The digital transformation of business is firmly underway in today’s dynamic global markets, because decision-makers know that getting this right drives sustained success. But transformation is easier said than done, as organisational complexity, outdated systems, and process bottlenecks challenge business leaders trying to convert to digital-first principles.
Overcoming these challenges is where enterprise resource planning – or ERP – comes in. But what does ERP mean?
ERP refers to a digital system that consolidates data from an organisation’s various functions, linking them to a single data source. Across industries and companies of varying sizes, ERP solutions allow leaders to boost process efficiency, optimise the allocation of resources, and make more informed decisions. As a result, ERP systems have become integral to managing functions from resource planning to supply chain management, marketing, and finance.
And businesses are keenly aware of its potential impact. According to Mordor Intelligence, the global market for ERP solutions topped US $39.11 billion in 2020, and is expected to reach $61.97 billion by 2026, for a compound annual growth rate of 7.52 percent.
How does ERP work?
ERP systems enable information to flow digitally between multiple functions and a central database. This structure provides one digitally-driven source of truth, reducing errors and duplicate data, connecting processes and departments, and offering real-time visibility across an enterprise. As a result, business leaders can identify opportunities for improvements in all areas of their organisation and make more informed decisions.
ERP solutions also can automate manual, repetitive tasks, like invoicing or order processing, which frees employees’ time for more value-added work.
Understanding ERP Software
Initially, ERP systems tended to involve lengthy, expensive implementations. As a result, they were used almost exclusively by the very largest companies. Today, as a growing number of ERP solutions are offered on a software-as-a-service basis, they’ve become more accessible to a wider range of companies.
Once ERP software has been implemented, many departments can leverage its capabilities. For instance, ERP systems can automate numerous tasks in finance and accounting, such as preparing financial reports or tax returns, boosting efficiency and minimising the errors likely with manual processes. They also can provide an audit trail, helping to ensure policies, procedures and regulations are consistently followed. ERP systems can also help supply chain operations boost performance by tracking inbound inventory and outbound shipments, among other functions.
Similarly, ERP platforms have applications across almost any industry. Retailers can use them to connect their physical and digital stores, providing customers with a seamless, accurate shopping experience, while allowing management a comprehensive view of operations. Manufacturers might leverage ERP solutions to manage inventory and plan production, boosting efficiency while meeting customers’ requirements.
Given the increasingly widespread deployment of ERP solutions in many enterprises of all types, it’s becoming essential that employees understand how they operate and what they’re capable of. It also helps to have an understanding of some of the different platforms on the market:
- Infor SunSystems: This financial management software provides visibility to all facets of a business, while its unified ledger converts financial information into actionable insight and facilitates compliance with regulatory and reporting requirements. Automated data entry streamlines functions like invoice processing. The system is available in multiple currencies and languages and can address multiple reporting regimes.
- Microsoft Dynamics 365: This customisable portfolio of intelligent business applications licensed through Microsoft delivers operational excellence and promotes more engaging customer experiences. Organisations of all sizes and types can connect Dynamics 365 applications with the systems they’re already using to create customised ERP (Enterprise Resource Planning), or CRM (Customer Relationship Management) functions.
- Oracle NetSuite: Oracle NetSuite is used across the globe and remains a top cloud ERP solution, offering companies one system that encompasses their entire organisation. Since 2011, nearly two-thirds of technology IPO companies have been NetSuite customers. NetSuite automates processes and provides real-time visibility, simplifying operations and enabling more informed decisions.
- SAP Business One: Also known as SAP B1, this ERP software offers an affordable, comprehensive solution geared to small- and medium-sized businesses, enabling them to manage everything from accounting to inventory to customer relationships and more. This solution, which is used by 60,000 customers around the world, can be launched in days or weeks.
- SAP S/4HANA: SAP’s flagship ERP software is powered by artificial intelligence and analytics to help enterprises, no matter their industry or location, run mission-critical operations. The personalised insight it offers enhances decision-making while intelligent process automation across end-to-end business processes allows companies to operate as one enterprise.
- Unit 4 Financials: Formerly CODA Financials, Unit 4 ERP Financial Management software is geared to helping service-centric organisations drive productivity, resilience, and adaptability. By providing a comprehensive overview of the organisation’s finances, from planning to transaction processing to reporting, Unit4 helps them quickly and cost-effectively adjust to change.
- Workday: The Workday system combines best-in-class finance and human resource applications within one powerful system. Its intelligent data core seamlessly connects financial and people data, providing the insight and agility business leaders need to identify optimal moves. The platform is open, extensible, and configurable, enabling companies to quickly adapt to changing markets.
Across departments and companies, the benefits of ERP solutions include greater efficiency as businesses processes are streamlined and defined, reduced costs due to automation and visibility into inefficiencies, and an enhanced ability to identify both areas needing improvement and opportunities for greater profit. In addition, ERP solutions often drive more informed decisions, as they can provide updated, holistic, and yet detailed views of operations. They can enhance agility, as the real-time insights revealed by ERP systems can enable organisations to rapidly identify and react to opportunities and challenges.
Many businesses, no matter their size or the industry in which they compete, can benefit from the visibility, agility, and efficiencies ERP solutions can unlock.
How do you know if it’s time to consider an ERP system? If your current processes, whether manual, spreadsheets, or a conglomeration of varying systems, have become unwieldy and no longer provide effective support for your business, it’s likely time to consider one.