6 benefits of ERP systems

30 November, 2022

Reliable employees, a good supply chain system, and an easily accessible human resources portal for the smooth running of your business is essential. Fortunately, advancements in technology have simplified the process of managing a business. Today, we take a look at one software that can prove to be indispensable for you as a business owner, Enterprise Resource Planning (ERP). We will look at what the modern ERP system is and discuss the benefits of ERP systems.

What is an ERP System?

ERP is a software that helps large and small business organisations manage daily operations. Using an enterprise resource planning system simplifies business activities such as accounting, customer relationship management, and supply chain operations, among others. ERP software allows you to plan and manage your business operations accurately. That way, you can track your organisation’s performance and have a better financial planning system in place. ERP also acts as an effective communication tool between various departments of business functions within the same organisation.

Benefits of ERP software

Whether you opt for cloud-based, on-premise or hybrid software, an ERP system can truly simplify your life as a business owner. Here are the benefits of ERP systems:

• Eliminates manual reports
  
  Imagine having to scan through hundreds of physical documents to find out a small piece of information; that is what you’ll be doing without an ERP system. With the help of this system, multiple departments under one organisation can use a single software for submitting reports. Moreover, the software will also analyse heavy amounts of data within shorter timeframes. For example, let’s take a scenario in which you run a travel agency with sales, operations, accounting and customer relationship management departments, and you need to check how each department is performing. You can let go of thick physical files and instantly check the data fed in the ERP system by the respective departments.
  
  

• Reduced operation costs
  
  With the new increased efficiency that ERP brings, you can turn your focus to areas of your organisation that could be potentially profitable. In terms of cost reduction, you can look at downsizing possibilities as ERP automates most of the manual process, fully or partially. This can be beneficial for especially manufacturing businesses. You can free up your best staff from mundane tasks and give them opportunities to add value in business processes elsewhere in the company. By reducing operational costs, you and your employees can survive the market without impacting the quality of the product and services your business offers.
  
  

• Improved communication and collaboration
  
  Two major advantages of ERP are improved communication and better collaboration. With easy and verified access to data, you can plan daily business activities efficiently. Employees have the information they need at their fingertips and can make decisions accordingly. This makes the employees’ lives easier since they do not have to follow up with different departments to acquire information they need. When employees lack information, operations get delayed; however, when they get access to data from other departments, they are able to collaborate with their colleagues seamlessly and stay up to date with the running of various other associated business activities.
  
  

• Better financial planning
  
  Accounting and financial planning applications, too, are a part of an ERP system. You can track your company's financial health by managing the bills of vendors and clients in one single application. Having all important data under one system allows you to analyse accounts, note profits and losses, review financial statements, and make changes wherever required to increase profitability.
  
  

• Improved data security
  
  Protecting your data is the topmost priority of companies that develop ERP software. All data, i.e., business operations, sales figures, and profits and losses are in the ERP system. Thus, this software contains a lot of confidential business information. Although this data is accessible to certain users like managers or department heads, all information is protected in the ERP systems using internal cloud-based data protection components like solid password policies, multiple-factor authentication, software updates and denied installation on unauthorised systems. That way, your data is not exposed to cyber hackers.
  
  

• Improved customer service
  
  ERP software also comes with a Customer Relationship Management (CRM) tool, along with its applications for other departments like sales and accounting. This tool can help your business stay afloat in the face of tough competition. CRM tools give you instant access to customer information, thus making it easier for employees to be aware of and attend to customers’ needs.
  
  

Bottom line

If you want to streamline your business under one system, then an ERP system is just what you need. You will have better access to your company data and can make changes to reduce costs, save time, and increase profitability.

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Read more about the different types of ERP system here.

​​​​​​​*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.