What is ERP?
As a business leader in the Financial Services sector for many years I came across hundreds of acronyms and industry specific terms. Some much more obvious than others in terms of what they stand for. And those that use them, use them as though they are household terms, with every expectation that everyone else understands exactly what they mean! I believed this phenomenon was reserved only for bankers!
And now that I am in a very different industry, I have realized that the very same is true in the Technology sector! SaaS, DNS, ISP, VOIP, SEO, CRM, and the list just goes on and on! One of the most elusive in terms of having a great business explanation is ERP. Easy enough to find out what it stands for (Enterprise Resource Planning) but not so easy to understand or explain at a cocktail party!
Yes, there are a few things that are clear about ERP. It is a technology platform and it is composed of many different components. The platform is valuable to companies of all sizes, complexities, and industries. Some companies will use/ need all the components and others will only leverage a portion of these. Components include: purchasing, manufacturing, inventory and order management, accounting, human resources, customer relationship management. Long thought of as a synonym to an accounting system, clearly ERP systems are much more than that.
The real power of ERP is its model of sharing data. That means many departments can access a shared database rather than keeping/ managing data in multiple places within an organization. The implications to this are huge: elimination of entering data more than once, consistency of data, single data storage, generating reports from the same common source, and the optimized flow of data (from entering an order, to checking inventory, to fulfilling the order, to generating an invoice – all in one system).
The Enterprise in ERP doesn’t mean that it’s restricted to large companies. Rather, regardless of the size of the company, Enterprise means it can be used throughout the organization.
Given the huge benefits from an accounting perspective, many professionals in the finance area have long understood the benefits of having and fully leveraging an ERP system. But the benefits are business wide and in fact, it is the business leadership that should be making the investment in ERP. Think about the power of having real time insight into your company’s key data!
Some of the other business advantages created by ERP include:
- Reducing real costs by eliminating multiple entry of the same data and reducing the costly errors that occur inevitably with human data entry
- Automating end to end processes thereby improving productivity
- Reducing inventory costs resulting from better planning, tracking, and forecasting
- Improving financial compliance with regulatory standards and reduce risk
- Real time capabilities and ability to see what is going on with your company as it happens
- Enhancing customer service by providing one source of data for relationship management and support tracking and improved “on time” delivery
- Optimize IT spending but eliminating high integration costs of multiple systems
There are so many different objectives companies are trying to achieve. Implementing the right ERP system clearly falls into the category of operating more efficiently and driving down costs. In the end, this means more profit to the business owners. Now you’re talking my language!
Working with a specialist in this field allows you to leverage this opportunity in a way that creates minimal disruption and allows business owners/ leaders to focus on the primary business that they are in. Call us today to learn more about the Mantralogix advantage. Our business goals are to work with businesses to improve their bottom line!