In part one, we learnt about how ERP systems improve efficiency, collaboration and offer robust features for reporting, monitoring and analytics. These features help businesses cut costs and add value in the long run.
In part two, we’ll take a look at how ERP systems improve three major business processes: supply chain management, inventory management and customer relationship management (CRM).
ERPs for Three Major Business Processes
A major selling point of ERP systems is how they transform vital business processes, which often form the core activity of a business. For instance, for a retail business, inventory management is an indispensable part of day-to-day management. Similarly, for a logistics or manufacturing business, supply chain management is crucial. CRM is important to most businesses, regardless of which industry they operate in.
1. Inventory Management
Monitoring your stock in real time can help you optimize storage space and costs. It is also extremely useful in material forecasting. ERPs are great at doing this.
ERPs are great at monitoring inventory in real time, especially when this information needs to be collated from multiple warehouses/locations and shared with managers anywhere in the world.
Furthermore, collecting inventory data in real time allows over a few business cycles equips you to forecast demand more efficiently, as you are able to find patterns in demand through analytics.
2. Supply Chain Management
ERP systems allow you to improve supplier relationships by tracking contracts, renewals, deliveries, payments and even managing and assessing supplier performance, so you can make sure that poor supplier relationships don’t end up costing you time and money.
With an effective ERP system, you can also analyze your supply chain in depth. What kind of supply cycles does your business go through? Which suppliers are able to deliver when and where? What are the common issues in your supply chain and most importantly, what’s the reason behind them?
Collecting and analyzing data on your supply chain will allow you to identify the underlying causes of inefficiency and weed them out.
3. Customer Relationship Management (CRM)
Most businesses today understand the importance of CRM, which is why most use specialized software for it. However, a major drawback of using a separate CRM software is that it fragments different business operations into different workflows, which can be painfully hard to integrate with one another.
For instance, many businesses use popular software like Salesforce or Hubspot for CRM, Quickbooks for accounting and a few other software for HCM, SCM, etc. This can create a mess of workflows, integrations and fragmented data. Not to mention, the costs and training resources spent on mainting all these can add up over time. Why use so many different software when just one ERP system can do it all?
ERPs allow you to keep all your customer records in one place, meaning that you can manage all your customer relationships in one place. All your marketing efforts can be tailored based on the data you collect yourself. Over time, this will reduce your marketing costs.
Furthermore, your CRM data is integrated with your financials, inventory management and SCM data by default. This allows you to collect complex and granular data, which produces powerful insights through data analysis.
Interested in learning more about how ERP systems can help your business? Let’s schedule a meeting!