When you search for Enterprise Resource Planning (ERP) on the web, the sheer amount of information that comes up in front of your screen can be overwhelming, not to mention a little confusing. In fact, every website seems to have its own definition of this term, and one ERP software implementation can vary widely from the next.
These differences emphasize the flexibility that can make ERP in the Philippines such a powerful business tool. To get a deeper understanding of how this software solution can transform your business into the next level, it helps to get a better sense of what ERP actually is and how it works.
What is ERP?
ERP is an acronym for Enterprise Resource Planning, but even its entire name does not shed much light on what ERP is or what it exactly does. For this, you need to take a step back and think about each of the numerous processes that are essential to running a business, such as inventory and order management, bookkeeping, human resources, and Customer Relationship Management (CRM) among others. Simply put, ERP software integrates these various functions into a single whole system to streamline procedures and information across the whole organization.
The central characteristic of all ERP systems is a shared database which supports multiple functions used by various business units. In practice, this implies that workers in different divisions, for instance, bookkeeping and sales, may rely upon the same information at the same time for their particular needs.
Best of all, it also offers some level of synchronized reporting and automation. Instead of forcing employees to maintain separate databases and spreadsheets which need to be manually merged to generate reports, ERP software allows staff to pull reports from one centralized system, e.g., Sales orders can automatically flow to the financial system without any manual re-keying, order management section can process orders quickly and accurately, and the finance department can close the books faster. Other frequent ERP features include a portal to allow employees to quickly understand the business performance on key metrics.
Origin of ERP Software
The word ERP was initially coined in 1990 by Gartner, Inc., but its origins date to the 1960s. Back then, the concept applied to stock control and management in the production industry. Software Engineers made programs to track inventory, reconcile accounts, and report on status.
From the 1980s, MRP (Material Requirements Planning) grew to encompass more manufacturing procedures, prompting many to call it MRP-II or Manufacturing Resource Planning. From 1990, these systems had expanded beyond inventory management and other operational procedures to other back-office functions like accounting and human resources, setting the platform for ERP as we have come to know it.
Software-as-a-Service (SaaS) solutions, also referred to as cloud computing has helped fuel this expansion. Cloud-based solutions not only make ERP applications cheaper, but they also make these systems easier to implement and manage. Perhaps even more importantly, cloud ERP enables real-time reporting, which makes them even valuable to executives and staff seeking accurate data regarding their concerned business department.
As a result, companies of all sizes and a wide array of industries are transitioning to cloud ERP system software. In fact, many predict that SaaS-based ERP adoption will rise 21% annually. When you start to see the big picture pertaining to the benefits of ERP, it’s easy to see why it’s becoming so popular and its use will just continue to grow so quickly.
Why Enterprises Need to Adopt ERP in the Philippines?
ERP systems are utilized by organizations looking to control their business functions within a centralized and integrated platform. ERP is commonly employed by firms working within the supply chain to keep track of all of the moving parts of manufacturing and distribution. However, ERP can be utilized by a number of different industries including those in healthcare, nonprofit groups, construction, and hospitality sector. Organizations needing to manage their staff, inventory, and customers can all heavily rely on ERP to make their operation more seamless.
ERP in the Philippines is used to handle a number of business functions, but how can it be better than other solutions? Though ERP might have similar aims to other solutions, its unique attributes make it a distinguishing competitor in the software market.
- More Money Saved. Although a lot of vendors have introduced flexible pricing in the last several years, ERP packages continue to be a big investment. For most enterprises, the large costs alone could make it seem unlikely that the program will end up saving your organization any money at all. But once you get past the sticker shock, it’s a lot easier to see how ERP systems may offer an excellent ROI.
To begin with, ERP unifies the systems that may currently be fragmented on your organization. From product development to accounts payable, your employees will have the ability to get all the needed tools for their project from a centralized system.
By unifying techniques, you help your employees utilize their time more efficiently. With ERP, users don’t need to look down a piece of data across multiple programs. With the help of the central database, information is much easier to regain. Moreover, your company saves money with ERP by eliminating the need for users to be trained in several systems. This not only reduces the amount of money spent on training but also lessens the logistical effort involved.
- Improved Collaboration. The qualities of ERP software can vary slightly depending on the app you are using, but all systems surely enhance collaboration within the workforce in one way or another. As stated before, the database is an essential part of what creates ERP software in the Philippines With this database, you give your company with one source of truth to work from. This reduces any mistakes brought on by using incorrect information, further reducing prices.
Furthermore, a central database reduces any hesitation or stalling throughout the life of the project, since all staff members have access to the company-wide information they need. Additionally, there’s no need to unite information across various systems or sources. Since each of the information is accumulated, stored, shared, and accessed via a single system, there’s no concern about the accuracy, completeness, and security of the data files.
- Better Analytics. A central database assists in improving your reporting and analytics. Since an ERP documents stores all the information the users enter, it makes for a superb company intelligence tool. As long as your vendor provides strong performance, ERP software makes it simpler and quicker for your own team to generate many reports. Reports that could take days of research and compilation when there’s no ERP within the enterprise.
Just like a customized software, most ERP systems provide a modifiable dashboard so executives may see reports when they first log into the system. These reports may include everything from investment and income statements to custom KPIs that offer insight into certain functions. The ability to get access to these reports quickly empowers you and your staff to make better decisions more quickly. You don’t need to rely on your IT team to create the accounts that you need. Lastly, reports typically arrive with access levels, ensuring that staff only view valuable company data according to what the management has granted them.
- Improved Productivity. With traditional procedures, tedious tasks are completely unavoidable. Tasks like generating reports, monitoring inventory levels, timesheet processing, and tracking orders have historically taken employees hours to accomplish. After the umpteenth hour of entering the same line of data into various forms, even the best staff members will definitely make a mistake.
In the event you choose the best solution, an ERP system can automate your most boring tasks. The database inside ERP software eliminates redundant tasks like data entry and allows the system to perform complex calculations within seconds. This frees up your team members’ time to perform more considerate work, increasing your ROI when it comes to labor. From this, ERP raises your organization’s productivity, efficiency, and endurance.
- Happier Customers. Handling your customers has never been so important. In fact, client remarks are more impactful than ever due to the rise of social media.
The very best method to enhance customer satisfaction is to supply client-centered goods and services. ERP provides this in a few different ways. First, most ERP system in the Philippines has been outfitted with a Client Relationship Management (CRM) tool that can be readily incorporated with your operations. Having an ERP within your enterprise, your CRM has access to data across all your business departments.
Together with contact information, an integrated CRM can show you information such as order history and billing info. This allows your staff to see your customers more broadly to acquire a better comprehension of their needs. The increased customer visibility makes it possible to revise your sales strategy for enhanced lead generation.
With sufficient research and thoughtful consideration, you’ll soon get a grip of the actual ERP uses that provide all the benefits listed above, painting a picture for why ERP is important to a company.
Learn more by reading another article vital to the overall ERP software. You may start with “Pro Tips for Initiating HRIS Implementation for Your Business” to understand HRIS and its role in the ERP ecosystem.