ERP software have become an integral part of business today due to its benefits, despite huge sum of money and time involved in its purchase, deployment and training. ERP software generally has modules like Financial management, Supply Chain Management, Human Resource Management, Customer Relationship Management and Manufacturing. These are five key aspects of any organization and their synchronization and coordination is a must for better functioning and performance of the organization.
The biggest ERP software benefit is its capacity to integrate all the departments of an organization through single software. It provides a common data repository for all the inputs it gets from various points across the whole organization. The single storage system of ERP software enables availability of information to all the departments irrespective of its point of entry which provides real time information throughout the organization. This benefit of ERP also eliminates instance of data redundancy and duplicate data entry which eventually improves efficiency. The entry in an ERP system has to be done just once and it is available to all, in other way, information provided by one department can be utilized by the other as it is available in real time, which saves time and valuable man hours. The integration of all the departments brings different departments onto one unified system.
Another benefit of ERP software is that it can immensely facilitate day to day management of the work processes. Management is armed always with up to the minute information which helps them in peeping into the process for better decision making and managerial control. ERP enables the companies to calculate activity based costing which improves cost effectiveness. Much better visibility into inventory and warehouses helps in reducing excess inventory and releasing valuable money which gets blocked due to over purchase. Sales force is better equipped as they have access to latest information, feedback about the status of the deal and other critical information which team needs to close the deal. Better equipped sales team brings in better business.
Compliance of best practices and company policies through out the organization becomes extremely easy for management of the organization using ERP solution. This has been biggest problem particularly with large organizations which have different divisions working at different and far geographical locations. Compliance with different set of rules and regulations and currencies is another benefit of ERP software.
Non value added activities are discouraged, better talent management increases satisfaction amongst employees and improve employee retention rates which eventually helps in building efficient work force. Creating work flows and standard processes for repetitive tasks is possible only through ERP software which is another motivating benefit for organizations. Collection, cross checking and consolidation of data and later analysis of that data to draw valuable information from it, can be done in minutes, instead of employing special man power and devoting weeks to make it happen.
Redesigning work processes to ensure achievement of its objectives, identifying the role of every employee involved in the process and removing duplicate efforts, processes and activities, improves efficiency and helps in removing bottlenecks in the complete functionality of the organization. This kind of smooth functioning is possible only through ERP software as with simple software, monitoring each and every process and outcome of every activity, is not possible.