ERP Functions
Scale your business to new highs, achieve standardization, elevate production quality, and reduce project costs with a multitude of ERP functions
Definition of ERP
ERP Software is a unified system of information management that integrates a multitude of business processes, promotes automation & smooth flow of data, and acts as the Single Source of Truth to provide fast, smart & accurate decision-making to gain competitive advantage, increase revenue stream, and deal with modern challenges.
ERP consolidates data from different sources and converts raw data into actionable insights. It eliminates the need for several disconnected systems, promotes a smooth flow of information, and builds a cohesive system where up-to-date information is accessible to all at all times.
What are the Core ERP Functions?
ERP is a long-term commitment. Before choosing a new ERP, make sure that it covers the following ERP functions.
1. Production Planning
Production Planning is one of the most significant ERP functionality that helps you create strategies for smooth & ongoing production activity, allocate the right resources at the right place & time, and timely procure raw materials. It plays an important role in aligning production activity to meet your company’s goals & objectives.
2. Inventory Management System
The Inventory Management System is a critical module for manufacturers and distributors irrespective of their industry. It provides real-time inventory counts, allows the categorization of inventory into different groups, and saves inventory storage costs. It will help you maintain a minimum threshold of inventory to prevent costly stock-outs and excess stocks.
3. Order Tracking
Order Tracking plays an important part in building trust and improving customer satisfaction. It provides the whereabouts of customer orders (such as the current order status, location of the item, and estimated delivery time). Besides building trust, it helps decision-makers estimate delays and identify inefficiencies, to take corrective measures.
4. Asset Management
The Asset Management module plays an important role in maximizing asset efficiency and ensuring optimum use of organizational resources. It provides asset-specific functionalities such as tracking the purchase and disposition of various assets, scheduling their maintenance process, and calculating depreciation on assets.
5. Customer Relationship Management (CRM)
A highly satisfied customer can make your business while a highly unsatisfied customer can break your business. In today’s highly customer-centric time, CRM provides powerful analytical and forecasting features to predict consumer expectations & demand for your products, improve customer experience, and find cross-sales opportunities to increase revenue stream.
6. Supply Chain Management
Supply Chain Management in ERP provides end-to-end visibility into the supply chain operations. It helps you manage vendor contracts, track vendor performance & compliance, optimize logistical network and enhance efficiency in the delivery process.
What are the Advanced ERP Functions?
1. Business Intelligence
Business Intelligence Tools converts long & complex datasets into quick findings, actionable reports, and customizable dashboards. It is among the most popular ERP modules that help decision-makers gauge departmental performance, and fulfill the organization’s strategic visions.
2. E-commerce Management
India’s e-commerce industry is growing rapidly. The E-commerce Management module supports the growth of the e-commerce industry by integrating customer information, order history, and inventory-specific data. It provides real-time shipment tracking & monitoring to improve customer experience.
3. Risk Management
Risk Management module helps you identify potential risks, assess their potential impact, and take corrective measures to mitigate such risks. It plays an important part in the end-to-end risk analysis and prioritizing risks based on their potential impact.
4. Project Management
Project Management retains a complete historical record of all the projects so that you can track them and evaluate their progress. It allows senior managers to assign the right employees to the right project, and create new projects using easy-to-customize templates.
What Are the Business Benefits of ERP Functions?
A growing number of businesses worldwide are implementing ERPs to benefit from modern technological innovations and automation. Here are the primary benefits of ERP:
1. Improve Inventory Accuracy
Do you often face inventory shortages or excess inventory? If so, such issues can be eliminated using Enterprise Resource Planning (ERP) functions. With advanced analytical tools, you gain instant visibility into the inventory levels and ensure you maintain the optimum inventory levels at all times.
2. Quality Assessment
Quality products tend to provide greater customer satisfaction, improve business reputation, and reduce waste. ERP functionality provides quality control measures at every level so that you can build customer trust and loyalty, which pays off with repeated purchases and higher revenues.
3. Optimum Resource Utilization
With ERP application, your organizational resources such as labor, materials, and time are aligned to achieve a single objective. You gain more efficiency by planning and allocating resources more efficiently, and eliminating labor work.
4. Enhanced Customer Satisfaction
ERP stores a database of customer information which includes their past conversations, ticket history, purchase records, and invoices. This helps the customer support team track complaints and address them on a priority basis.
5. Accurate Sales Forecasting
Sales forecasting is one of the most critical ERP functions that helps decision-makers with data-backed analytics for strategic planning and decision-making. It lets you track sales performance, estimate future demand for your product, and analyze historical trends & patterns with the help of smart algorithms.
6. Remote Access
In the post-pandemic era, the cloud computing model has gained tremendous popularity. Cloud ERP comes as a Software as a Service (SaaS) that stores your data on the vendor’s servers so that you can access it no matter where you are, and which device you use.
Common Challenges in the ERP Deployment
While the ERP deployment is a beneficial investment, there are some challenges involved.
1. Implementation Cost
The ERP cost can be higher for On-premise ERPs. This cost involves the license fees, hardware upgradation, and support & training. Cloud ERP can help you get over this obstacle.
2. Technical Complexities
The deployment process is prone to technical challenges. For example, some add-ons may not integrate well with your ERP, requiring you to search for new alternatives.
3. Resistance to Change
You may face opposition from employees who might not want to change their way of working. Such issues could be solved with mutual discussions and by conveying the benefits of adopting innovation.
4. Process Standardization
Standardizing the processes throughout a large & complex organization may not be easy. Filtering and converting data from diverse sources may lead to data corruption, compatibility issues, etc.
Examples of ERP Usage in Different Industries
In today’s modern era, ERP is widely used across various industries and by companies of all sizes. Here are the most widely used ERP examples:
Manufacturing Industry: Manufacturing ERP Software is widely used by manufacturers to proactively plan their production activities, integrate business processes, and derive curated reports for faster & efficient decision-making.
Chemical Companies: ERP for chemical manufacturing helps with maintaining safety & quality standards, asset utilization, bringing traceability into the system, and preparing for a widespread recall if required.
Furniture Manufacturers: ERP for Furniture Manufacturing is increasingly popular among furniture manufacturers to set quality standards, analyze market demand for their products, automate core processes, and gain a real-time view of the company’s financial position.
Food Companies: ERP for Food Industry is widely popular among food producers. Thanks to ERP, they can track ingredients, create, alter & store formulas, achieve sales targets, and comply with food safety standards.
Pharma Industry: ERP in Pharmaceutical Industry helps pharma companies reduce costs, improve quality, enhance logistical efficiency, and ensure regulatory compliance. It plays a key role in ensuring organizational resources are dedicated to profit maximization.
Respond Proactively to New Market Challenges with Sage X3
Thanks to incredibly powerful ERP functions, the ERP serves as the backbone of modern companies of all sizes and types, operating in today’s highly-competitive and volatile business environment.
Sage X3 comes with business-critical modules that help you deal with sudden market fluctuations, gauge demand for your products, manage product lifecycle from production planning, designing, and quality control to development, speed up invoice generation, and effectively tackle customer problems. It is an all-comprehensive and strategic tool that empowers your company with digital transformation, insight-driven reports, and operational fluency.
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FAQs
1. How Long will it Take to Implement an ERP?
The actual time required for ERP implementation may differ based on different factors such as the product, business size, functional area, additional customization requirements, employee training, and so on. Many small and medium-sized companies take around 3-10 months whereas the larger ones take 9-18 months. Investing in ERP is a long-term commitment to boost the company’s efficiency, lower wastage, aid decision-making, and improve profit margins.
2. How to Boost Employee Efficiency with Your New ERP?
You can boost employee efficiency by defining your goals & objectives, developing a detailed plan of implementation, and providing post-implementation training to your workforce. You will need to convey to them the benefits of embracing new ways of working through ERP, and how it will simplify their day-to-day activities. By providing higher priority to employee training, you will benefit from lower resistance to change and higher employee engagement.
3. What is the Core ERP Functionality?
ERP Software in India provides tracking, analyzing, and reporting functionalities that are critical for modern businesses. It lets you manage key business operations – whether those in the back office or front office. It supports various business functions from project management, supply chain management, order tracking & management, AR automation, AP automation, and customer relationship management, among others.
4. What are the Functional Areas of ERP?
Procurement, production, supply chain, customer relationship management, and risk management are some of the functional areas of ERP. The software offers incredibly powerful and customizable features in each functional area to address specific business needs. For example, the manufacturing functional area may cover raw materials procurement, scheduled maintenance, and quality control, among others.
5. How is an ERP Different than an MRP?
Material Requirements Planning (MRP) primarily deals with the planning and management of material resources to ensure the availability of the inventory at the right time & right place, and continuance in the manufacturing activities.
In contrast, Enterprise Resource Planning (ERP) deals with all business aspects from production, sales, operations, sales, customer support, and human resources to accounting. As we’ve already seen in the definition of ERP, it empowers your company with automation, increased efficiency, and smart decision-making for revenue growth and long-term stability.
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