How to manage your business with ERP systems30.04.2015 | Blog
Manage your business with ERP systems simply and fast!
Business management has never been easy. With all those multitasking departments, differently oriented employees and constant changes in the policy and aims of any entrepreneur or larger unity, it becomes harsh and long-lasting to detach the agenda tasks from the additional duties, to establish the required and necessary control over your stuff and in general to build up the top and the best business environment for the most faultless working process ever! Moreover – it becomes harder and harder, when the moment for reconciling the financials at the end of the month comes. The usual and needed sales forecasts becomes dependent mostly of guessing than of your personal figures. And how about your inventory in the warehouse? Is there anybody, who is charge for its surveillance and are you sure a human being is the better idea for such a mathematical task, when you suffer from a lack of customer support representatives. Speaking of which, there is a big possibility for your customer support to be weak due to the poor business organization you have already established and inexplicably you still approve and keep to ruin your profits and success even more. What we are guessing right now – in case you are positive for all of these management process issues – is that your overall business is in trouble. You might not understand it yet, but you urgently need an improvement in your basic organization and the working process is just the beginning. We haven’t mentioned them above, but how about your human resources department? If you are a midi or big company, then your stuff might be working in a total chaos…All of these make us believe that you should start considering managing your business with ERP systems right away. The best news is that this approach is quite simple and fast and in 85% of the cases, the business actually not only survives, but also reached a higher level of advance.
Before getting deeper into the business management with the fantastic contemporary and life-saving ERP systems, we would like to say few – not even few, but more, so this system could become clearer for you and for your stuff – about it. Let`s begin with a brief background history of ERP management and software products, which as a matter of fact were not exactly software products…
Background History and Basic Information About ERP Systems
The history of ERP business manegement begins back in 1990. This term was firstly introduced by Gartner1, but the main roots this system gets from are even more faraway – somewhere in the 1960s. It was then, when the idea was introduced as to the inventory management and control in the manufacturing sector. Software engineers invented a specially tailored products (programs, but very primary as to their comparison with the present ERP systems). The main conception behind these products was the monitoring process of departments and business fields like inventory, reconcile balances, and report on status. By the 1970s, though, this very conception had advanced and was replaced by the legendary Material Requirements Planning (MRP) systems for scheduling production processes, which systems as a matter of fact are yet used by many companies. What a shame, when the better and more helpful ERP now exists…!
In the 1980s, Material Requirements Planning progressed even more and reached a completely new level of working capability. It did get the name of MRP-II due to the fact that it started making many more things and went more faraway than its previous management functions of inventory control and other operational processes. Eventually, the Material Requirements Planning turned into back-office unity, which took case of things such as accounting and human resources. And eventually the MRP-II became the basis of the currently well-known ERP.
These days the ERP is known as Enterprise Resource Planning, It is used for managing a business, because it helps chiefs and supervisors to put more control and clarity in the processes like inventory and order management, accounting, human resources, customer relationship management (CRM), and beyond. What the ERP systems are mostly loved and appreciated about is the fact that they come with a big bunch of functions, which makes the organization as easy a childish game. In many currently existing business companies, which use ERP system, even deducted the expenses as to salaries for experts in management. The truth is that an ERP is indeed a model of ruling, which excludes the necessity of supervisor job position and meanwhile, it does not make human mistakes. But let`s find out now how ERP software works.
How Do ERP Systems Work?
First of all, know that you can find numerous ERP software products on the market. Each of them distinguishes by its brand (the careator or the development company) and by its level of functionality. However, the aim is always the same – to keep all the departments in a business unity synchronized and optimized enough, so any single employee can save time from pointless operations or explanations, when it comes to train a new worker, who does not what where any key document or process take place in the particular firm. Meanwhile, the ERP systems provide some degree of synchronized reporting and automation. Instead of forcing employees to maintain separate databases and spreadsheets or to climb many stairs to reach a person from another department or calling the sick guy, who has day-off but is the only one, who knows a particular and very significant thing from the business working process, you can keep everything strictly organized and properly accessible for the whole stuff – from ordinary papers to business plans of the next months, account balances that show how much you can invest for new improvements and etc. Here are two examples. Imagine you have a manufacturing business and you sell your own goods. When the manufacturing process is done, the ERP system manages to show you how much you have spend for the expenses of the production.This report directly goes to the sales department, where they can analyze if discounts can be arranged for this period or the company suffers leaks. Later, the customer support representatives will get the report of the ERP system from the previous month to be aware of what is mostly preferred by the audience and what can be put on hold for the next season, for instance. Here is another example. You are a consulting firm with many experts from different spheres – accounting, laws, legal translation and even if you want IT development. When you browse the ERP archive, you can see which experts are mostly engaged in the company and which can go be transferred to other department (for instance, the legal department needs some IT help to optimize its customer support services for quicker responses, while the IT are predicted not to have any work duties during the next months).
As a result, companies of all sizes and from different fields of the economy are going bravely to ERP systems. They make an amazing success during the first next months only due to the fact that the work becomes easier, the results are clear, the issues – specified – while the numbers are always in front of you to make your own prediction, even though these software products do predict instead of you, too! So are you still thinking you can handle all those tiny, but important process in your business? Even if you are a manager, taking benefits of using ERP system is always a smart idea you should consider.
5 Cases You Definitely Need to Start Managing Your Business ERP Systems!
The first case is when your working process is fully covered with numerous different software types for even more numerous different departments or duties. Such a mess can make of your business nothing else, but a failure, It is like with people – when too many people try to solve one single problem, the result is zero since everyone is trying to put his or her own idea on the pedestal and eventually nothing works. With the machines and the software products this trend is the same. Instead of using so many different system, use one – ERP. ERP system will integrate all of your machines or running software types in a way so you can detach each significant to an individual database. With one source of information that contains accurate, real-time data, an ERP solution breaks up information logjams and helps the staff to make quicker and better decisions.
The second case is when you cannot get all of the information for your business at one place, so you can analyze it. Let`s go back to the manufacturing company example. If it is large and you cannot see all the accounting balances from the very first start of your production till now alongside withe the sales and the innovations that you have put into force through the years, how can you know what improvement type works and what is your most profitable season? And these are only the major portions of your business management…With an ERP solution, chiefs recieve the chance to have a clear view of business operations at any time, while other staff can get the information they need to do their jobs more effectively. For example, sales representatives should be able to view a customer’s full transaction history and more proactively improve renewal rates while increasing upsell and cross-sell opportunities.
The third case is when you just cannot handle the accounting. The reasons might be different for such an issue, but what is general for most companies today is that they do the accounting season by season and usually the entire “math” job remains for the end of such a period. All those lost data or even those data that have not been taken under consideration will make your accounting problem even harder. With an instant ERP solution you achieve significant impact. With all financials in a single database, accounting staff won’t have to spend hours cross-posting information, rekeying numbers, or reconciling data manually. Your accounting staff will be more productive, freeing them to deliver critical reports without delays and frustration.
The fourth case is the most typical one – you just don’t make enough sales and the customer support services are mostly responsible for it. When sales, inventory and customer data are maintained separately, it can create serious problems across your company. A very clever economist – we are not going to tell his name – used to say that every business is a live creature, so if so, how can you move your leg apart from making an effort from your hip. Everything lives together, so you should also use it together and analyze it together. When every person from your stuff – the customer support representatives, the accountants and the workers have the same access to the the same database, they simply start working from the very same very direction and they will go to the same plan achievement or aim. An ERP system can help you establish such a co-operative process with one ordinary software that will generate each of your employees PC.
Last, but not least, you urgently need ERP system in case your IT department is chosen… to hell. Many companies by the way suffer from such a problem. It just becomes to complex for the IT department to manage all the departments and systems at once due to the difficult and harsh software types they cover. Eventually, the data gets lost or even worse – not checked or taken under consideration at all. Instead of installing some other software—and difficulty alongside with it —to an already ineffective system, ERP technology can give you the agility to respond to changing business needs rapidly.
So let us finish with the top benefits that ERP system generously offer to business management. This following list will show most of them and will conclude the most important things and examples we have talked about till now.
1. Full integration of all your working processes and departments at one place, which makes it simpler to manage and direct them remotely!
2. Availability of one central database with no duplication of data for each of your employees, because they need to interact regardless everyone`s occupation and area of work.
3. Fastest improvement of your finances ever! No more accounting mistakes and no more disability to be unaware of where the problem in your business is.
4. Full risk deduction. When you see the risk, it becomes easier to predict and to prevent errors, isn’t it?
5. Improves customer service by getting you one source for billing and relationship tracking.
ERP systems are the future of business management. Not embracing it will not get you the desired profits and success, so give it a try and share with us your impressions by all means!