What are the benefits of ERP software?
The benefits an ERP system can bring will depend on multiple factors, including the industry and business model. Initially, MRP systems were designed to speed production while reducing inventory. Among manufacturing companies, limiting cash tied up in inventory while speeding time to delivery and increasing order fill rates are frequently reported benefits of ERP.
Inventory is just one resource ERP products touch though. As demand signals for human capital also travel from the sales forecast through to booked business, HR teams can hire and ensure enough people are available and adequately trained or certified to perform the work that is required.
Regulatory compliance, well beyond the segregation of duties required by SarbOx, is another major benefit. ERP systems provide traceability that can help inspectors as data on equipment performance, business processes, certification of workers performing regulated tasks, and more are centralized.
Visibility into the business is useful not just to executives managing the enterprise, but also to clients. Customers want a window into processes related to their order or their projects or even after purchase of a discrete item, its provenance — where it came from, who touched it, when and where it was made — for business reasons like expiration or country of origin requirements or to support consumer buying preference.
ERP makes work more effective and efficient. Optimized business processes, reduced administrative work, elimination of duplication and, increasingly, automation can enable a company to use ERP systems to increase productivity by as much as 18 percent according to IDC.
ERP software powers business automation. By running an ERP solution, you will be able to pick and choose between different approaches to automation, including IoT-connected equipment, embedded AI features or algorithms, or event triggers that cause one type of transaction to trigger another. One example of the latter is automatically notifying the waiting customer when a part comes into inventory.
One whitepaper from IDC suggested implementing a modern ERP system can, by itself, increase productivity by 18 percent.