As of 2018, the ERP software market was valued at $35.81 billion. This number was projected to grow up to $78.40 billion by 2026; growing at a rate of 10.2% each year. This year by year rise is proof of today’s digital transformation, where businesses are looking for any technological advantage over their competitors. Today, companies can’t afford to skip out on the automation, integration, and efficiencies offered by a fully integrated ERP system.
Enterprise resource planning software is an integrated suite of business applications designed to automate the back-office functions of your organization, including financials, sales, and operations. In other words, ERP is a unified solution that manages company operations across every department, whether it’s raw materials for manufacturing or staffing hours for human resources.
Read More: What is ERP and How Do ERP Systems Work?
If you’re looking to implement an ERP or even upgrade your existing system, it’s important to understand the benefits of ERP first and foremost. This can help provide you with the real-time visibility into what your business needs, what you can afford, and what you can realistically implement into your environment.
Looking for an ERP system for your organization? Check out our list of the best ERP software. Or get free help from one of our software advisors.
ERP solutions allow organizations to streamline and automate their processes, which can lead to higher accuracy in your order taking and more efficiency in your overall operations. The importance of ERP comes from the complete visibility ERP provides–meaning your resources will be tracked and reported on to determine which areas of your business operation are falling short. This means you’ll have an information system working for you–without needing to expand your IT staff.
How is this possible? ERP software makes your business functions more agile. With an ever-shifting market, customers’ needs are always changing. Being able to implement software on a modular basis (in order to handle current needs immediately and plan for future needs later) is known as a phased rollout–flexibility many ERP systems offer.
Whether you’re a small business owner just starting out, or a capable enterprise looking to fine-tune your business processes, your business can benefit from an ERP software. You may notice business picking up or your customer base expanding, which leads to an increase in work volume, hiring more people, and developing a broader range of products. This complexity may overwhelm a business that is unprepared, meaning you’ll need to be pragmatic at rolling out your ERP system as to not hinder your business.
A few more reasons why a business may look to purchase ERP software:
ERP solutions can be customized based on the industry you’re in or on the primary features you’re in need of. Some software will be developed with a specific industry or set of functionalities in mind. Others will be more generic and require an ERP vendor who has experience inserting the solution into your environment.
Financial management capabilities are at the forefront of an ERP implementation. Modules such as accounts payable, accounts receivable, and a general ledger will help track revenue and expenses. This may also include payroll for your organization.
CRM software is often sold on its own, but ERP software can offer many capabilities to aid in customer relations. These key applications support the sales and marketing staff and address the needs for contact management, tracking conversation history, managing leads, reviewing order histories, and creating quotes.
ERP software will also control the workforce of your organization via human capital management features. The management of your new and current employees will aid in your hiring process and maintaining good relationships with your staff. This includes employee onboarding, time and attendance tracking, and benefits management.
An inventory management module within an ERP system will help track all information about the items that your company builds, buys, stores, or sells. Inventory management software simplifies pricing products and helps maintain the most effective stock levels. Having inventory integrated with other ERP applications will reduce stock level requirements and lower warehousing costs based on a better understanding of your stock movement.
Manufacturers and distributors are some of the most prominent businesses that use ERP software on a daily basis. This can be attributed to the need to improve the logistics involved with acquiring their raw materials and delivering a finished product to a customer. A supply chain management suite will manage the flow of goods and services between locations as efficiently and cost-effectively as possible.
ERP will help streamline workflows so all of your business processes are in one place. This should lead to a business with increased productivity. When all of your data is available in a single platform, you’ll eliminate the need to use separate unconnected programs, or document sharing with excel spreadsheets. Housing all of your data in one place will also improve the collaboration between employees, leading to better communication during critical projects.
ERP software will also provide better financial planning by allowing analytics tools to review historical and real-time financial data. This will aid in informed decision making and help break down your business by region, location, profit center, or even by employee.
Rather than having your company financials and sales data split across multiple systems, a unified single system will also improve data security and accessibility. A centralized repository will let you monitor day-to-day processes for continuous improvement. This will overall lead to improved communication between multiple departments who may rely on each other to complete orders.
While many ERP systems exist, not all may work the way you anticipated. Before you go forward with an ERP implementation, you’ll want to find out what your business needs and what you care the most about. The following is a brief collection of ERP solutions that we’ve helped visitors review over the years.