Custom ERP System Development. Part 1

When we hear about the way businesses worked in the past couple of centuries, it’s sometimes hard to believe it was true. For example, paper entirely dominated offices. All documents were only in the paper form, starting from letters to clients and ending with orders. There were no mobile phones or computers. If someone from a department on the second floor wanted to give a message to a colleague on the third floor, they had to walk up the stairs to the corresponding room.

The technological revolution has completely changed business processes and communication. These days, we no longer have to leave our working place to take a message to a colleague in another office room and most business documents are electronic. One of the most significant technological advances for the business world was the invention of an Enterprise Resource Planning (ERP) system. In this post, we are going to give the definition of ERP, explain why it is such a valuable business tool, and in the next part of this article we’ll tell list the reasons why building your own ERP is preferable over purchasing a similar ready-made solution.

What is ERP?

ERP is a software solution intended to automate and streamline the essential processes within a business organization including accounting, data exchange, resource management, and many others. This platform consists of several modules according to the business functions they serve, which are united in a suite with a centralized database. The key mission of an ERP system is to allow companies to receive larger revenues with no additional expenses incurred.

The market is abundant in various prepackaged ERP solutions from well-known and small software providers. ERP systems are gaining increasing popularity among all kinds of businesses. Let’s look at the principal advantages ERP systems offer.

WHY COMPANIES CHOOSE ERP SOLUTIONS FOR THEIR BUSINESS OPERATIONS?

1. Efficient Reporting Capabilities

Since all of the data that various departments in an organization generate is stored in a centralized location, management can easily analyze it and create reports that contain the information required to see if the goals have been achieved or identify any problems at any given moment. No more need to sift through tons of spreadsheets, text documents, or emails in order to estimate the current situation and make strategic decisions. The most widely used reports like a cash flow statement are an integral part of any ERP application, and anyone with access to the corresponding data can generate them. That saves time and money since no help from IT professionals is necessary.

2. Data Integrity and Security

The efficient sharing of business-critical data within an organization is the main reason why ERP systems actually came to existence. Not only do ERP suites help generate data, but they also have elaborate internal data protection mechanisms. With ERPs, there’s a common input system, so there is no need to combine information from separate sources, which frequently causes errors and loss of data. The unified data storage guarantees secure, up-to-date, and accurate data visible to employees and management, but not to hackers or spies from rival companies. Managers can additionally restrict access to data to some of the staff. Finally, the ERP database system is designed to make reserve copies of confidential information that can significantly affect business operations.

3. Better Interaction Between Departments

ERP systems allow employees from any sector of an organization to get access to the most current data whenever they require it, and provide their own data for others to use. This makes collaboration within a company faster and more efficient as there’s no need to manually track data. Operational costs are also reduced as employees don’t have to perform low-level repetitive tasks. Instead, they can focus on what is really important for the financial success of the business.

4. Excellent Scalability

Every business wants to grow. The moment comes when the local market is no longer enough to satisfy a company’s ambitions. It may have to hire new staff, increase its inventory, adapt progressive business practices. All that requires a new level of organization to keep things running as smoothly as before. Otherwise, the plan for growth may simply fail. This is where ERP systems truly shine. They are superbly scalable and can easily grow along with the company. Therefore, purchasing a new solution is not required, which can save a fortune.

5. Improved Consumer Service

As an ERP system contains fresh and exhaustive information about customers, their preferences and purchases, employees from the customer service and sales departments can more efficiently interact with those people, offering them exactly what they need and reacting to their complaints and requests. That helps acquire new customers and retain existing ones, which is the primary objective of any business. In addition, most ERPs are designed to seamlessly work with e-commerce solutions. That allows businesses to better communicate with consumers in the Internet, selling goods online.

6. Modularity and Customization

Modularity is what makes ERPs so appealing to many businesses. Each ERP suite contains a number of separate applications, or modules, and a company can select the ones that could be beneficial for the business operations. All modules can easily work in combination with each other or on their own. Moreover, each module can be customized to specific needs of an organization. The most typical modules included in ERP suites are Supply Chain Management, Human Resources Management, Customer Resource Management (CRM), and Financial Accounting, Applications from independent vendors can also be glued into an ERP system for issue-free operation.

7. Reduced IT Expenses

Business people are always on the lookout for reduced costs. An ERP system helps significantly lower expenses required for the IT support of an organization. That means money to pay for hardware, administrators’ salaries, licenses, and other similar costs. Besides, only minimum training is required for employees since they don’t have to switch from one solution to another: there’s only one application to master.

8. Mobile Access

Most ERPs also offer end-users access to the system from various locations and across various devices. Whether you’re working at your office, sitting at the desk in your home, or waiting at a railway station for goods to be delivered, you can always log in and search the centralized database for any information you need at the moment.

9. Edge Over Competition

The business world is extremely competitive. With the modern technologies developing at such a fast pace, companies can’t afford to stay behind others. Any initial investment in an ERP solution will give you all the benefits listed above and put you at a clear advantage over those who are still using obsolete methods and processes.

In the next part of this article we’ll tell you the importance of custom ERP system building. Why Building a Custom ERP Solution Is the Right Choice?