What is an ERP system?
An ERP, or Enterprise Resource Planning, system is a type of software that helps you monitor and manage business process. ERP can be used across your accounting, project management, production and risk management systems – amongst many other functions. It’s an all-round system that integrates process with technology and works to refine how you operate.
It's best to think of ERP solutions as of the centre of your data structures, allowing a holistic view of your business. With ERP software solutions you can better connect the differing parts of your business - both with one another and with your customer’s overall experience. ERP makes the collection and monitoring of data simple.
A working example of an ERP system in action could be within a pharmacy environment. The pharmacist would open their digital system and type in ‘tonsilitis medication’. Then, the system would list out a range of relevant results, complete with the batch numbers, use-by dates, and the quantities in stock so that it’s much easier for pharmacists to track and locate.
What are the drawbacks of manual or disparate systems
You may now be wondering about the drawbacks of a manual or disparate system. Neither is perfect and so when deciding to make the switch to ERP, you will need to ensure that you’re well informed about the drawbacks that you’re likely to face. Or phase your implementation programmes to ensure the basics are done right and integrate further systems as they, either, expire, or in periods of downtime where impacts can be limited. What to consider:
If your business operates a manual system, you may find it difficult to keep stock of your inventory. After each sale, replacement, or refund, in this system you’d have to jot down what’s missing, being returned or new. During busy periods of time this can be difficult to remember to keep track of, or it can slow down your response times to customers, which could negatively impact your business’s reviews.
A manual system can also lead to traceability issues. It can, for example, be hard for employees to remember exactly where they’ve put one item down if they are processing lots of items, which could lead to items going missing or being noted down incorrectly on a manual system. Needless to say, this can have disrupting effects on business.
With a manual system, there is also a loss of real-time data. Timings can be noted down incorrectly or after the event. In digitalised systems, this isn’t the case as instead there will likely be timestamps being recorded in the background.
Incidentally, with both manual or a mixture of systems across each department, there is often no direct link of communication between the different departments of your business, which can lead to lots of manual processing or slow down operations dramatically.
Department specific disparate systems
A major turn off for using disparate systems is the fact that they require multiple data entries. For example, finance may process the purchase of stock, then the planning team may then enter the stock again into their scheduling or project allocation software, and then manufacturing may then have to enter each component into an assembly process sequence and so on… Every time each department has to log the items into their own systems, this slows down business production even more, or creates an increased likelihood of errors, which of course have to then be resolved at some point, taking away even more time.
What are the benefits to an integrated solution?
With the drawbacks of manual vs department specific systems out of the way, we can now look at the benefits of using integrated ERP solutions, which give you greater levels of flexibility in the longer term.
With an integrated solution, all employees have access to real-time data through one system. This can speed up your business’s output. And with less manual entry this reduces the room for error, which inevitably saves you time.
Why is change beneficial to a business?
The change to an ERP system can help your business to grow. Assessing and optimising processes will allow you to become more efficient. Proactively adopting the latest technologies will also help you to also increase innovation and lead to a greater focus on customer satisfaction. The digitisation and streamlining of process can additionally give you the chance to become more environmentally friendly as you can work towards results such as a reduced paper trails or less water used in key processing operations.
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