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. This facilitates flow of real-time information across departments and empowers 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.
of processing has gone up manifolds
of processing has gone up manifolds
Though 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 ERP systems too. Modern day ERP solutions 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 ERP solutions 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 are the components of an ERP?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:
Formulation, BOM, R&D
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 ERP software 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 ERP solutions 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 benefits of an ERP 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.