To understand ERP – Enterprise Resource Processing – a comparison to the human brain is a rather good metaphor to use for comparison.
The brain is the command center of the body. It controls all the many and varied functions of the body. It does that both individually for each system or organ, but more importantly, the brain works to keep them all working together in a coordinated fashion.
That keeps the whole body running smoothly and efficiently –- at optimum performance.
So, one might think of ERP meaning “the brain” of a firm’s technology systems. As such, what it does is coordinate, streamline, and create maximum efficiency across all aspects of business functions.
A Very Brief History
It can be said that ERP as a concept emerged way back in the 1960s. Even the first company to deploy it can be pinpointed. That would be J.I. Case, a firm that manufactures construction equipment.
It developed what it called an MPR system –- Material Requirements Planning.
To make a long story short, MPR systems were extremely successful and continued to evolve for the next three decades. In the 1990s, tremendous advancement in software enabled Enterprise Resource Processing to emerge – and importantly – powerful software applications.
In the ‘90s decade, ERP obtained the form we recognize today. It’s a unified database that handles information from all points within a company. ERP grew to encompass all key functions, such as accounting, human resources, sales, engineering, marketing, and procurement –- all organized in a sole source data resource for all employees to tap into.
Benefits Derived from ERP Systems
In no particular order, let’s take a look at some key benefits provided by ERP.
Improved Business Agility
The business climate has never been more dynamic. Some industries are downright volatile. Rapid change is the character of our times. It’s the new normal. Thus, a nimble operation is a must. The ability to respond to change –- and to be an actor rather than a constant reactor –- is important. ERP is the tool used to implement changes, course corrections, and launch new initiatives. It’s a way to add new applications quickly, integrate them, and move forward.
Dramatic Increases in Productivity, Efficiency
Dinosaur tools like spreadsheets, manual workflow charts, and obsolete software cannot keep a company competitive and growing. ERP is the key to streamlining all processes across all applications, platforms, and company functionality. All the data is in one place, eliminating that old “the left hand doesn’t know what the right hand is doing” problem.
ERP software is your data-driven and collaboration-derives work solutions environment.
Superior Security and Accessibility
Hardware is a major budget item, even for many small business models today.
ERP dramatically reduces costs by enabling managers to move their processes to the cloud. Systems based on a secure cloud platform solve a lot of problems at once. Furthermore, it bolsters a company’s ability to scale, upgrade and pivot on a dime. One more benefit is enhanced visibility and accessibility.
Strength Through Partnership
An ERP provider becomes, in effect, a powerful new partner for any business. It comes with support, training, and implementation. Software support and the advantages of community membership. For example, some ERP systems feature user groups that act like communities to open all-new networks that interact with non-competing companies and brands.
Business Growth
The ongoing and lasting effect of a powerful ERP system is an enhanced ability to keep up with demand and extend to new markets. It does that by streamlining, eliminating inefficiencies, and making better use of resources. If conventional systems are holding a company back, ERP sweeps away the obsolete and replaces it with new capabilities. That spells freedom to grow and offers the best opportunity to reach new growth potentials.
Improved Reporting
Relying on just one source for data is vastly improved if a company can find a way to tap into integrated solutions. Gaining access to information-rich reports is a tremendous boon for planning, determining the best way to allocate resources and anticipating future needs. Furthermore, this information is invaluable for preparing reports for investors, shareholders, and/or stakeholders.
There’s More But …
The benefits of ERP outlined in this article are numerous and multifaceted, but they only touch on the true potential for this powerful technology to transform any company, large scale, medium scale, or small into fine-tuned models of efficiency, business growth, and success.
