Even in these days of tech-driven insights and hybrid working patterns, some businesses are still relying on pen and paper, spreadsheets and filing cabinets for essential corporate processes and information. Consider for a moment the security implications of that, the time lost to finding information and getting it to the right people and the risk to the bottom line: this surely can’t be the best way to run a business in today’s world.
It’s not. And that’s where an ERP system comes in.
ERP, or Enterprise Resource Planning, is the term generally given to an integrated suite of business applications. It’s the software and systems used to drive the business, from finance to operations, supply chain to production, and everywhere in between.
Far from the clunky glorified finance systems of the early days, the modern ERP is, quite simply, the driving force behind successful businesses, a way to gain real-time insights and connect internal operations with business partners and other stakeholders seamlessly. Well-implemented and well-utilised ERP systems add bottom-line value to the business.
What is an Enterprise Resource Planning (ERP) system?
Today’s ERP solutions – also called systems, ecosystems or suites – are the system of record for the organisation, a single source of truth helping staff to efficiently manage multiple processes within a single integrated system.
“ERP tools share a common process and data model, covering broad and deep operational end-to-end processes, such as those found in finance, HR, distribution, manufacturing, service and the supply chain,” explains Gartner. “ERP applications automate and support a range of administrative and operational business processes across multiple industries, including line of business, customer-facing, administrative and the asset management aspects of an enterprise.”
Why does my business need an ERP System?
The connectivity and integration of ERP systems bring companies the benefits of collaboration, agility and speed, helping to grow competitive advantage.
Productivity and efficiency
ERP suites tie together a whole range of business processes, enabling a better flow of data between them. This can then be used to interrogate the business’s end-to-end processes to identify gaps, areas for improvement, and potential efficiencies and enhancements to be gained to drive business growth.
That shared data set, and working collaboratively from a shared workspace, enables deeper insights to be gained. Instead of working in a silo, each department contributes to the bigger picture in a way that can be easily accessed by those with designated access, both on-site and remotely. With in-depth insights, you can better define your goals, identify business needs, and plan business growth – even into new territories.
A consistent infrastructure across both the front and back office – for instance, Sales and Customer Services at the ‘front’ and Purchasing, Production, Dispatch and Finance at the ‘back’ – with all business activities operating from the same system, enhances both efficiency and collaboration possibilities. It also helps to mitigate risk, as the shared data means business decisions are being made from the most accurate and up-to-date information available to everyone involved.
Simplified information technology (IT) infrastructure
Working within an ecosystem of Enterprise Resource Planning software also simplifies the IT infrastructure, making it easier and more straightforward to maintain, support and upgrade when the time comes – saving time and money for the teams working with the Chiefs of Innovation, Technology and Finance (CIO, CTO and CFO).
Improved business agility and mitigating risks
All of this works together to provide greater flexibility and agility across the business, with real-time insights empowering quick changes, speedy decisions and the ability to spot potential challenges before they become big issues. By connecting processes and data, businesses can gain more visibility and flexibility, helping them to deliver more value across the business.
How does ERP Work?
Consider the ERP ecosystem as the central nervous system of your business. Each part of the enterprise resourcing planning suite typically focuses on one single business process or area, but each of those parts shares a data suite to meet the company’s needs.
The system’s modules work together to provide:
- Automation of essential and repetitive tasks, freeing up your staff to spend more time on value-added work instead of running reports
- Integration of different parts of your business, to make sure each department is talking to each other and working from the same information
- Better intelligence through real-time data, shared assets and collaborative working.
When procuring an ERP system, companies can choose the modules that best suit their own operations and can scale and grow as needed – as long as they have the budget and the right partner to work with. It is ill-advised to tinker with the code of an ERP system in-house!
ERP software is typically available as either a cloud subscription model or through a licensing arrangement with the software installed on your own servers and accessed remotely by the designated users. Each option still enables collaborative working and a shared real-time data set.
Finding the right ERP for your business
With all of this said, not every Enterprise Resource Planning system is built equally; without doing your research and due diligence, or without the right level of investment in software, professional implementation and training and ongoing support, you could end up with a system that does not aide the business but hampers the visibility and collaboration that should make it an asset, not a liability.
For medium-sized businesses looking for faster, simpler and more flexible financial, supply chain and production management, we recommend reviewing the great benefits of a company-wide implementation of the Sage X3 ERP system.
Sage X3 works to simplify your business across three main areas.
- Financial management: Control your bottom line and handle budgets and accounting needs within the Sage X3 ERP system. Monitor your assets and gain actionable insights to gain better efficiency and increase collaboration through shared workspaces.
- Production management: Get to market quickly and efficiently by managing all manufacturing processes within the Sage X3 ERP platform. Be empowered to prioritise, track, and manage all aspects of production and gain efficiency on the shop floor while keeping quality high with complete product traceability.
- Supply chain management: Ensure optimal efficiency through real-time monitoring of inventory status. Manage suppliers, optimise stock, accelerate sales, and satisfy your customers all within the one collaborative workspace, and access real-time data on the go.
What To Consider Before You Invest
This is a slice of corporate investment that is growing quickly: according to G2, the global ERP software market is projected to reach US$78.40 billion by 2026.
Yes, a new ERP suite does not come free; this is a sizeable investment and will no doubt require a whole range of business cases and approvals before you can press the ‘go’ button. There are considerations needed in respect of change management, resourcing and budget. And an appreciation that done correctly, the implementation of a successful ERP solution generally takes several months. So, you’ll need to carefully consider if it’s the right time for you to invest in a new enterprise resource planning system or even just to upgrade your existing one.
It’s advisable to work with a dedicated partner on the implementation, someone who can get to know your business needs to configure the system for your business – not some generic model – and support the solution post-go-live. Partnering with an implementation and support provider can help to make sure your ERP solution not only meets your current needs but prepares a solid foundation for the future, too.
Download our ERP selection checklist to help guide you in selecting the right ERP system with the right functionality.