As the UK economy hits a double-dip recession, more and more organisations are looking at ways to reduce costs and gain a competitive advantage against their rivals. A lot of organisations generate large amounts of data, but relatively few know how to use it effectively to create this competitive edge required to streamline your business and enabling high performance, which is the driving force in reducing costs and increasing revenue. This seems like a lot to take in at first, but with a solid ERP system the world’s your oyster once you know how to use all this “big data” to your advantage.
The most important benefit of an ERP system is the end-to-end visibility it gives you, to see information at all levels within an organisation and in return giving you better control. Having better visibility over your business will give you much more confidence to make better decisions on how costs can be saved, making existing processes more efficient and boosting competitiveness.
For instance, keeping your inventories up to date through your ERP gives you much better management control with a knock-on effect on departments, such as purchasing, shipping, and selling. ERP management enables you to have instant and accurate access to your inventory at any time in order to meet your customers’ demand. It eliminates the need to synchronise changes between a number of different systems, as all types of applications within in other departments can be consolidated. This will also help you save on cost, as this means you’ll only have one license fee.
Business Analytics includes pre-defined functionality for frequently occurring reporting needs; it also enables you to define and easily modify information to meet information needs specific to your business requirements. Using the data stored in an ERP system, Business Analytics can help employees at all levels to make confident and informed decisions based on hard facts. You can involve the experience and contributions of a much larger group of employees in driving the company towards increased competitiveness and profitability.
By tailoring Business Analytics to your organisations requirements you can generate the business analysis views that are most relevant to your data analysis requirements.
Instead of putting a request to the IT department that a certain report is required, which might need to be tailored to your own requirements, you can generate a report almost instantly by building analytical views yourself. Rather than waiting for the end of the month to analyse the performance of your sales team, you can generate simple, effective analytical views at any time. Each view can be designed in such a way that other colleagues can also view them, so you can share your data with groups and individuals as you wish. The infrastructure in place must be able to support the easy access to the data without adding any complexity. One of the biggest dilemmas organisations face when collecting information is that the data is dispersed throughout the business in several fragmented systems, which do not talk to each other. So you end up extracting all this data from the different systems, putting it into spread sheets, manipulating it the way you want it and then the results can be presented. This then wastes valuable time re-keying information into several systems and will also be prone to human error. On top of that, with loads of systems in place you will be have multiple support and maintenance contracts and other associated costs, such as upgrades.
These are some of the most common functions and areas in which an ERP system is normally utilised to provide total visibility from one interface – even across all of the below if you need it to:
- Finance and Accounting – General Ledger, Budgets, Journals, Intercompany transactions, Consolidation, Currency exchange rates, Intrastat and VAT.
- Cash Management – Bank account transactions, Cash Receipts and payments, journals and Bank account reconciliations.
- Fixed Assets – Depreciation, FA classes, FA Registers and the maintenance and insurance of fixed assets.
- Sales and Receivables – Customer and Contact information, Sales Order Processing, Sales Commissions and Customer discounts
- CRM – Marketing, Campaigns, Opportunities, Segments and To-dos.
- Purchase & Payables – Suppliers, Purchase order planning, Purchase order processing and supplier payments.
- Manufacturing – Machine and man utilisation, planning, scheduling production orders, consumption of materials and costing
- Human Resources – Attendance records, performance reviews, benefit systems, employee records and contracts
- Warehousing & Inventory – Inventory management, Location utilisation, Movements from different locations, Picking, Receipt and Dispatch of goods.
With a robust ERP system in place, the problems of limited visibility, collation of data as well as customisation of reports are removed as having one single system will run a lot smoother and efficiently, allowing your business to run at a better performance level and grow at an improved rate. It also allows to increase productivity without adding headcount, and also benefit from improved reporting capabilities so that effective, informed management decisions can be made in a timely manner.
The key areas in any business gives vital information from data received from a ERP system. Examples have been given below in the main departments of a business.
- Financial information within an organisation track financial assets and the flow of funds. Financial and accounting systems include accounts receivable, budgeting, profit planning, Cash flow and generating Management Information reports breaking down Revenue, Cost and profits.
- Sales and marketing information helps the organisation identify customers, products and services. In more detail, it includes sales order processing, pricing, discounts and sales forecasting.
- CRM information helps the business help records of potential and existing customers which in return will generate further sales by using effective marketing. The information helps organisations identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales.
- Manufacturing information provides information for planning, production, and scheduling. The information will allow the production department the ability to run the manufacturing processes smoothly, be cost-effective and deliver products on time.
- Purchase & Inventory management systems provide information to help you manage Suppliers, information about orders, production, check inventory availability and monitor inventory levels, reduce inventory, transportation, and warehousing costs.
In the end, knowing how to access and use all the data within your ERP system will give you a wealth of information about the performance of every department within your business, which will enable you to really streamline your operations and processes and make a great difference for your business’ bottom line.