Enterprise resource planning (ERP) is the management of core business processes through the use of software and technology, which is most often done in real time. ERP software allows an organization to collect data from across their business and analyze it in order to improve upon business processes and projects. An ERP is a single system that integrates everything from project management to databases of material and even human resources. In other words, ERP systems allow organizations and related stakeholders clear insights in to nearly every aspect of their business.
In order to optimize enterprise resource planning systems, many software vendors offer cloud-based ERP solutions. By using cloud ERP vendors, businesses can save money and enhance several aspects of ERP. For example, cloud ERP often includes secure data solutions such as data warehouses or data lakes. These systems allow for collection of big data that can be gathered from across business units. Common data, such as the availability of resources and materials, can be updated as soon as new product arrives or is used. Additionally, cloud ERP offers enhanced machine learning capabilities, as these algorithms can be programmed to analyze data immediately upon ingestion, so that businesses always have up-to-the-minute insights and recommendations. Furthermore, ERP systems can be programmed to automatically order new inventory once the available levels reach a set threshold. This type of analysis can be especially useful for large enterprises when it comes to material requirements planning (MRP). This means that businesses can ensure that materials are always available for production without having to store large amounts of raw materials.
Furthermore, ERP systems are programmed to monitor best practices, so that businesses can ensure that everything is running as it should be. This includes on the customer-facing side of the business. For example, ERPs can store customer data, and analyze it to discover the most successful marketing strategies for target audiences. Many enterprise resource planning systems also include call center support, so that a business can ensure that even its call center is running appropriately.
A successful ERP implementation can benefit a business in a number of ways, including:
- Enhanced inventory tracking: By automatically updating inventory as products and materials arrive or are used, businesses can ensure they have an accurate count. This can be taken one step further by programming automatic replenishments before materials or products are completely out of stock.
- Centralizes data: Rather than having to pull information from multiple systems, ERP software collects all information into one application. This allows for easy access to data and analyses as needed.
- Ensure compliance: ERPs often include automatic tracking of laws and regulations. As these change, the system can detect when compliance is no longer being met, and make recommendations around how a business can fix these issues.
- Improve delivery time and customer satisfaction: By having a real time look into every process, businesses can identify any products or processes that are operating slower than expected. By rectifying such issues, companies can improve the time it takes to manufacture or ship products, and thereby improve the customer experience.