What Are the Primary Business Benefits of an ERP System?
ERP stands for Enterprise Resource Planning. In simple words, ERP software is a type of software that is devoted to the whole business management.
So, what is the primary goal of an ERP system?
It is used for better integration of all the business processes within the company. One of the great benefits of ERP systems is that after developing and implementing ERP software, the company will be able to better manage daily business activities, such as project management, reporting, order and supply chain, planning, marketing and sales, reporting, accounting, human resources, and what’s more. So, the main purpose of an ERP system is to harmonize the company’s business processes by improving how the company’s resources are used.Even though ERP was initially planned for big enterprises, these days more and more companies implement ERP in their businesses. According to the 2021 ERP Report, 92% of organizations said they considered their ERP project a success.
And it comes as no surprise as ERP software combines all the business processes within a single system and thus, helps businesses operate day-to-day activities more smoothly. Automation of some tasks, significant improvement of the whole business process, error-free reports, better customer service, – all these benefits of ERP make it worth investing money into ERP software development.
ERP Software Development
Developing ERP software can be rather expensive, but the benefits of ERP systems definitely out-run the cost of ERP systems development. ERP systems can run on a number of computer hardware and various network configurations. ERP systems usually use a database as an information repository. There are custom and out-of-the-box ERP systems. The latter refers to the general type of ERP software catered more for the mass market with no (or very little) customization possible. Custom ERP systems are tailored towards specific business and are created to better fit each specific company and its processes.
ERP systems can be sold as a package with some space for configuration. Configuration usually doesn’t require ERP coding but this process can be rather complex, especially for the people who aren’t tech savvy. Configuration also has some limitations. For example, if you need a certain ERP module devoted specifically to your business, then you should consider custom ERP development.
Custom ERP development does require professional expertise. So, if you aren’t skilled in IT, you can find and hire professional ERP development companies. At A-Team Global, our highly skilled software engineers can develop ERP software that would meet your individual needs. Our ERP developers can take care of ERP design and ERP programming language that would be best suitable for you.
But before going into the process of development of an ERP system, think about ERP systems features you would need for your business. The most popular ERP features you can include are: automation, reporting, data analysis, accounting, marketing and sales, CRM (customer relationship management, tracking and visibility, etc. And, of course, the features of an ERP system can be customized based on your requirements.
Types of ERP Systems
There are three main types of ERP system: cloud ERP, on-premise ERP, and hybrid ERP. On-premise ERP Software works on in-house servers at your location. As a variant, it could also run on other locations under your control. On-premise ERP should further be managed and maintained by dedicated IT stuff (internal or external). On-premise ERP also requires some additional costs for antivirus software and storage backup systems. Hybrid ERP, as the name suggests, is the combination of on-premise and cloud ERP. For example, you might use an on-premise ERP system for main corporate functions, and then add cloud ERP for holding up some other business units.
Cloud ERP systems, unlike on-premise ones, are hosted offsite, on the software vendor’s service. In this case, the vendor becomes responsible for the application, servers, data storage, security and feature updates. Cloud ERP makes it possible to access the software via the Internet.
The major difference between cloud and on-premise ERP is where the software runs. But apart from that, there are some other distinctions as well. For example, for on-premise ERP software, you, usually, pay a one-time license fee (which can be quite high), and for cloud ERP software you pay for a monthly or annual subscription (but it could also include additional fee for support and updates).
Cloud ERP software is becoming more and more popular these days mainly because of its lower initial cost. Other benefits of cloud ERP include: simplicity of implementation, flexibility, no need to have an IT team that would manage the system, easy access via the Internet. But it has its disadvantages as well. On-premise ERP, compared to the cloud ERP, has better data protection, independence from vendors, and easier customization. So, it depends on you and your needs when it comes to the choice of on-premise or cloud ERP solution.
Main Reasons for Implementing ERP Solutions
The global ERP software market is expected to grow from US$ 42.1 billion in 2021to US$ 110.41 billion by 2030. These figures speak by themselves pointing out that while a lot of companies already use ERP software, the constant demand for implementing ERP systems will be steadily growing. With the competition getting harsher, applying ERP systems can be a significant competitive advantage. But there are also other major reasons why companies consider implementing ERP. Among the main reasons are:
Better Planning and Reporting
With the help of ERP software, all the business processes are integrated into one place. And it makes it much easier to better plan on the next business activities. Besides, all the routine tasks can be automated, and, thus, smarter workflows can be used. Besides, employees can spot all the problems immediately and, thus, do better reporting with real-time information.
Enhanced Customer Service
ERP systems have proven to be efficient in retaining customers. As an example, when sales order and fulfillment departments are connected, the customer will have a much better experience using the company’s service, and, thus, is likely to stay loyal to the company. And generally speaking, using modern ERP systems help create better customer profile and enables a personalized approach to each particular client.
ERP software enhances collaboration between the departments within the whole business organization. Thus, it gets much easier for the employees to communicate internally as well as externally, which is especially convenient when the company is global. ERP also increases transparency and keeps all the team members on the same page.
ERP software makes it possible to keep all the information and all the business activities in one place. And it means that it’s much easier to avoid entering the same data several times as well as to eliminate the risks of making mistakes. Besides, a lot of processes could be automated, and instead of doing some routine tasks, employees could be involved in more creative activities. And it all increases the company’s productivity.
Better Data Security
Data security is crucial to every organization. Data breach can have damaging long-lasting consequences. It’s always better to be safe than sorry, -that’s why it’s important to invest in data security. With such security features as multi factor authentication, behavioral monitoring, and automation that are available in ERP systems, you can get much better data protection.
These are the basic reasons and advantages of implementing an ERP system. But when it comes to the question of whether it’s better to set up a pre-built or custom ERP system, it, of course, depends on the type of business you operate and your needs, – however, building custom ERP has many more benefits. Let’s have a look at some of them.
Benefits of Customized ERP Software
The above-mentioned reasons for switching to the ERP software are relevant for both pre-built and custom ERP. But apart from the mentioned advantages, custom ERP software has the following benefits:
- Specific ERP systems features
Every business is different and, thus, has various needs. For one type of business, it’s absolutely necessary to have certain ERP modules like warehouse and inventory, for other types of businesses it’s not that relevant. With the custom ERP software, you can choose to have such features of an ERP system that are significant specifically to your business and avoid having unnecessary ERP built-in features.
Custom ERP makes it possible to later add or remove certain features. It’s especially useful when you work on a long-term project and might not know initially what you’ll need later. Being flexible is important in today’s world as it gives you an extra competitive advantage. So, when your business grows, you won’t have any limitations.
- Constant support
The team that worked on your custom ERP development will be able to constantly support and update your ERP system. (Our team members at A-Team Global are always ready to take the challenge and create customizable ERP software to meet your needs and to give you further assistance and support with the ERP).
- Smooth integration with third-party plugins
Even though pre-built ERP does offer integration with some third-party plugins, with custom ERP you will surely be able to add every business app you need, which is not always the case with pre-built ERP. With custom ERP it’s a required condition to be able to add just any app you need (or want) and easily integrate it with the whole system.
- Adaption to your workflow
Custom ERP is created in such a way as to best adapt to your current workflow. On top of it, you’ll have full control over the whole process and will be able to decide on the spot which features you need, and which ones aren’t relevant to your business.
- Possibility to upgrade
The digital world develops very quickly, and it’s important to go hand-in-hand with the time. Custom ERP gives you the possibility to upgrade the system every time you need it, so you’ll always stay on top and work with the latest technology.
- Better HR organization
With a custom ERP system, you can have an HR module created in the way to specifically fit your business needs. With the features like employee database, payroll management, employee training and development, reports and analysis, etc. it’s easy to have everything organized in one place. Since HR is so important for every business, the company will be more productive when everything in terms of HR is better organized.
Of course, the cost for custom ERP software development is higher as compared to the pre-built ERP. But taking into account all the benefits of custom ERP, we believe it’s worth investing in custom ERP. Besides, only the initial cost is higher, but, in the long term, it is even cheaper, as you’ll get constant support, the ability to upgrade the system as well as to add all the necessary features
How to Build a Custom ERP for Your Business
Now, let’s look at the process of building custom ERP for your business. After you’ve clearly understood all the reasons behind choosing ERP and all the benefits of custom ERP for your business, it’s time to start the process. Here we’ll look at the steps that will help you understand the whole procedure.
Before jumping into the process of custom ERP development, it’s useful to clearly define and even write down your business goals. You can ask yourself: How will my business benefit from custom ERP? What current (and future) problems might it solve? How can it improve the whole business process?
After you clearly determined your goals, you can move on to sketching the basic preliminary plan. At this stage, you can get familiar with the major ERP modules and then think which basic or additional modules might be good for your business. It doesn’t have to be precise at this stage, additional features can be added in the process.
When it comes to custom ERP software, it is especially important to think about UI/UX design. Since the ERP system is an integration of various components within one system, it should be easy to use and navigate for all the employees from all the departments. It’s important to avoid the mess, so at this stage it’s essential to create some wireframes and schematic representation of the future interface. It should look neat and easy-to-use.
At this stage, you can devote more time to thinking about which third-party products might be beneficial for your business operation. Some of the products that can be easily combined with the ERP system can add significant value to your business.
Test, test, test everything several times in a row. Before the release of the custom ERP system, it’s important to do proper quality assurance testing. At A-Team Global, our QA specialists always make sure that everything is working properly, and all the bugs are fixed. Testing the system takes time and has several stages, as it’s important to make sure everything is working properly, and all the initial requirements are met.
At this stage, the actual implementation of the custom ERP system happens. At this stage, all the business data is transferred to the ERP. Take some time to check that all the data is accurate. If everything is correct, the old system gets removed, and you can start working with the new custom ERP system
During this stage, the employees can learn how to use the system, and if any issues are happening, the software company you worked with can help you with maintenance. At A-Team Global, we fully support you in all the stages of the creation and implementation of the custom ERP system. The system is also regularly updated to ensure you are working with the latest technologies available.
So, the custom ERP system can significantly upscale your business. Its obvious advantage is that the communication within the organization gets easier, more transparent, and there will be no need to switch between multiple programs. Just imagine: all the data from different departments are gathered in one single place, all the information is easily obtainable, and you have all the necessary features for your business. –Sounds like a fantasy? –With a custom ERR, it is not.