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ERP System In India

What is ERP system and why is it critical for your business?

ERP System India

ERP is an acronym that stands for Enterprise Resource Planning (ERP). It’s a business management software that integrates and manages a company’s financials, manufacturing, human resources, sales & marketing, supply chain & logistics, generates granular reports, and maintains robust relationships with third-party vendors, suppliers, and distributors. 

 

The primary reason for implementing an ERP software is to automate business processes. It helps finish manual jobs in fractions of a second, enabling employees to focus on meaningful tasks requiring human intelligence.

Today, with industry 4.0 solutions, such as Artificial Intelligence (AI) and Machine Learning, ERP system can accurately forecast the demand and supply in the market and identify hidden patterns in data to reveal meaningful insights. In addition, cloud-based ERP systems allow business partners to share critical data instantly from anywhere, anytime, and through any device. In short, ERP systems provide the agility, collaboration, and speed that companies need to compete in the market.

The role of ERP systemis rising rapidly across various business functions.

The global ERP software market is projected to reach USD 78.40 billion by 2026,
growing at a CAGR of 10.2% from 2019 to 2026.

Top 3 signs that you need an ERP system

Here are the top 3 reasons you might be struggling with your existing legacy system.

3 reasons why businesses are afraid to embrace ERP systems?

Here are the top 3 reasons you might be struggling with your existing legacy system.

Fear 1:  How to select the perfect ERP system for your business?

The primary reason for implementing an ERP software system is to integrate all business processes and bring them under a single radar. Another crucial function is to allow each business stakeholder to create, access, and share data from anywhere, anytime, and any place. Therefore, partnering with a third-party vendor is essential to get a comprehensive understanding of which ERP solution would be a perfect fit for your company.

Fear 2:  A major ERP overhaul is an expensive process.

Implementation of ERP system isn’t a one-time affair. Instead, it’s a continuous process that never stops. Thus, you can purchase new software modules after you perfectly understand their applications and benefits. You need not invest in a significant software renovation process without knowing how it might impact you.

Fear 3:  You don't want to change your existing legacy system.

The best thing about ERP systems is that they are compatible with most legacy software solutions. Moreover, they have additional modules that can pave the way for your company’s future growth. For example, suppose your legacy software handles your business’s manufacturing and production side. In that case, you might be looking for a solution that provides tools to build robust and long-lasting vendor relationships.

 

How Modern Manufacturers Can Reduce The Inefficiencies That Hinder The Growth?

Top 9 modules of an ERP system

An ERP software has various modules that help companies perform critical business functions, such as procuring raw materials, manufacturing finished products, maintaining a record of each financial transaction, and revealing hidden insights to understand the changing market trends. 

Each ERP module is interconnected that provides a single source of truth and allows sharing data across various departments.

The following modules form the backbone of an ERP system:

Finance & accounting
The finance & accounting module of the ERP software automates financial tasks like closing the books quickly, maintaining Accounts Payable (AP) & Accounts Receivables (AR), creating profit statements, generating financial reports, minimizing financial risks, and complying with the national and international laws.
Sourcing and procurement
This module allows businesses to procure raw materials and services from vendors at the most affordable rates. The primary functions of the sourcing and procurement modules are contract creation, automatic purchasing, requests for quotes, vendor verification. Moreover, it reduces underbuying and overbuying of raw materials, seamlessly connecting with third-party networks and enhancing supplier negotiations with AI-powered analytics.
Human resource management
ERP is a comprehensive software that contains a module for managing human resources. It provides functionalities such as recording payroll, time, and attendance. Moreover, it also consists of more robust HR functionalities like generating a minute-to-minute task completion report, workforce analytics, and a granular employee report card that identifies which employee is performing well and who requires handholding.
Manufacturing
The manufacturing module of the ERP software allows users to get real-time feedback and updates on the production schedule, track machine changeovers, monitor equipment effectiveness, track the progress of each production order, examine manufacturing waste trends, generate shift records, and much more.
Supply chain management
The supply chain management module tracks the movement of goods across the supply chain in real-time. Also, it automatically generates BOMs (Bills Of Materials) that record the quantity and price of each raw material that arrives in the inventory and every finished product that goes out of the warehouse. Moreover, this module also increases the supply chain visibility that smoothens the transportation and logistics part of the business.
R&D and engineering
Top-notch ERP solutions also have R&D and engineering modules that provide tools for product development and design, product compliance, product lifecycle management that helps companies to create innovations quickly and efficiently.
Service
Industry-wide best practices include providing personalized services to customers. It helps build robust and long-lasting customer relationships that help maximize profits in the long run. This module contains tools for spare parts, in-house repairs, field service management, and building service-based revenue streams. Moreover, it also provides granular analytics that enables technicians and service reps to solve customer queries quickly, thereby significantly enhancing customer loyalty.
Enterprise asset management
One of the most crucial features of ERP solutions is the enterprise asset management (EAM) module. It minimizes downtime and keeps the equipment and machines functioning at their peak efficiency. The other features of this module include asset operations and planning, predictive maintenance, process scheduling, health and safety, and environment protection.
Sales
Maintaining constant communication with existing customers and new prospects is necessary. The sales module of an ERP system can provide you with data-driven insights that will help you brainstorm unique upselling and cross-selling opportunities. Other functionalities of the sales module include sales performance management, order management, billing, contracts, and support for sales representatives.
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ERP integration techniques

ERP software is gradually becoming the backbone of companies across industries because of the various business functionalities. But they should also have the ability to integrate with other business applications and processes, such as Customer Relationship Management (CRM), e-Commerce systems, Human Resource Management (HRM), and other industry-specific solutions. 

Modern ERP systems can integrate with other business applications using customized adaptors and connectors like Application Programming Interfaces (APIs), Integration Platform as a service (iPaaS), and Enterprise Service Bus (ESB). 

iPaaS platforms follow a cloud-based approach accepted by modern businesses worldwide. They can sync cloud-based and on-premise ERP with SaaS applications, and even non-coders can operate them efficiently. In addition, they are relatively inexpensive and provide a broad array of other uses, such as machine learning and Internet of Things (IoT) network integration, automatic API generation, prebuilt content, and much more.

Top 6 benefits of ERP systems

After understanding what is ERP and why it is necessary for companies across industries, let’s see the top 6 benefits of ERP systems.

Feature

1

Deeper insights

Destroy information silos to facilitate free-flow of information across business departments. Create a single repository that enables stakeholders to create, edit, access, and share critical data anywhere, anytime, and through any device.

Feature

2

Minimize risk

Ensure all business processes are compliant with government-mandated regulatory frameworks. It will also help your business increase visibility and control, predict, and prevent risk.

Feature

3

Enhanced agility

Software as a service framework significantly enhances the efficiency of a business by providing access to real-time data. It enables identifying and reacting to new opportunities and understanding the changing market trends and customer preferences.

Feature

4

Granular reporting

Gain minute-to-minute granular reports that will assist you in tracking the health of your business. Improve your performance and share results with relevant stakeholders at the earliest.

Feature

5

Easy to use IT infrastructure

A business usually hires an IT team for maintaining and operating its IT infrastructure. On the other hand, ERP implementation is a simple process, and employees with no prior coding experience can also use it.

Feature

6

Enhanced productivity

ERP is best for companies looking to automate and streamline their business processes and enhance employees’ productivity with fewer resources.

Types of ERP deployment strategies

There are numerous ways to deploy an ERP system, such as on-premises, on the cloud, or in various hybrid frameworks that are a combination of both.

Cloud ERP

There are two types of ERP systems: cloud ERP and on-premise ERP systems. The cloud ERP is hosted in the cloud and delivered through the Internet as a service (IaaS) model by the vendor. Cloud ERP systems are gaining more popularity because of greater scalability, lower upfront costs, better integration, and higher agility.

 On-premise ERP

You control everything in an on-premise ERP. It’s typically installed in the data center at your desired location. Remember that your in-house IT staff is responsible for maintaining and upgrading an on-premise ERP System.

 Hybrid ERP

This model is often referred to as two-tier ERP. It provides the mobility and agility of on-cloud ERP systems and the safety and security of On-premise ERP software.

10 points to remember while selecting an ERP system

Enterprise resource planning (ERP) is a business management solution that automates repetitive tasks. It helps employees to focus on meaningful tasks like brainstorming effective strategies. ERP software has various modules, each of which has different functionalities that allow businesses to perform functions quickly and efficiently. 

ERP software provides tremendous benefits to various industries, including manufacturing, pharmaceutical, construction, real estate, aerospace, chemical, food & beverage, and many more.

ERP is a comprehensive business management suite that consists of various modules, including finance & accounting, sales & marketing, supply chain & logistics, business intelligence, and many more. On the other hand, the finance ^ accounting module is a particular module that automatically generates financial documents such as profit and loss statements, general ledger, accounts payables & receivables, and much more.

The primary reason for implementing ERP software is to automate business functions. However, many companies fail to implement ERP software because they consider it expensive. Unfortunately, they fail to understand the long-term benefits of the ERP system and how it can help them stand out in the market. Therefore, your first step should be to consult an ERP expert and get a detailed understanding of how ERP software can help you increase efficiency and profitability.

Businesses across industries are embracing ERP software for multiple reasons. It helps increase efficiency, enhance productivity, minimize operational costs, encourage inter-departmental collaboration, and get a 360-degree view of the changing customer preferences and market trends. So, businesses need ERP systems at each step.



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