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What Is ERP, and How Can ERP Tools Benefit Your Business?

closeup of a hand, with the index finger pointing at a digital display with ERP above it

Times are tough for businesses at the moment, as economic uncertainty is further fed by the growth of key operating costs, and public concerns for the onset of another recession. As such, smaller and newer businesses are facing bigger challenges than ever before.
But while external factors cannot necessarily be helped, addressing internal inefficiency and stimulating departmental effectiveness can help businesses weather the oncoming storm. One vital piece of the puzzle in this regard is ERP – but what is it, and how can it help?

 

What is ERP?

ERP stands for Enterprise Resource Planning, and broadly refers to a suite of tools and software that can help a business manage its internal processes. There are numerous departments and disciplines that keep a business ticking over, including finance and accounting to business development, project management, procurement and supply and internal HR to name but a few.

All of these disparate elements are managed by independent teams, overseen by executive management. But each department can only work effectively with relevant information and co-operation from other teams. As a basic example, the accounting department can only provide an accurate report on cashflow if they receive a comprehensive list of expenses from procurement, as well as necessary information about credit agreements with longer-term clients. This is where ERP tools come in.

 

Why Use ERP Tools?

Administrating the co-operation and collaboration of different departments can prove difficult, and even inefficient. Bottlenecks can easily become apparent, whether due to human errors or short-staffing. Where multiple departments require the same information, different drafts can enter into circulation and cause confusion.

An ERP system is a dedicated, centralised ‘control room’ for the flow of information and the administration of core business logistics. Putting an ERP system in place provides a number of key benefits to a business, not in the least when it comes to the improvement of inter-department collaboration.

 

The Benefits of Adopting ERP Software

The specific benefits of introducing ERP software as an internal business strategy are manifold. The biggest measurable impact is the financial one, as bottlenecks to collaboration are removed and business processes streamlined. Cloud collaboration and the instant accessibility of information and reporting reduces the man-hours spent collecting information and enables teams to work more efficiently.

This increased efficiency has a knock-on effect on overall productivity, with teams finding it easier and less time-consuming to work together and develop projects. For executive management, ERP ensures the most accurate possible representation of data – and a clearer picture of the business’ health and progress as a result.

 

In all, ERP presents an elegant solution to the management of disparate business needs and ensures the best possible reporting when it comes to monitoring project development and progress. The process of installing ERP software is also a powerful opportunity for upskilling staff, ensuring longevity on all counts.

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