In the digital age how a company handles its data could very well determine its future. With cloud-based ERP systems, small and medium sized businesses can make smarter decisions and gain an edge over larger counterparts.
Running a business can at times feel like juggling. Between daily operations, book keeping, payments, taxes and managing your supply chain, there are always too many things happening and competing for one’s attention. This is especially true for owners of small to mid-size businesses as they do not have a battery of experts to handle different parts of their business for them.
In such a situation, it becomes hard for businesses to step back and look at the bigger picture. To really understand what the customers expect from the company, what the competition is doing and most importantly how they can improve internally to cut costs and run as an efficient, flexible unit.
One of the most widely used digital solutions to address these issues is the Enterprise Resource Planning (ERP) system. Once considered to be the domain of large multi-national companies, ERP systems are increasingly gaining popularity with smaller firms looking to be the best possible version of themselves.
So, what is ERP?
At its most basic level, ERP integrates the company’s core processes like finance, HR, manufacturing, supply chain, services, procurement, and others into a single system. ERP software is usually designed in modules that focus on essential business areas.
However what distinguishes ERP systems from stand alone business software is a common central database from which the various ERP software modules access information.
This means that companies using ERP not only save time on maintaining records by minimizing double entries as the system shares the data, it also enables greater accuracy and collaboration between the organization's departments.
For example, an e-commerce company with an ERP system in place allows customers to make purchases, pay, and track their goods. After the customer places the order, the system can automatically connect the order management department to the inventory and delivery department. On the business side the orders are processed faster and with fewer errors as the ERP system cuts down on the need for manual data entry at every step and improves the flow of information across the organization.
Why businesses need ERP
Most business owners and managers look to ERP because they are drowning in spreadsheets, manual processes, and conflicting information from disparate accounts. Factor in changing tax laws, and fluctuating market prices and the amount of data that needs to be updated quickly adds up. This is not only messy and time consuming, but also reduces their clarity on what are the most profitable parts of the company and what can be improved.
New ERP systems take business management to the next level. They provide intelligence, visibility, analytics, and efficiency across every aspect of a business. Using technologies such as machine learning, Internet of Things (IoT) and Artificial Intelligence, ERP systems facilitate the flow of real-time information across departments and ecosystems, so businesses can make data-driven decisions and manage performance.
Modern ERP systems not only boost efficiency and help manage complex business processes but also provide better business intelligence and customer service capabilities.
While the value of ERP systems is clear, limitations on computer technology, internet speeds and data processing meant that only large enterprises could afford these. ERP systems in the 1980s and 1990s were not only required expensive hardware and software but also required the additional costs of coding, consultants, and training employees to use it.
Moreover as time went by, many organizations discovered that their data centers running ERP systems would need constant upgrades to increase bandwidth and security patches to ward off cyber attacks.
To address these roadblocks, the cloud or the software-as-a-service (SaaS) delivery model for ERP was created. When ERP software is "in the cloud," it simply means that it is kept on a network of remote servers, instead of at a company’s location. This allows the companies to only pay for the services they require and eliminates the need to purchase software and hardware or hire additional IT staff.
Next-generation ERP
While older ERP systems were often too expensive for small and mid-sized companies, the SaaS model has broken that barrier. Cloud based ERP systems can be deployed quickly and changed for a business’ changing needs.
For example SAP – the world’s largest seller of enterprise software – offers ERP solutions tailor-made for small businesses known as SAP Business ByDesign. Along with managing accounting, orders, procurement etc, SAP Business ByDesign also has the ability to produce overview pages in combination with information-rich data sources and the ability to integrate predictive analytics.
With the government’s “Digital India” initiative in full swing, connectivity has improved and data is now cheaper than ever. This has enabled more and more companies to avail cloud ERP services.
Growing mid-market companies, subsidiaries of large corporations, and local public sector institutions can leverage this connectivity to reduce expensive on-premise data centers by adopting ERP software like SAP S/4HANA. It can integrate all business processes, turn real-time data into actions, and in effect increase employee productivity and enable businesses to innovate and transform.
The sheer volume of data that companies generate, along with the fast changing demands of the modern consumer has made streamlining business processes and optimizing data increasingly critical. In the digital age cloud-based ERP systems are no longer a luxury but a necessary tool for businesses to stay competitive.
Request a personal demo of intelligent, cloud-based ERP software from SAP.