutions are expected to have a significant fortune.
What is ERP
ERP stands for Enterprise Resource Planning. It is a software that functions to manage and integrate a business’ resources, information and day-to-day activities. Historically, the ERP system was mostly used by large-scale companies (enterprise), but nowadays many smaller-size companies are also taking advantage of it. ERP plays as a central system that holds the major details of the business operations together. It can help in automating transactions, avoid duplicate records and maintain proper flow of movement over the business.
Integration and automation are keywords in ERP. When all of the important parts of business are centralized and integrated into one system, it becomes easier to run. ERP software offers synchronized automation and reporting, which allows for a smoother business operation and execution.
Each company has its own needs and goals, therefore the components of an ERP system can be adjusted and are dependent on what a business requires. However, there are key features that each ERP solution should include. For example, an ERP system should be automated to reduce errors. They also need to be flexible, thus allowing for modifications as the company changes or grows. Additionally, as the world is going mobile, today’s ERP platform should allow users to access the data from their mobile devices. o
What are the benefits?
Make it easier to carry out operational activities
Companies can manage a number of tasks from several departments under one system, such as for finance, HR, purchasing, manufacturing, and distribution. One system capable of spanning multiple jobs can help a company achieve operational excellence.
When an information is entered into the ERP system, the system will distribute the information to all departments that need such data. This will eliminate the case of repetitive information, thus reducing data errors.
Reduce operating costs
SInce ERP can centralize different business processes, the company can control the costs of marketing, inventory, production and others.
Provide data and information real time
It is vital for businesses to get real-time data and information because accurate business reports will help leaders make the best decisions for the future of the business. ERP solutions can facilitate these needs.
Make happier customers
Most ERPs are equipped with a customer relationship management (CRM) tool or can be easily integrated with one. With an ERP, your CRM has access to data across business functions that enables the team to see customers’ wants and needs better.
Deployment options: On-premise vs Cloud ERP System
When you have decided to invest in ERP, the next question would be: which one?
Selecting an ERP solution that fits business needs can be complex work, especially with the many options to choose from. Among the most critical decisions in selecting an ERP software is whether to host it on-premise or in the cloud.
As the name suggests, the main difference between on-premise and cloud ERP systems lies in how the system is deployed, either installed locally or through software hosted on a vendor’s servers. On-premise solution utilizes on-site servers at a company’s location, with an ERP vendor working with the business to install, implement and maintain the ERP system solution. This means that the company will have full control over data, functionalities and security. Meanwhile, cloud ERP is a version of the software that requires a subscription fee and is internet accessible without having to install the physical server at the company’s location. This type of deployment provides unlimited scalability and a decreased need for IT resources.
While installing on-premise ERP solutions has always been the norm, more small or midsize businesses are moving to the cloud ERP system as it offers stability while keeping the costs low.
What industries can adopt ERP?
ERP was historically designed for the manufacturing industry, but now the software has expanded to various other sectors such as:
- Services & Consulting
- Retail, Wholesale & SuperMarket
- Real Estate
- Construction, Projects & Infrastructure Development
- Food & Beverage
- Tourism & Hospitality
- Export – Import
Signs that your business need to invest in ERP
There is a wide misconception that an ERP system can only be used for global or large-scale enterprises only. The truth is, no matter the business size, your business can take full advantage of an ERP system as per the needs of the organization. Now, here’s how to tell that it is time for your business to invest in cloud ERP system:
The business is growing
As the business is expanding, the challenges in managing various departments at the same time is increasing. This is when the ERP system comes to the rescue. Cloud-based ERP improves efficiency and leverages resources available for your business. It provides unlimited storage space, development and customization features.
Difficulty in making informed decisions
ERP is more than just collecting data and keeping records. Businesses can use it for analysis and improvements. An integrated cloud ERP system can bring together data from multiple platforms and analyse, helping to identify the competent areas and improve business performance. With the right analytical tools, data saved in your system can be read to inform better decision-making, identify emerging trends, spot new opportunities and more.
There are inefficiencies in current processes
Any form of inefficiency can cost a company’s bottom line. You might want to see how your operations, applications, and processes can be optimized and more efficiently utilized through an ERP system. With the platform, managers can see things such as inventory levels, production/engineering reports, and other processes more clearly and quickly.
Clients are complaining
You may have missed sending out products to the clients in the time promised, or skipped making payments to the vendor before the deadline. All of these problems happen due to the absence of integration between systems. When the business operations and the customer management along with the supply chain and procurement are accessed under the same roof, it can bring all these issues to a stop and help the employees focus on more important things.
Want to Improve Data Security
Cloud ERP system helps protect your company from cyber attacks that threaten your reputation as well as your business. Because your ERP system is a single integrated system, data access and management can become more secure and overall security is easier to maintain. With selected access, password encryption, and third-party, supplier, and vendor monitoring, the data safety can be managed smoothly.
The benefits of using a cloud ERP system are countless and have incredible effects on your business productivity and efficiency. Companies that have invested in this software have seen reduced operating costs, improvement in timely delivery and improvement in inventory turnout.
If you haven’t switched to a cloud-based ERP, maybe it is time to consider adopting it!