Glastonbury, Reading, Leeds, Lovebox: festival season is upon us, marking the beginning of summer and that time of the year when we can go and see our favourite bands play live. Usually, we are so caught up in the moment that unless there is a technical problem that requires the concert to be cancelled, we are never exposed to what happens behind the scenes and have no idea of the number of people working to make that gig happen.
Enterprise resource planning (ERP) works quietly in the background and makes sure that departments work well together. And, despite having been around since the nineties, and mainly used in large corporations, it has only been recently that small businesses are benefiting from ERP software.
But what is ERP software? Gartner defines ERP software as “a way to automate and support a range of administrative and operational business processes across multiple industries”. To bring this to life, let’s use music again to explain how ERP works in a bit more detail. If your company was a festival, ERP software would be holding the entire production together, providing sound technicians, lighting crew, security staff, etc.
The functions within a business work like the production company that organises the festival. Logistics, sales, finance and HR each represent a different part within the ERP system. These departments are vital for the correct running of the company, and more often than not they are relying on systems that don’t communicate with each other, working in isolation.
How can ERP software improve business efficiency?
Deciding to implement ERP can significantly impact a company’s performance, regardless of size and revenue. Large enterprises have been using ERP systems to help with their operations for years. Following its acquisition by American food giant Kraft (now Mondelez International) in 2010, Cadbury looked at improving its supply chain system and reduce operation costs. The British confectionery company used SAP to help target the scalability issues they have had in the past, leading to a more efficient supply chain. LG also implemented ERP software to manage global HR processes, moving from manual to automated processes and adding transparency, which improved global communication and operations.
How can SMEs leverage the benefits of ERP software? We’ll look at the five main benefits of ERP software for small businesses and how it can impact performance, reduce cost and lead to business growth.
One of the main advantages of ERP software is increased visibility within your company, which can have a significant impact on the business. For example, if your staff is using different software in each department, this may be delaying the decision making process due to the lack of visibility between departments. Accuracy in reporting is also an indirect benefit from increased visibility, as all departments are working together and data is available in one place.
By unifying information from different departments in one place, it promotes collaboration and improves communication. Collaboration is a key aspect for a company to succeed in the long run, and with ERP software it dramatically improves because the information is centralised and uniform.
Instead of each department working on separate spreadsheets with no communication between them, ERP software automates and streamlines processes, reducing the risk of human error and increasing efficiency.
As well as streamlining processes and increasing visibility, the advantage of having all the important information in one software application is that you’ll also lower your costs. ERP can help reduce administrative costs associated with manual processes, for example it can provide more accurate data entry and simplified processes.
ERP software can help businesses better control their data through user permission settings. If you have data in both an ERP system and spreadsheets, you run the risk of becoming more vulnerable as attackers can access sensitive data from two different sources. ERP software provides a safe location for data, so make sure that you transfer all relevant data to your ERP software.
ERP systems aren’t just for large corporations and can significantly help a company to work more efficiently by centralising all the key departments in one place, increasing visibility, security and collaboration between departments.
So, if you are heading to a festival this summer, remember: is the work in the background that keeps the music playing.
If you want to learn more about ERP software, visit our catalogue to find out what option is best suited to your business.