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What is an ERP-system and why do you need one?

Written by Pia Weinz Karlsson | Jan 12, 2024 3:11:42 PM

An Enterprise Resource Planning (ERP) system is a software suite that integrates and automates core business processes, such as finance, human resources, procurement, inventory management, and supply chain management, into a single unified system. The goal of an ERP system is to streamline operations, improve efficiency, reduce costs, and provide accurate and real-time information for better decision-making.

ERP systems typically consist of a centralized database that stores all relevant business data, and various modules or applications that handle different business functions. Users can access the system through a web-based interface or client application to perform tasks such as creating invoices, managing inventory levels, or tracking employee time and attendance.

Nowadays, ERP systems are used by businesses of all sizes, from small and midsized firms to large multinational corporations, and are typically customized to meet the specific needs of each organization.

 

Seven benefits from having an ERP-system

  1. Improved efficiency: An ERP system eliminates the need for separate systems to manage various business processes. This, in turn, helps to streamline operations and improve overall efficiency.
  2. Increased productivity: ERP systems automate many routine tasks, such as data entry and report generation, freeing up employees to focus on more value-added tasks.
  3. Better decision-making: ERP systems provide real-time access to data, allowing managers to make informed decisions based on accurate, up-to-date information.
  4. Enhanced collaboration: ERP systems promote collaboration by providing a central repository of data that can be accessed by employees across different departments and locations.
  5. Improved customer service: ERP systems allow businesses to better manage customer interactions, such as sales orders and support tickets, leading to improved customer satisfaction.
  6. Reduced costs: An ERP system can help businesses reduce costs by eliminating duplicate efforts, reducing inventory levels, and optimizing business processes.
  7. Scalability: ERP systems can scale with the growth of the business, providing a solid foundation for long-term growth and success.

Common triggers for implementing or changing ERP-system

There are different reasons why companies choose to implement or upgrade their business system. Below are common triggers:

  1. Growth: As a company grows, its business processes become more complex, and the volume of data increases. An ERP system can help organizations manage this complexity and provide real-time visibility into business operations.
  2. Outdated legacy systems: Legacy systems can be outdated, difficult to maintain, and may not meet the current business requirements. An ERP system can help modernize these systems and provide a more integrated and efficient solution.
  3. Mergers and acquisitions: When two or more companies merge or acquire each other, they may have different business systems. An ERP system can help standardize processes and integrate data from different systems.
  4. New compliance requirements: Regulatory changes or compliance requirements may require organizations to implement new processes or systems. An ERP system can help organizations comply with these requirements and provide the necessary reporting capabilities.
  5. Challenges with insights: When different departments in an organization use different software systems, data can become siloed, making it difficult to access and analyze. An ERP system can help break down these silos and provide a unified view of the data.
  6. Competitive pressure: If competitors have better systems and processes they gain a competitive edge. Organizations may need to implement an ERP system to improve efficiency, reduce cost or enhance customer satisfaction in order to stay competitive.

Choosing an ERP-system

There are very many types of ERP systems. Which one is better highly depends on your company’s goals and business needs. Factors to consider are for example requirements on flexibility and control.

One important question to start with is weather to opt for a Cloud or a Hybrid solution. In this blogpost we outline the pros and cons of these two alternatives: A Six-Point Comparison of ERP-solutions: Cloud or Hybrid

What is the best ERP system?

Choosing the best ERP system depends on the specific needs and requirements of the company. To find the right ERP system, it is important to evaluate which features and tools are most relevant to the business. Cloud-based systems like Oracle NetSuite offer advantages such as easy access, lower initial costs, and automatic updates, which can be crucial for many companies. On the other hand, hybrid solutions like JD Edwards may be more suitable for companies that need more control and flexibility in their business processes.

What is an ERP system and which ones exist?

ERP systems are tools that help companies manage and automate their business processes. They consist of various modules that can include financial systems, CRM, invoicing, order management, inventory management, and project management. Common ERP systems include Oracle NetSuite and JD Edwards. These systems can be integrated with a company's existing processes and offer solutions that improve efficiency and decision-making.

Advantages of choosing a modern ERP system

Implementing a modern ERP system has many advantages for companies. A modern system supports integration between different business processes, leading to improved efficiency and productivity. Automating routine tasks reduces the risk of errors and frees up time for employees to focus on more strategic tasks. A complete ERP system also offers tools for analysis and reporting, making it easier for company management to make well-informed decisions based on real-time data.

Streamline operations with an integrated ERP system

An integrated ERP system can drastically streamline a company's operations by consolidating all business processes into a single platform. This reduces duplication of work and improves data integrity. The ERP system can automate tasks such as invoicing, order management, and accounting, saving time and reducing the risk of errors. By having a centralized database, companies can get a unified view of the entire operation, facilitating analysis and strategic planning.

Choosing the right ERP system for the company's needs

Choosing the right ERP system is crucial for the company's success. It is important to carefully evaluate the company's needs and goals before deciding on a system. Factors such as industry-specific requirements, company size, and budget should be considered. an ERP system that can be scaled up and adapted to the growing needs of the business is often preferred. Support and user-friendliness are also important aspects to consider to ensure successful implementation and that employees can use the system effectively.

Implementation and support of ERP systems

A successful implementation of an ERP system requires careful planning and support from experienced providers. The implementation process includes configuring the system according to the company's specific needs, training employees, and ensuring that all business processes are smoothly integrated. After implementation, it is important to have access to reliable support to handle any issues and updates. A good provider offers continuous support and helps companies optimize their system to meet changing business needs.

 

Using ERP systems for small businesses

ERP systems are not just for large companies; small businesses can also benefit from them. A well-chosen ERP system can help small businesses streamline their processes, reduce administrative burdens, and improve customer management. By automating tasks such as invoicing and accounting, small businesses can save time and resources, allowing them to focus on growth and development. Cloud-based ERP systems are particularly advantageous for small businesses as they offer flexibility, easy scalability, and lower initial costs.

Integrations and automation in ERP systems

Integrations and automation are central parts of modern ERP systems. By integrating different business processes and systems, companies can create a more cohesive and efficient operation. Automating tasks such as order management, invoicing, and reporting reduces the risk of human errors and increases productivity. an ERP system with strong integration and automation features can also improve the customer experience through faster and more reliable service.

The future of ERP systems

The future of ERP systems looks bright with continuous technological development and increasing customization options. Artificial intelligence (AI) and machine learning (ML) are increasingly being integrated into ERP systems to offer smarter and more predictive analytics. These technologies can help companies make even better decisions based on data and trends. Additionally, cloud-based solutions will continue to dominate the market due to their flexibility, security, and cost-effectiveness.

Conclusion

Choosing and implementing an ERP system is a strategic investment that can have a significant impact on the company's efficiency and success. By carefully evaluating the company's needs and selecting the right system, companies can create a solid foundation for growth and improved business operations. With support from experienced providers and a strong implementation plan, companies can fully benefit from the many advantages that a modern ERP system offers.

 

At xperitus, as an Oracle Partner, we have conducted numerous implementations of NetSuite and JD Edwards. We help our customers with system questions but also to a large extent with their process and business development. In addition, we assist companies in choosing ERP systems. If you have questions about NetSuite and/or JD Edwards, we can help you - contact us today by filling out the form below.