What is ERP software?
Managing a business is a challenging task. To manage a business effectively, a lot of technology-based applications have been introduced. Each of them has its own significance. However, Enterprise Resource Planning or ERP is the software used for business process management, which is typically a set of integrated applications for the collection, storage, management as well as interpretation of data from several business activities. This is applicable to day-to-day business activities like procurement, accounting, and project management as well as manufacturing.
Different types of ERP software:
Several ERP software till date can be found, among which some are very much popular due to their effectiveness in a large number of modules. The well known ERP software is the SAP, Oracle, Microsoft Dynamics, Netsuite, Infor, Epicor, Sage, RAMCO, Focus, etc. and many more. Each ERP has been created targeting some specific volume of business. Some of them targeted medium and large scale business, while others focused on the small to medium ones.
What are the different ERP modules?
The common ERP modules include production planning, inventory control, material purchasing and management, sales and distribution, accounting, marketing, finance and controlling, and human resource. However, in any business, a combination of the different types of modules is in use with the aim of managing all the back-office activities and tasks. Some of the ERP software focuses on covering all types of modules required for a business, while others are limited to only some of the modules.
Nowadays, ERP software is built with industry-specific modules. For example, the SAP software is built with industry-specific modules like SAP IS Retail, SAP IS Oil & Gas, SAP IS Banking, SAP IS Telecommunications, SAP IS-Utilities, etc. Among the other Enterprise Resource Planning software, Microsoft Dynamics ERP comprises of modules like Microsoft Dynamics GP, Microsoft Dynamics NAV, Microsoft Dynamics AX, Microsoft Dynamics CRM, etc.
The main focus of creating each of the ERP software is to operate each business with ease were analyzing the requirement of a business, analyzing the GAP (to know the business processes and working for better implementation of ERP), installation and final implementation steps are involved. The basic aim of the enterprise resource planning system utilization is to offer a single central repository that improves the flow of data through the organization.
What benefits an organization will get by using an ERP system? Using the system is advantageous for an organization. Would you like to know the advantages?
Well, here is an overview of the same.
- Accurate sales forecasting allows inventory optimization in ERP. This helps in building strategies to cope up with the inventory issues and realistic estimates.
- All orders starting from acceptance to fulfillment can be easily tracked. Every transaction is automated.
- Revenue generated in any business is also tracked. That means the entire revenue process is transparent. Also, cash to cash cycle time is reduced.
- ERP makes the whole process faster and increases efficiency. The time saved in the process can be utilized to focus on other areas of improvements.
- Inside the ERP platform, each team can collaborate with each other easily. Also, a remote team and the other teams in headquarters can work together through internet options within the ERP platform. This, in turn, enhances creativity and eases problem-solving. That means inter-organization collaboration and intra organization communication is increased.
- Using ERP helps in data security with a single data warehouse that enables tight monitoring and safekeeping of data.
- ERP helps in cost-cutting. When key metrics are closely observed, the delays, disruptions, and breakdowns can be anticipated well. In other words, it ensures better management of the impact. Troubleshooting options in case of technical problems diminish maintenance costs also.
- Operation flexibility is increased in ERP. Integrating existing apps to your system or options to add more ERP modules while growing your business are possible with this software.
- It also helps in standard naming or coding of the product.
- This system also ensures a high quality of customer services.
Future of next-generation business:
Being in a beneficial part of business, ERP became an indispensable ingredient for future business. Earlier ERP systems were too expensive and thus limited towards large businesses only. With the introduction of several types of ERP systems, small to medium businesses are also able to use the platform for multiple benefits. Cloud-based ERP solutions for smaller companies can result in the flexibility of adding new users as well as supporting changing business needs. In the case of small business, the ERP applications are customized according to the nature and requirement of the business. The facts interpret it clearly that enterprise resource planning systems in the present days are targeting the smaller businesses also. It is not very far when all types of small, medium and micro businesses have to incorporate an ERP system mandatorily. Several new deployment models are emerging these days in the form of cloud computing, hosting, SAAS, etc. It is also seen that the ERP upgrade is flattering a big business.
ERP has been influenced by computing trends and technological advancements. The new trends are:
Mobile ERP: Irrespective of the location of the executives and employees, they want real-time access to the information. Mobile ERP can be used for dashboard, key business processes, and reports.
Cloud ERP: Placing data in the cloud is a common practice among the technical geeks. The Cloud ERP software solutions are becoming obvious although many users are still hesitant to place any data in the cloud.
Social ERP: There is disagreement about integrating social media with ERP among many. According to the hype around social media and increased number of fan followers among vendors in integrating the ERP system with social media, it is a good attempt. However, many are contradicting this step.
Whatever the type of modules used for managing back end activities of an organization, ERP will be there in the future. The form and the name might be differently modified, upgraded and designed to meet the business requirements. Apart from the modules like distribution process management, facilitating better project planning, supply chain management, accounting, and financial applications, newer modules will be added into each ERP system. However, ERP will change with the change in business requirements. The trending movement in ERP is a number of users will shift to the Cloud. Till date, integration of ERP and Cloud computing is a matter of delay. The trend is equally applicable to small as well as medium scale businesses. The most beneficial part of this could ERP solutions, in-house infrastructure is not required and the small businesses can afford to access the system. Thus, it can be believed to be the best ERP software for small business in accordance with the present circumstances. This also ensures the need for upgrading to newer versions of the software without relying on the older versions. Instead of modifications, personalized ERP solutions will be the next-gen business requirements that help in cost cutting. The next-generation business using ERP solutions will focus more on customers.