Today, many companies are looking for ERP without even knowing its true power. Also, most of them give a faded answer when asked, ‘What is ERP software,’ exactly?
So get ready, as this blog is going to be a valuable piece of information on ERP system, which will cover the true power of ERP, its types, advantages, and much more!
By the way, if you are a small business and want to jump straight in, read our blog on expertly listed top 20 ERP software examples available in India.
Now, without any delay, let’s start with the first question.
What is ERP Software?
The term ERP refers to Enterprise Resource Planning. As the name suggests, ERP software is used to plan and manage various internal operations within a company. ERP allows you to automate repetitive processes regardless of the department, task or stage of the operation. You don’t have to worry about going to the finance team to find out the payment status of the next purchase. All the information and insightful data is at your fingertips.
In short, an ERP automates business processes, eliminates delays and increases productivity. As a result of these things being in sync, you are empowered to reduce costs and overheads.
What Power Does an ERP Bring That Your Legacy System Doesn’t?
Most of the potential benefits fall into three categories: direct and indirect cost savings, opportunities to increase revenue, and greater business effectiveness.
To keep it short and to the point, here are three powers of ERP software:
- Your current setups don’t allow you to manage and control your processes because of disparate systems. Think this way: You log in to different software, bring out data in one place, do the required maths, and then feed it into another system – it’s tough! For example, a standalone accounting software can’t manage your subsidiaries’ ledgers or isn’t connected to the company’s inventory. Chaos, right? Therefore, ERP software’s modular design is a power that makes it a connected system. You just need one login ID to get the information of every department. And if authority is provided to make changes or trigger any required command, you can do it with clicks on the same screen.
- As a company grows, it’s essential to have a system that reduces manual work so team members can spend less time on routine jobs such as monitoring cash flow or debt ageing and focus on more productive tasks. The next power of ERP – scalability – solves these problems! Many ERPs, including NYGGS, provide a scalable software system that can easily handle thousands of operations and hundreds of users without crashing down.
- Previously, only large organisations could afford an ERP due to high investment costs. With the emergence of cloud-based ERPs like NYGGS, enterprise software has also become accessible to SMEs and requires much less investment potential nowadays. Now, cost isn’t a problem because of the cloud power of ERP software.
Types of ERP Software
- On-premises means that a company’s ERP software is installed on servers within its own facilities. This is also known as an on-premise ERP installation.
- Cloud ERP means that the software runs on a third-party server, for example, the ERP developer or supplier. They offer their software as a service. This concept is known as SaaS (software as a service), which includes ERP software, hardware, and support services such as maintenance, all packaged to provide at monthly, quarterly or annual charges.
What are the Advantages of ERP Software?
The three main advantages of an ERP mentioned by most companies are:
Centralisation of Information
ERP software brings together business information from different departments. Having a central source of information is a prerequisite for integrating business processes. Silos of information are a company’s greatest enemy.
Automation of Manual Work
ERP automates tasks, workflows, and processes. The software automatically aggregates invoices, inventory is updated in real time, and tasks are assigned to the appropriate employees. Automation saves the company time and prevents human error.
High Availability of Information
Using an ERP, employees can access information relevant to their roles. For example, an order picker consults a packing list, while the finance director studies the April billing. All data comes directly from the ERP software. Quick access to up-to-date information is important because it enables rapid decision-making at all levels of the organisation.
In addition to these 3, some more benefits of ERP software include:
- More efficient business operations.
- Linking key business information.
- Real-time data visualisation.
- Centralised information input.
- Better compliance with procedures and standards.
- Better internal collaboration without confusion.
- Improved collaboration with customers and suppliers.
- Reliable data, greater professionalism and presence.
- Lower operating costs and overheads. Meaning expense is in control.
- The company’s sales value can increase after implementing an ERP.
Questions to Ask When Implementing ERP Software
As you narrow down your potential ERP vendors, you’ll want to create an ERP implementation checklist and ask detailed, specific questions about technical support, troubleshooting, and costs. For example:
Timing Related Questions
- How long will implementation take?
- What is the timeline for activities?
- What resources will I need to allocate, when, and how much effort is estimated in hours/week?
- How can operational disruptions be minimized, and when might they occur?
Customisation Related Questions
- Is it customised ERP software?
- Where are customisations really necessary, and where can I use modules, reports, or other industry-specific features pre-existing in the software?
- Does the pre-selected ERP software understand the uniqueness of my processes and requirements?
- Do I understand which processes and requirements might not be that different from industry standards?
Project Management-Related Questions
- How will the vendor manage my project?
- Will I have a single, experienced point of contact?
- Which members of my team will be part of the implementation process?
- How will the vendor help me track progress?
- Who do I call if there’s a problem, and how quickly will they respond?
Cost-Related Questions
- In a SaaS (subscription-based) ERP, how are costs structured?
- Which costs are upfront, which are monthly, and how does the contract address change management—for example, increases in the number of users or an additional module?
- Could my implementation incur additional costs?
- Where have additional costs arisen in other client projects?
- Within the project scope, what should I be especially careful to understand?
Data Migration-Related Questions
- If I want to migrate my existing data, what should I know first?
- Am I aligned with my ERP provider to assess the complexities of migrating from legacy systems, cleansing data, removing redundant or obsolete data, etc.?
Upgrades and Maintenance-Related Questions
- How will I be able to make changes to the ERP software after implementation?
- What is the process for adding new features, changing the number of users, customising new reports, or making any other changes?
- Types of changes I can make, for example, creating new reports and queries?
- What activities will require assistance from the vendor or a specialized consultant or programmer?
Platform Flexibility-Related Questions
- Is there a community that offers complementary applications by department or industry or pre-built integrations with other applications?
Training-Related Questions
- What type of training do you offer?
- Is it in-person or online?
- Is it free? If not, how much does it cost?
- How often are updates and expansions made?
Lastly, demand a full technical demo, giving your team the opportunity to explore the user experience and visualise what it would be like to work with this software.
Frequently Asked Questions
Q. What modules does ERP software typically offer?
Common modules are inventory, warehouse, project management, supply chain management, customer relationship management (CRM), human resource management, financial management, quality management, and business intelligence (BI).
Q. When do I need ERP software?
When a company grows, you have to deal with thousands of data and information. Managing them manually is always prone to missing out on insights to grow businesses. That’s where an ERP comes in, to manage cross-departmental information smoothly and also present the insights visually and in an easy-to-understand way.
Q. What is the difference between ERP and CRM?
A CRM focuses specifically on managing customer relationships. This software answers questions like: Does a customer have unpaid invoices? What is this customer’s contact information? What interactions have you had with them in the past?
On the other side, ERP software is a much more comprehensive business software that allows you to manage different departments from one software. Also, a CRM can be purchased as a standalone system, but many ERPs include a CRM module that saves a huge amount of money for a business.
Q. Is there an open-source ERP?
Open-source ERP is a serious option for some companies, especially if the ERP system needs to be highly customised. The company can modify the source code itself to fit its business processes exactly. However, one disadvantage is that the organisation must employ (in-house) software and will also have to handle maintenance itself. One of the most well-known open-source ERP packages is Odoo.
Q. What are the most used ERP systems?
SAP, Oracle, and Microsoft – these three providers have been in the field for a long time and are loved by enterprises worldwide. This is to say, the popularity of an ERP doesn’t mean it’s the best fit for any company; a lesser-known ERP may include features that can solve your business’s unique problems. Therefore, if you ask for ERP software for small businesses in India, NYGGS stands out with its cloud-based hosting, customisability, and intuitive dashboards. Schedule a demo today to learn more!