Many modern businesses have planned for their own digital transformations, if they haven’t already begun the transition. Today, businesses are encouraged to maximize various technologies, from artificial intelligence and machine learning to their own enterprise resource planning (ERP) system, to remain competitive and relevant in their specific industries.
These digital transformations are necessary for companies to become more efficient and reduce the risk of being bogged down by redundant information or non-transparent internal processes. The goal is to use digital modernization technologies as tools for gaining valuable insights, detecting discrepancies in data or processes, and driving innovation within a company.
Arguably, one of the most important technologies for companies in the food and beverage, retail, manufacturing, or ecommerce sectors to consider is an ERP system. This type of software allows organizations to automate and manage various core processes, including inventory management and accounting, on a single platform. The ERP allows management, staff, and other authorized users to make better executive decisions based on updated data and complete transparency with regard to the ins and outs of their supply chain.
What exactly is the importance of an ERP system in the digital modernization of businesses like yours, and which ERP features will be essential in your upcoming transformation? Below is a guide to help you better understand the role of ERPs.
Why Do Companies Need ERP Systems?
Business owners and upper management all need a bird’s eye view on their company data and the status of all the different operations they oversee in order to make the best decisions. Making these judgment calls is much easier, as well as better tailored to the business’s needs and situation, if decision-makers in a company have a tool that sets a strong foundation for data collection and data processing.
Almost every business that employs multiple staff and oversees multiple operations, regardless of its size and industry, can embrace digital transformation with a comprehensive ERP cloud solution. This integrated management software supports various business processes and applications, which helps businesses maintain real-time agility when planning, budgeting, forecasting, and reporting on the organization’s business processes and needs.
No two ERP systems work the same way, and one solution may work better for a certain type of business than another. That being said, if the right ERP system is chosen by a company, it will contribute a lot towards managing multiple business processes and making sure they integrate with each other.
The Most Practical Uses of an ERP System
To gain a better understanding of how exactly an ERP system can drive your company’s digital modernization, below are five use cases that can be applied to your organization:
ERPs were originally used in the manufacturing sector to track specific checkpoints within the supply chain. Today, this feature still holds incredible benefits for companies outside of manufacturing that need a more comprehensive overview of their inventory. Some examples include companies operating within the retail or supermarket industry.
With an ERP system, clients are able to receive real-time updates on inventory levels and the locations of stocks that are on their way to a warehouse or a specific branch. If you’re using an ERP, it may also remind you when stocks are low and prompt you to place additional purchase orders in a timely manner.
Managing Purchase Orders
An ERP system can automate requests for quotes and store all responses in a single database. Not only does this reduce the time spent on manually sending out quotes, comparing them, and communicating with the winning bidder, but it also removes the risk of human error for something as crucial as purchasing. With an ERP at your disposal, it won’t be long before you’re able to improve your purchasing operations and save a significant amount of money from avoiding costly errors.
Accounting and Financial Management
Your ERP can also be configured to include various financial management features, including bookkeeping options. While you’ll still need actual financial professionals to look over your data, having an ERP system record, compile, and consolidate all your financial information can make the processes of accounting and financial housekeeping so much easier on your company.
For one, you’ll be better at managing your cash flow and spending. For another, you’ll be able to flag potential errors or fraud caused by multiple similar entries or missing data, which wouldn’t be as easy to do if you depended on a manual system with disparate files.
Improving Customer Relations
An ERP system can be also integrated with your current customer relationship management (CRM) module. This will allow you to get a better look at customer data, such as which of your products are the most popular within a certain demographic, which items are more challenging to sell and receive a lot of negative reviews, and even which products or services of yours are influenced by seasonal demands. By gaining access to this data, you can make better decisions about your company’s services in ways that will please your customers and keep them loyal to your brand.
Human Resource Management (HRM)
Newer ERP systems now include HRM modules, like for tracking attendance and payroll payouts. Depending on your specific solution, you can program your ERP to auto-generate paychecks every two weeks or every month so that salaries are distributed on time, every time. Some ERP systems can also store employee data, such as their government forms and tax documents. This makes it easier for you to review important information about each employee during their annual performance reviews or whenever else you need them.
Final Thoughts: Digital Modernization Is About Accuracy and Speed
If the goal is growth, it’s essential for companies to act quickly and accurately in the fulfillment of their business objectives. Today, brands must be quick on their feet to boost productivity, maintain high-quality output, and execute good decisions. Among the best ways to accomplish all these is by embracing digital transformation and modernization, especially in the form of technologies like ERPs. Adopting an ERP may improve upon your existing strategies for running your company and significantly change the way you conduct business and provide value to your clients.
An ERP system will offer multiple benefits to any well-laid-out digital transformation strategy. By making the proactive decision to integrate an ERP system into your business, you’ll tighten your operational efficiency, cut down on redundant costs, and strengthen your customer experience journey—all of which you’ll need to do to if you want your company to thrive in the modern era.