What Are the Primary Business Benefits of an ERP System?

Gone are the days when businesses could sustain and flourish without a robust ERP system setup!

These days, in this fast-paced world, if you have to compete with others in the marketplace and stand out as a winner, you can’t take chances.

Whether it is about operational efficiency or creating a memorable experience for your customers, setting up an ERP system for your small business is the only way to succeed.

Oftentimes, small businesses just like yours shy away from setting up ERP software solutions due to a lack of awareness and limited access to valuable information.

In this blog, we’ll be talking all about ERP systems, their different types, and how you can also benefit by setting up a new ERP system for your business. Read till the very end to grab all information and take an informed decision.

What is an ERP System?

Enterprise Resource Planning or ERP is a software solution that is designed to help companies automate business processes and integrate them into a single system.

In other words, ERP software is an end-to-end solution that is available in the form of a fully-integrated suite of services including but not limited to supply chain management, customer relationship management, finance management, people management, and inventory management.

In order to do this, the ERP systems focus on centralizing all business data to enable single-point management for all business activities.

The end goal of implementing an ERP system is to help the business automate its operations and routine tasks. This enables the businesses to spend on hiring manpower for other tasks that directly impact the business growth.

What Are the Different Types of ERP Systems?

ERP systems can be categorized into 3 different types based on the server they are hosted at:

On-Premise ERP:

This ERP setup is installed and maintained on the organization’s servers.

It is mostly used by large companies that require customized features and prefer to have full control of the ERP system.

For the setup of this new ERP system, the company has to bear the expenses of hiring specialized IT executives and purchasing high-end servers. The business also has to pay to maintain the ERP software, keep all data secure, and take regular backups.

Cloud-Based ERP:

This type of ERP software is hosted on a cloud server and can be accessed over the internet from anywhere across the globe.

This is also a customizable ERP software solution but doesn’t require businesses to hire executives for setup or pay for servers and data security.

The ERP system companies take care of regular updates and timely backups. This is a very cost-effective yet efficient ERP system for small businesses.

Hybrid ERP:

As suggested by the name, the hybrid ERP solution is a blend of on-premise and cloud-based ERP systems.

This is most suitable for organizations that want to have access to both delivery modes – cloud and on-premise, and require new functionality that isn’t available in the existing ERP systems.

This type of ERP implementation is easier and faster than using multiple ERP solutions for different business needs.

What is the Cost of Setting Up an ERP System For a Small Business?

Traditionally, ERP software systems were only used by MNCs and large-scale businesses as these were expensive to set up and maintain.

Over time, especially with advancements in technology and the easy availability of cloud-based ERP systems, even small to mid-sized organizations have started majorly focusing on using ERP software to benefit their businesses.

Today, ERP system companies offer ERP systems in all sizes and shapes and you can opt for the one that fits your budget and requirements.

Does My Small Business Need an ERP System?

As a small business owner, do you often find yourself wondering if an ERP system is worth the investment?

To help you with this, we’ve prepared an extensive list of the top 11 advantages that you can expect to receive for your business as soon as you set up a robust ERP software solution.

Keep reading till the end to also get our top recommendation for a new ERP system.

What Are the Benefits of Setting Up an ERP System?

Enhanced Productivity –

• The major benefit of deploying an ERP system is to achieve operational efficiency like never before.
• As the most repetitive business tasks are automated and converted into organized workflows, there is an unbelievable increase in overall productivity.
• With the standardization of business processes after the ERP setup, there is greater accuracy resulting from reduced chances of data redundancies and discrepancies.
• This helps save time and effort in daily activities and ensures that the employees are able to work more efficiently on needle-moving tasks instead of mundane business activities.

Real-Time Reporting –

• When you set up a new ERP system, you install a data hub for your organization.
• This allows you to not just collect and store but also retrieve and analyze all business data from different departments in one centralized system.
• There is no need for multiple spreadsheets or scattered data sources. The real-time data from the ERP software can be used to create multiple business reports.
• You can create reports for any business aspect such as inventory management, capital management, sales figures, clientele data, etc.
• The stakeholders can then use these reports for critical business decision-making with ease and accuracy.

Accurate Forecasting –

As a small business owner, it can be very powerful for you to know what’s coming. This can help you be prepared to not just handle the situations but also make the most of them.

Modern-age ERP systems combine smart AI systems to analyze historical data and predict future demand, periodic revenue, business expenses, and other numerical data that is crucial for your business.

These forecasts are very accurate as they are not based on any assumptions but on the historical data of your business that is all stored in one place and analyzed by advanced systems.

Improved Customer Service –

With a centralized system to store and access all customer data, it becomes easier for the sales managers and the customer support staff to access all historical client data and communicate with the clients in a seamless way.

Getting help for their queries without long wait times is what makes your customers feel happy about being heard and cared for. Installing a new ERP system is totally magical in giving this memorable experience to your customers.

Not just this, with all this accurately collected and analyzed data, you can work on customer behavior, predict their buying patterns, and create strategic plans to get bigger growth for your business. It’s a win-win situation!

Cost Efficient –

At first, paying for an ERP system setup can feel like a huge expense for your organization. But in the long run, your small business will actually be saving a lot of money!

When you use an ERP system for your small business, you reduce overhead costs and empower your team to use their time more efficiently.

The ERP system also helps you save on the cost of hiring additional personnel, expensive software licenses, administrative resources, and many other similar business expenses.

Not just this, with the increased productivity and easy availability of accurate data, your business is able to function without delays and disruptions. All projects run on the track and on time which leads to massive cost savings in one form or the other.

Flexibility and Scalability –

Modern ERP systems are adaptable and have been designed to offer ease of customization and scalability.

They are flexible and can be tailored to the specific needs of your business. You are easily able to set up unique processes and request specific metrics for reporting purposes.

Also, as and when your business is ready to grow, the ERP system allows you to add new users, define new roles, and create new data packages.

As the new ERP systems are maintained regularly, you won’t have to worry about updating your systems with technological advancements.

You can sit back and focus solely on growing the business while everything else is being taken care of by your ERP software system.

Efficient Resource Management –

ERP systems provide insights that help you plan and manage all your business resources across departments for maximum efficiency.

It helps you effectively plan production schedules, manage inventory, predict sales and costs, and forecast resource needs such as materials, people, and even equipment.

This in turn helps you reduce downtimes and unexpected delays by maintaining the visibility of all assets even if they are at different locations or in transit.

You can ensure the timely completion of all projects which is a great advantage for your business and its growth.

Built-in Risk Management –

Regardless of what business it is, there is some risk involved in it. The best part of setting up an ERP system is that it helps you minimize these risks.

As the ERP software automates most business processes, there is a reduced likelihood of any accounting errors or lapses in the financial processes.

Also, since the ERP software helps protect your data, it is safe from internal and external theft and/or fraud. Most new-age ERP solutions offer internal controls and audit tools to further assist with data security.

Mobile-Friendly Operations –

In the new age of technology, most people are comfortable completing tasks on the go. Mobility is no more just a good-to-have feature but a must-have requirement.

As most employees prefer to use mobile devices such as smartphones and tablets to complete their work tasks, the new ERP systems are being developed to be mobile-friendly.

The cloud based ERP software stores all data on the cloud and this can be retrieved from anywhere. Employees are able to work on the dashboard, download reports, submit data, and do other activities without having to be sitting on their laptops/desktops.

This is also advantageous for businesses that operate from multiple locations and the employees have to travel often for business tours.

Improved Communication and Collaboration –

ERP software solutions bring all departments and data to a single place. This majorly helps with efficient team communication and collaboration.

Team members can access all data from anywhere and at any time. It’s easier for them to stay connected and also help members from other teams.

This overall helps your business in more ways than you can imagine. A stronger employee bond, faster resolution of problems, and removal of duplicate or redundant work are just a few of the many benefits.

Increased Competitive Advantage –

Installing an ERP software solution truly means setting up your business for success with technological advancements.

With all the above-mentioned benefits to your business, installation of the ERP system will enable you to stand out from your competition and outperform them.

With operational intelligence, you are able to perform better, keep up your promises of timely deliveries, be more agile, offer a remarkable customer experience, and move along with the fast-moving world.