ERP - Redefining the present and shaping the future of your business!

What is ERP all about?

If you own a business, you might have come across the word ERP more often than not. People in your fraternity talk about it on a fairly regular basis and it seems to you as if it is the single most important thing that your business needs in order to grow. It thus becomes important for you to know what an ERP is – in case you aren’t already aware – and what value does it add to your business.

What is ERP?

Enterprise Resource Planning, or simply an ERP, is a business management software which comes with a set of integrated applications that allow a business to collect, store, manage and interpret data from its different activities in real-time, thus enabling its overall smooth functioning. In simpler words, an ERP software helps integrate the different core processes of a business such as finance, supply chain, manufacturing, raw material procurement, marketing & sales, planning etc., into a single system. Thus facilitating flow of real-time information across departments and empowering data-driven and pro-active, accurate business decisions based on the real facts.

 

ERP actually helps organizations get rid of disparate systems and processes, taking form of a unified IT package, which gives the employees authorized access to the single-yet-shared database where data entered once can be used over and again. This eliminates data duplication, chances of errors, delays and manipulations and brings a degree of automation to the business. It also enables generation of synchronized reports on key business metrics, giving the required information at the time it is required and in the way it is required.

The modern face of ERP:

 

What is ERP?

Built with this basic purpose, the face of ERP has completely changed now. From elephant-like computer peripheral sizes and speed, to contemporary palm-sized lightning-fast computers, same evolution is witnessed by ERPs too. Modern day ERPs have embraced technological advancements allowing business control from anywhere and at any time via cloud, apart from being available on-premise. The availability of not just the industry-specific solutions, but micro-industry specific ones as well has drastically reduced the implementation time as well as the customization cost, while increasing the degree of fit in terms of processes and regulatory mandates.

 

Keeping pace with these improvements, more and more vendors are coming up with ERPs that are fit for small businesses too that are simple yet fast. For ex., SAP Business One, which was designed for big businesses, can now cater to smaller ones too. And, with the advent of HANA, simplicity and speed of processing has gone up manifolds. 

 

Moreover, the availability of online learning portals, e-courses, knowledge base and simplified workflows, have substantially curbed  the need for intensive training, which is one of the major concerns, fears and expenses for ERP adopters.

What are the types of ERP?

What is on-premise ERP
On-premise: A traditional ERP software, or on-premises ERP, has a database that resides on an onsite server and hardware. It is managed by the IT staff of the company which has got it implemented.
What is Cloud ERP?
Cloud: A Cloud ERP is provided as a service and hosted on vendor’s servers. In this case, the software and its data is managed centrally at a remote datacenter (internet "cloud") by the ERP vendor and accessed by customers through a Web browser.
What is Hybrid ERP
Hybrid: A hybrid ERP solution is the combination of the two ERPs – on-premise & cloud. By opting for a hybrid ERP, a company can adopt cloud applications while also retaining its on-site ERP resources. Greater mobility, ease of installation and outside support are some of the benefits that make businesses go for hybrid ERP.

What are an ERP’s components?

The key components of an ERP software are the multiple modules, with each of them focusing on one specific area of the business. These modules are individually purchased, based on the specific needs and technical capabilities of the organization. Some of the most common ERP modules include those for:
ERP Sales Module   Sales
ERP Production Module   Production
ERP Marketing Module   Marketing
ERP Quality Control/Assurance Module   Quality Control/Assurance
ERP Inventory Management Module   Inventory Management
ERP Accounting Module   Accounting
ERP Planning Module   Planning
ERP CRM Module   CRM
ERP Material Procurement Module   Material procurement
ERP Formulation, BOM, R&D Module   Formulation, BOM, R&D
ERP Finance Module   Finance
ERP Business Intelligence Module   Business intelligence

What all businesses need ERP?

What all Businesses need ERP

Any business, be it large-scale, small-scale or medium-sized, ranging from manufacturing to catering and whether discrete or process manufacturing, needs an ERP solution. This is because challenges of small/medium businesses are no different from large industries. They need to follow the same guidelines, abide by regulations, maintain reports & documents, meet quality parameters, manage resources, cut costs, thrive on thin profit margins et al, just like the big daddies of business. So, to standardize their processes, streamline operations, cut losses and wastage, stay audit-ready, exploit resources and improve profits, even macro, start-ups, small and medium industries are looking for an ERP partner.

 

The ERP systems were predominantly developed to manage discrete manufacturing processes which involved production of goods that are easily distinguishable and can be physically counted like nuts, bolts, wires, etc. Such ERPs were ideal for industries like automobiles, mobile phones, furniture, toys, etc.

 

However, with time, the need for software for process manufacturing was felt because process manufacturing is based on formulas/recipes and involves blending, mixing, heating, etc., which result in change of state. These different set of needs could not be fulfilled through a software built to follow production on assembly lines. Thus, dedicated ERPs for process manufacturing came into existence bringing about key capabilities like- Physical property analysis, formulation, unit of measure conversion, density calculations, batch processing, regulatory compliances, etc., among many.

 

Read our blog to know more about Process Vs Discrete manufacturing.

What are ERP's benefits to businesses?

An ERP software helps your business ensure numerous benefits, the first being automation. Check out the other advantages, apart from it, below:
  • Streamlined processes: An ERP system integrates all the processes across departments from beginning to end and meets the specific needs of each individual business.
  • Improved productivity & efficiency: An ERP system saves time and resources by automating manual business tasks and processes to promote productivity and improve efficiency. 82 percent* companies that implemented an ERP solution improved either key or all business processes post implementation.
  • Enhanced business visibility: With the integration of all the business processes, ERP gives management comprehensive and real-time visibility into performance of each department and access to key business data.
  • Quality analysis & reporting: An ERP software allows business managers to use interconnected dashboards to quickly analyze & report, thus facilitating informed and accurate decision making.
  • Reduced costs & risks: Uniform and streamlined business processes reduce the operational and management costs while improved data integrity and financial control reduce risks.
  • Industry & regulatory compliance: An ERP solution facilitates control over reporting processes and thus ensures compliance with regulatory requirements, meeting data integrity and enabling complete traceability, thereby keeping away hefty fines and image damage.

 

Studies reveal that 54 percent* of the organizations that got the ERP implementation done were very satisfied with the overall ERP vendor experience. Further, 57 percent* of the companies who got the ERP implementation done viewed it as a success. This should give you a clear picture as to how beneficial ERP is to the success of businesses.

What is future of ERP?

In last century, ERP has evolved a lot to accommodate latest technological trends as well as advanced tools to solve critical business problems. The ERP vendors continue to evolve in order to make their offering more powerful, flexible and affordable, all at the same time. Some of the contemporary trends that will define the future of ERP include Cloud Technology, big data analytics, the internet of things, artificial Intelligence, mobility integration with e-Commerce and move towards public cloud. These trends will continue to make the businesses simpler.

 

And in all these years, the unprecedented response it has received and the faith which the clients across the globe have reposed in it tells that ERP is here to stay for many more years to come.

 

 

 

*Stats courtesy: Panorama Consulting's 2016 ERP report
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