Enterprise Resource Planning (ERP) software is on the rise once again. Designed to integrate all of the information and processes within an organization into a single software solution, ERP software allows companies to take advantage of the improving economy. Aside from the more obvious benefits (such as increased efficiency and company-wide integration) ERP improves cash flow, reduces inventory, enhances reporting capabilities and reduces duplicate data.
The Evolving Expectations of ERP
The market for ERP software changed significantly after the financial meltdown in 2008. Since that time, businesses have experienced a slow – if not steady – recovery. Businesses now want to see a faster return on investment and products that are quicker and easier to install and integrate.
The deployment of ERP software can have a positive impact on a company’s revenue. As long as the product is chosen carefully and the system is properly maintained, ERP software reduces duplication in data and processes, improves communication between departments and creates better, more informative financial reports.
In addition to the emerging need for quick implementation, companies need international ERP solutions that support domestic locations, as well as strong international features, multiple language and currency support and multiple charts of accounts that can be accessed from multiple locations.
Benefits of ERP Software
Although hard to measure, the financial benefits of ERP software can be seen in many ways. Some companies use ERP to make savings in departmental budgets. The ability to compare cost savings revenue gains helps companies make better decisions when setting goals.
ERP software can also easily identify non-productive areas within the business, allowing managers to make the necessary changes to improve production and efficiency. More changes can be realized in ERP’s ability to speed up the monthly close process, in which a company’s books are temporarily closed and analyzed to produce a set of financial statements that indicate how well the company is performing.
This faster close process allows management to have access to information sooner, giving them more time to analyze the figures before producing the final financial statements. Automation of this process with the help of ERP can lead to significant reductions in the close cycle. The boost to business from these financial benefits is obvious. Better cash flow and liquidity is a critically important part of both riding out an economic downturn and taking maximum advantage of the recovery.
The Issue of Compliance
The compliance landscape has become harder to navigate safely in recent years. The government passed record amounts of regulatory legislation and, in the wake of the financial crisis, the financial industry in particular has been subjected to further scrutiny.
The financial services industry serves as an ideal illustration of the importance of data governance. The crisis in 2008 ensured that the customers of financial institutions are aware more than ever about the risks they run in investing their money. Trust is imperative and potential customers insist on knowing that their confidential information is safe. With increased security features and comprehensive audit features, today’s ERP software can help companies reevaluate their business processes to ensure compliance.
A Future for Growth
As the economy continues to improve, businesses need to ensure that they are ready for growth and able to fully adapt to the changing conditions. It is clear that the advantages in terms of operational efficiency, financial flexibility and inter-departmental communications offered by ERP systems can provide a distinct competitive advantage to those companies with the foresight and capability to deploy them. There is no doubt that ERP software is continuing to evolve to meet the demands of businesses both now and in the future.
To see the benefits you'll receive from an ERP Software solution, please download our complimentary video on The Features and Functionality of Infor VISUAL ERP.