It’s likely that if you’re in the business world, you’ve at least heard of enterprise resource planning (ERP). Even if you don’t know the specifics of how it works, you probably know that it’s intended to help organizations become more efficient and productive. These are two of the most important aspects to increase the profitability of a company. Here’s how to convince your boardroom to adopt ERP for your business.
What Is ERP?
Before you convince anyone of anything, it’s essential you have a firm understanding of the idea’s underlying principles. The basis of ERP is that it integrates various departments and aspects of an organization—such as distribution, payroll and project management—onto one user-friendly platform.
There are two overarching types of ERP systems: on-premise ERP and cloud ERP. On-premise ERP is run through local hardware and requires a dedicated IT team, which typically makes it only available to larger organizations. On the other hand, cloud ERP software is a subscription-based service run over the Internet. Since it requires less upfront cost, it can be viable for smaller businesses than on-premise ERP. There are various advantages that come with switching your business over to ERP.
Get Greater Data Insights With ERP
One of the greatest benefits to ERP is that it affords organizations greater data insights than available with lesser organizational platforms. This is because ERP integrates inter-departmental and inter-regional information onto one system, which allows for an unprecedented level of analysis. Companies that do the best job pivoting or altering operations based on actionable data have a competitive advantage.
Cloud ERP software gives businesses, even more, tools for collecting and using data. For example, a manufacturing company can track efficiency at every point along an assembly line by having workers use cloud ERP-enabled devices. Real-time data from cloud ERP services lets managers make smarter, targeted decisions.
Lower Expenses With ERP
Another aspect to ERP that can catch the attention of board members is the fact that it can help companies lower their expenses. ERP does a lot more than just organize departments and collect data. It’s specifically designed to help businesses save money. Enhanced decision making through data is just one of the many ways ERP does this.
ERP can actually automate a lot of business tasks, especially those related to accounting and human resources. Lowering the need for personnel is one way to inherently decrease expenditures. Cloud ERP software can further lower labor costs because it doesn’t require as large of an IT team as on-premise ERP. Most technical issues can be quickly resolved through the provider’s customer support team.
Cloud ERP can decrease expenses compared to on-premise ERP in a few other ways. First, it doesn’t require as much of an initial investment in terms of hardware. An on-premise ERP needs to be run through a local server, which can be expensive to build and maintain. Cloud ERP is done online, so the servers are operated by the service provider. Cloud ERP software also allows for much smoother scaling. Since it’s based on a subscription service, companies can just increase or decrease services when they need them. This is perfect for seasonal businesses, or organizations that are experiencing rapid growth. If there’s one thing that should get the attention of all board members, it’s a service that can lower expenses.
Switching to an ERP system is a big decision for any business, but it’s also one that can pay off in huge ways. Depending on the organization, migrating to a cloud ERP can also be hugely beneficial. Keep these concepts in mind when think about how to convince your boardroom to adopt ERP.
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