Running a business involves a bucket-load of operations. There are sales to track, accounts to manage, projects to plan, employees to recruit and what not! You have your able staff and back-office to handle all such affairs and you might also have individual software for specific functions, say a software for customer management, one for accounting, one for project management. That's good for automating tasks but don't you think individual software for each office task is really overwhelming to manage? Yes, it is. Won't it be great if you could manage all the tasks from a single umbrella? Again, yes, it is. And this is why you have ERP software programs today.
So, what is ERP software?
The acronym for Enterprise Resource Planning, ERP refers to a mighty and intelligent software suite which is equipped with a set of needed integrated applications for easy business process management. These integrated applications are meant to manage various business tasks & different back office functionalities related to HR, sales, technology etc. In simple words, ERP is designed to integrate all the major facets of business operations into one database, including product development, manufacturing, marketing & sales and of course accounting.
The basic functional areas of ERP software
Let's have a sneak peek into the 4 basic functions of ERP software:
Marketing & Sales
Every standard enterprise resource planning software will have a marketing & sales module that will help your employees with several activities:
- It would allow customers to place order online and then would keep track on the very progress of the purchase order.
- Would process customers' orders in real time, keep tab on the stocks & monitor the order status.
- Extend data related to sales orders to your Accounting department and offer feedbacks on sale costs & profits.
- Shares sales orders and forecasts with your Supply-Chain Management department.
- Help HR department with personnel data.
- Would receive legal & job information needed for planning procedure.
Supply Chain Management
- Helps your staff to place orders & receive feedback on raw materials, their availability & delivery.
- Shares data on material stocks, production plans & inventories with the Accounting department.
- Attains sales data as well as analysis on manufacturing cost.
- Extends information on availability of products & order status.
- Helps HR department with personnel information.
Accounting & Finance
As mentioned earlier, businesses are into deploying individual accounting software solutions and there are many leading names in the market as well, like Xero, Quickbook etc. They are good no doubt but then can be of limited help as your business starts to grow and this is when you would need integrated ERP software with robust accounting functionality. It's because standalone accounting software programs are unable to handle the complexities of a large organization where multiple users need to access the accounting software module. The ERP systems are developed with Enterprise-level standard in mind and hence scores higher over individual accounting software programs when it comes to growing and large enterprises. It's to mention here that the accounting part is one of the primary aspects of any ERP software and any effective ERP implementation starts & ends with robust accounting software program functionality. SapphireOne is one such ERP program with rich accounting module.
So, how would the ERP software help in accounting?
- Would issue invoices, credit memos & would keep account of the payments.
- Extends the sales data & analysis of manufacturing cost to your supply-chain management.
- Gathers data on the material requirement, production plans & inventory.
- Receives and keep log of sales order information.
- Shares data on cost & profit with your marketing department.
- Keeps account of payroll & benefit expense information.
Human Resource
The enterprise resource planning software programs have lessened much of the workload for the HR departments.
- Keeps account on all the major data regarding employment and recruitment such as job information, pertinent legal requirements regarding employment & remunerations.
- Host information regarding hiring needs from other functional areas of a business like Marketing & Sales, Supply Chain Management & Accounting.
- Keeps track and shares data regarding employee payroll & benefit expense with Accounting department.
Other function areas are-
Project system - The software helps the companies with planning & control of different projects regarding marketing, construction and R&D.
Asset Management - ERP software programs help the companies with easy management of fixed-assets such as plant & machinery & related depreciation.
Plant maintenance - the software helps the companies with easy management of maintenance resources & it also handy planning for the preventive maintenance of your plant machineries.
Advantages of ERP software
There are reasons galore when you are asking why to implement ERP software-
A comprehensive umbrella for all functions
Hands down this is the most important advantage of enterprise resource planning software program. The software has captivated us with its extensive umbrella that houses versatile modules to help the business with every major function. You have an all-inclusive set here that relieves you from chaos and high cost of managing and maintaining a whole range of individual software programs for the diverse business functions.
Reduces complexity
This point is in tune with the point mentioned above. The ERP system extends a neatly-designed platform to take care of all your major business functions which in turns lessens complexities in a business.
Increases efficiency
The ERP software assures easy visibility of important data among different departments which facilitates smooth collaboration between the various departments of a company- that eventually enhances efficiency.
Less error
As ERP automates record-keeping, it eliminates the errors usual with the traditional manual record-keeping process. This way, the businesses benefit from improved data quality which in turn facilitates better & more accurate business decisions.
Lesser operational cost
As ERP system lessens manual labor by a great extent, there is lesser chance of delays in the work process that were usual with manual intervention. Delayed works play a huge role in shooting operational costs which can be solved by the ERP software.
Easily scalable
One of the major advantages of ERP software is that it can be scaled easily. It implies that you can always power it up with new functionality, if needed for your business as per changing times.
Cloud or desktop
The ERP software solutions are available in two basic modes today- the desktop version and cloud option. While the whole digital world is vouching for cloud, it's natural that you would prefer to think the cloud way too. But wait, the cloud solutions have revealed some major security concerns and pitfalls like issues during poor or no internet connectivity & vague pricing. Moreover, with cloud computing there is also the confusion as who is the real owner of data. This is why smart ERP providers like SapphireOne is also providing a conventional desktop ERP version along with their web solution.
Studies on ERP industry trends reveal a grand 7.2 percent in market growth for the software by the year 2020, resulting in a whooping $41.69 billion in sales. A software that enables business to scale across all the major functionalities is no less than a lifesaver and it's little wonder that companies are all falling for it.