An ERP system , also known as the “Enterprise Resource Planning System”, aims to simplify processes and improve information management to produce and sell more.At present, ERPs are indispensable in the management of multiple business processes and favor access to essential business information. The main reasons to implement an ERP system in your business is to improve the management of your company and business processes.
But, is an ERP system really necessary in your SME? Can you take advantage of it when it comes to improving the management of your company?
What Is An ERP?
An ERP ( Enterprise Resource Planning ) is a business resource planning system that is characterized by automating many of the processes and procedures a company has.
In reality, there are currently a lot of ERP systems on the market , which adapt to the needs of different companies, whatever their size and sector. In this sense, it is worth getting informed to choose the one that is most comfortable for us. It should be noted that there are also ERP systems based on free software, which are usually cheaper or even free for your activity. But how can they all improve the management of a small or medium-sized company?
How ERP Helps To Improve The Management Of Your SME:
The main reasons to implement an ERP system in your business are:
- Get quick access to information.
- Data updated at all times.
- Customer Relationship Improvement.
- Increased competitiveness.
Access to real-time information:
Imagine you have a shoe store. And that shoe store has two different stores, each with a small warehouse. In each of those stores, you will have shoes of sizes and models that will not be in the other. What if a customer asks you in store A for a model that doesn’t exist, but that you do have in store B? What do you do? Are you running to check the other store? No. Actually, if you have an ERP system, you could look at the computer and solve the problem.
Data updated at all times:
Before having an ERP system, it is likely that you kept all orders, invoices and paper receipts. With them you could, for example, make decisions to make purchases in the following season. And if it turns out that part of those documents are missing or that they are not as up-to-date as they should? Will you be making the right decision? By implementing a business resource planning system, you will have all the information at hand and make sure you check the entire period that interests you without missing documents.
Customer Relationship Improvement:
An ERP system can also be used to manage customer data. In fact, you can create a personalized file for each of them with which you can track your purchases and anticipate their actions. You will improve the relationship with the customer, you will be able to surprise him and you will have more possibilities to increase your sales.
If in the shoe store in our example there are missing pairs of shoes that you know that, for the season you are in, they will sell well, you could anticipate the purchase of replacement merchandise. In this way, you would not run out of the flagship product ahead of time. In that sense, an ERP system can help you maintain a correct stock, to be more competitive in terms of available models that the public is looking for.
In addition, it is worth mentioning the reasons why your company should use an ERP,What are the reasons to incorporate it into your business?
- ERP systems allow you to automate many of the functional areas of a business: administration, production, general management, finance and accounting, etc.
- Thanks to the ERP, the company will make better decisions due to the centralization of information in its different areas. You will have this information in real time, which will allow you to plan future actions that can benefit the business.
- An ERP software helps improve employee productivity. Optimizing the processes allows an improvement over the control of purchases, sales and orders, thus achieving a reduction in the time of operations and financial cycles.
- The traceability and control offered by an ERP allows you to track all production processes, from obtaining the raw material to the manufacture of the item and subsequent sale to the customer.
- An ERP solution improves communication between departments as they all access the same database that is updated in real time.
- It allows to manage in a more efficient way the economic resources of the company by having all the integrated information and the historical of the operations carried out, thus adjusting the inventory stocks.
- Installing an ERP system improves information security thanks to the roles acquired by each user who connects to the system. The user works only with the information that an administrator has previously defined in his profile, being restricted the one that is not necessary. The result is the prevention of theft or loss of data.
- An ERP is adaptable and scalable, since it is made up of modules that adapt to the needs of any company based on its evolution.
- The ERP helps improve costs and achieve greater competitiveness. Reducing the number of errors and duplicate tasks reduces costs. This will help increase the profit margin and reduce the price of each product.
- With an ERP program , different tools or programs can be integrated, such as an online store or a mobile App. Thanks to this functionality, the company will avoid managing several platforms.
Implementing an ERP system in your SME does not have to be a complex task. You need to choose the one that best suits your needs and learn how to use it. At the beginning, it may be necessary to invest a lot of time in the implementation, but once you have everything ready, you will notice the difference compared to the management you did without it. It will improve productivity, competitiveness and also sales.
The numerous advantages offered by ERP are evident, which become a great ally when it comes to managing our business. The unification of the information and the processes of the different departments in the same system is an efficient management method that will allow us a boost towards digital transformation.