Many companies invest in digital strategies that fail to respond to their customers’ needs. Is ERP what you need?
Modern integrated business systems are developing rapidly and include functionality that would, only a few years ago, have seemed like science fiction. In times like these, a business can flourish.
There are a countless number of opportunities and benefits that implementing a new ERP system can bring. Enable your company to create a culture that challenges current processes and explores changing critical aspects of a business to help it to work smarter. If you allow it, the functionality contained within modern ERP systems fundamentally challenges BAU. The technology isn’t designed to provide a full ROI statement, but more to indicate what is possible in a “Brave New World”.
Companies and their staff are becoming more decentralised. New ERP software provides mobile functionality so users can stay connected and well-informed on business processes and their performance at all times.
You can access ERP systems on laptops, mobile phones, tablets and even wearable devices; so long as you have access to an internet connection. Also, you can send alerts to be delivered directly as an SMS message, indicating a need for action or notifying of a new appointment or meeting, for example.
How ERP Software Can Make Your Business More Connected
The concept of an ERP system is to assemble the entire company into a unified environment. ERP gives all departments or business units a shared vision and chance to coordinate in real-time. Nobody wants to run a siloed business with each department or business unit functioning separate from the other. Collaboration is a crucial and often necessary part of a successful company. Data entered into ERP systems is centralised and consistent, so there is no reason why departments cannot work together. ERP software also touches on almost every aspect of a business, thus naturally encouraging collaborative, interdepartmental efforts.
However, departments work best when they are autonomous. But autonomy can create the problem of blind spots. Without insight into other departments or business units, an organisation can waste resources duplicating efforts to solve the same problem. A central portal helps departments share information, customised data, and generate individual reports. It promotes cooperation and sharing of knowledge and resources.
With ERP enabling collaboration across the business, you can focus on critical decision-making armed with intelligence from the system. The company can operate as a whole, with standardised processes, while maintaining the uniqueness of each unit and ultimately moving to a process-centric organisation rather than a location-centric one.
As well as internal assistance, modern ERP systems support external collaboration with customers and suppliers by sharing the relevant data in the system with them. Data that is accurate and up-to-date, enabling both self-serve and collaborative supply chain decisions. In this way, the business can become a value-adding supplier to its customers, supporting closed-loop tracking of product, for example.
The Value of Business Intelligence in ERP Systems
Easy access to accurate, timely and relevant information will enable the business to make quick, transparent and informed business decisions. Many surveys have revealed that ERP systems help companies plan better and be reactive to change in demands, competition and unexpected disruptions. According to the Aberdeen Group, ‘modern ERP systems are able to increase on-time deliveries by 24% due to improved productivity, order tracking, and decision making’. The availability of information, as well as the user-friendliness of the system, allows businesses to be more responsive and keep up with fast-moving markets, enabling companies to develop products based on consumer understanding.
ERP software will also give the tools needed to create more accurate forecasts – bringing sales and operation planning (S&OP) into the heart of the business. Since the information within the system is as precise as possible, you can make realistic estimates and more effective projections. In this new world, business intelligence metrics will drive ERP changes directly, turning ERP from a “system of record” into a “system of intelligence”. The ERP system will be able to generate direct recommendations — based on real-time, accurate data — for factory floor and supply chain managers.
How Does ERP Increase Efficiency?
An ERP solution eliminates repetitive processes and dramatically reduces the need to manually enter information. The system will also streamline business processes and make it easier and more efficient for companies to collect data, no matter the department.
Another benefit of ERP is that you can see how products and services are moving through the pipeline. Raw material management, order tracking, inventory tracking, and revenue tracking are made more accessible with the help of these efficient tools.
In today’s world, it is impossible to think about how an enterprise could implement a fast delivery process without the help of an ERP solution. An ERP system improves both front-end and back-end relationships by creating an efficient shipping and delivery system. It streamlines shipping times, creating a much better experience for customers, making them more likely to do business with you again in the future.
Imagine being able to gain valuable new insights into each step in the supply chain, production, fulfilment, installation and service processes. Then finding out how each step contributes or detracts from total product quality and delivery of excellent customer experience.
The core goal of an ERP system is to provide actionable data and information to company leaders. But collecting accurate data is an ongoing and vexing challenge. The Internet of Things (IoT) has the potential to expand data availability and improve accuracy massively. This potential has significant implications for customer service, forecasting, inventory management and business intelligence.
Business intelligence metrics that typically accompany out of the box ERP systems present data from the past, such as a summary of past transactions. With the Industrial Internet of Things (IIoT), we can expect to see metrics that show the present reality and enable accurate, actionable business intelligence for the future.
Visibility into the activities on the production line made available with IoT can transform areas such as quality and traceability. What’s supposed to happen is replaced with what is happening within the business. In this way, a company can monitor quality and machine availability across the entire shop floor in real-time while also developing processes to suit your operators. For instance, automation will support the development of specialised UI for your shop floor staff.
Other Positive Impacts
While the above points have been focused more on technology-enabled benefits, ERP can deliver different positive results. Implementing a modern ERP system with defined processes in alignment with best practice will provide business transformation in its own right. In this way, the business engages in the process, recognising that this is not, in any way, an IT project.
Any proposed deviations from standard functionality can be challenged, to move away from levels of complexity that add no value. Designing future state processes based on what the selected system offers, rather than enduring the lengthy debate over which site has the best procedures, should facilitate easier adoption across the entire business hierarchy. In this way, you can mitigate some of the risks of change management.
The Next Step
All of the above points will deliver significant benefit. But, this can only happen if you follow an appropriate implementation process. You should manage each step of the implementation carefully to ensure the outcome aligns with the project objectives. Project activities, programme control and change management should work side by side as they link intrinsically in delivering real value. The effort cannot be understated or the benefits to achieve over-stated.
The investment in the system and technology will be a waste without comparable investment in the implementation process.
Contact us today about how we can guide you through your ERP implementation, ensuring the maximum future benefit for your business. Call us on +44 (0) 1282 463710 or send an email with your requirements to firstname.lastname@example.org.
Author’s Note: This post was originally published in October 2018 and has been revamped and updated for accuracy and comprehensiveness.