ERP stands for enterprise resource planning. In a nutshell, ERP provides the powerful integrated technologies you need to monitor and plan for every aspect of your business as you hopefully grow and subsequently adapt to changes in supply and demand.
That may sound like a magic lamp of cure-all software functionality, but it works. Feel free to check out Sage.com for an example of ERP software, otherwise let’s look at some of the advantages of ERP.
Inventory management (& improved supply chain management)
How is your inventory currently controlled? Do you have systems that manage everything from the procurement of raw materials to the hardware and software your company relies on? The most likely answer is that you simply go about your business reporting on the need for new materials as required. But that brings many issues.
Inventory management means tracking supply and demand as well as keeping tabs on the companies that provide your components or raw materials. Knowing when to order more stock to meet market demand and understanding when to switch suppliers is all part of ERP. The advanced technology allows you to monitor every aspect of your supply chain and inventory management. Without ERP, you are basically left with either a huge task on your hands to stay on top of things manually, or you just have to hope for the best (neither of which make business sense).
Standardised business processes
Staff across your company need to be able to collaborate. Where staff can’t collaborate on tasks, your working processes grind to a halt at regular intervals, and grumbles about how things could be done better are never far behind.
ERP software enables collaboration by providing data and analytics across departments, giving staff the visibility they need to plan their tasks.
Many multi-departmental companies are guilty of relying on self-made relationships between managers, rather than inviting the wider staff body to observe the overarching working practices involved with cross-departmental interactions. This means you could have tens of staff members across two departments relying on the decision making of two department heads.
Give your staff the opportunity to collaborate, and standardised working practices that benefit productivity will follow.
Company-wide scalability across systems
Do you currently rely on staff to communicate through email as a means of handling just about every aspect of your company? There’s no shame in it. That’s a normal way to go. And we’re all familiar with it. The only problem is that where communications are drip fed to relevant departments through email, growth opportunities can be missed through the inability to scale operations on demand.
What you need is better communication and system scalability that together can provide the growth platform you need to swell and shrink production at a moment’s notice. Obviously, this may not be a major concern for most startups and other smaller business models with only a very finite number of staff and limited materials that can all fit in a single stockroom cupboard. But for larger enterprises, scalability should not be overlooked.
