The Importance of ERP for Your Business

The modern ERP system is often described as the “central nervous system” of the enterprise or the “foundation for digital transformation.” 

And for good reason. 

See, ERPs offer a single platform for integrating data and processes across the entire business. And – it’s that particular quality, unity, that sets it apart from other IT investments, making it essential for any organization planning on sticking around in this complex and cutthroat digital landscape.

In these next few sections, we’ll talk about why the ERP deserves that special place in the stack — and what that means for your business in practical terms.

ERP’s Role in the Business

While they might still be best known for their accounting, finance, and operational capabilities, the fact is, ERPs have long since outgrown these fixed limitations. 

Today’s ERPs support the entire business. 

Yeah, they still power that “finance and operations” core, but they also support marketing, IT, customer service, HR, sales, and even the external partners and collaborators businesses rely on to fill capabilities gaps and respond to changing demand.  

Modern ERPs represent the “glue” that binds together all systems, departments, people, and portfolio brands under one digital “roof.”  

They capture, unify, and standardize data, and integrate processes across the entire business. So, any change made anywhere within that connected digital ecosystem is reflected across all connected apps and data sources. 

That way, all users — regardless of which team they’re on or what apps they’re using — work from the same version of the truth. 

ERPs also automate and streamline tasks spanning inventory, project management, sales, manufacturing, and more.

The point is, without an ERP, each business unit would need its own stack to support the tasks, processes, and workflows that define their day-to-day.  In turn, each department would operate in its own separate vacuum — fully unaware of what’s happening elsewhere in their organization.

We now know that businesses can’t work that way.  While everyone has their own role to play, all stakeholders must join forces — aligning around a shared vision, language, and agreed-upon goals. 

How Does an ERP Improve Business Performance?

ERP systems improve business performance on multiple fronts.

For starters, they help orgs understand their business in context. By bringing together information about finance, production, HR, etc., business leaders gain the visibility they need to make decisions on a holistic level. 

Modern ERPs provide a wealth of insights via baked-in reports and AI-driven analytics — transforming mountains of disparate data sets into visually-compelling charts and graphs. This makes it easy for (almost) anyone to understand big-picture trends, predict outcomes, and model just about every possible future outcome.

These enhanced insights help orgs better optimize resources, mitigate risks, and take swift action when opportunities arise, customer preferences change, or the next black swan event catches the entire world by surprise, again. 

So, you might use real-time insights to reallocate your IT resources based on current conditions and eliminate waste centers caused by data silos, duplicate work, and incompatible tech. Or — maybe, you’ll analyze process and workforce data to make improvements that save money, boost efficiency, or improve product quality.

ERPs also empower employees at every level to take proactive action. As an example, they can use built-in reports to check the status of other departments and use that information to guide their next actions. 

Employees might also analyze demand forecasts against incoming customer orders and use their findings to inform decisions about inventory and procurement.

And, because ERPs allow anyone (or, rather, anyone with the right permissions) to access, modify, or share docs and data, they enable more effective cross-functional communication and collaboration. 

There’s a lot more where that came from, but our point is, ERPs are the catalyst for all sorts of improvements — from productivity and efficiency gains to greater innovation, smarter decision-making, and big wins for both customers and the bottom line.

ERP is Just One Part of a Broader Digital Ecosystem

Okay, we’ve already gone over the many ways the ERP serves as both the “foundation” and the “glue” that enables all departments, processes, and digital strategies to function as one cohesive unit. 

At the same time, it’s important to understand that most ERPs aren’t designed to be standalone platforms. Nor should they be expected to deliver any serious competitive edge straight from the box. 

The real value of the modern ERP lies in your ability to build a stack and really make it your own. The modern ERP system might be your “digital foundation,” but it’s still just one part of a broader ecosystem.

Luckily, today’s top solutions are flexible, scalable, and endlessly customizable. 

Just look at Microsoft. Its Dynamics 365 ERP solutions act as this “core,” but they’re rarely the sole solution in the stack. Instead, users benefit most when they take advantage of Microsoft’s other apps and services – the Power Platform, Azure’s expansive selection of cloud services and solutions, Office 365’s familiar productivity tools, and so on.  

Netsuite, SAP, and others follow a similar approach. Users can choose from a selection of interoperable modules — each designed to support a different part of the business.

As an example, Kambukka, a company that makes water bottles, lunch boxes, mugs, and other mealtime vessels combined D365 Business Central, Power BI, and Microsoft Teams with Shopify to unify e-commerce operations with the rest of the business. 

Unifying the entire business allowed Kambukka to automate processes like invoicing and inventory tracking, but it also helped them better understand their customers and spend more time focusing on growth — expanding into new markets and responding to change in near real-time.

Crumbl Cookies, on the other hand, chose NetSuite to help them expand their empire — at an average rate of nearly 50 new stores per month. 

NetSuite ERP allowed Crumbl to shift away from Excel spreadsheets and toward a more collaborative approach to financial planning and budgeting. And — it completely changed the game re: inventory management. 

Now, the company is able to track inventory at a granular level — uncovering opportunities to maximize profit margins and free up more cash.

Final Thoughts

Bottom line: ERPs are the foundational core powering your entire organization — from the back end to the front-line to the C-suite and everywhere in-between. 

Whatever your goal — cost-savings, productivity gains, data-driven decision-making —  you can’t do it without the ERP.

That means, there’s no room for error when it comes to selecting, implementing, and continuously optimizing your ERP. 

Fortunately, Velosio has been in the ERP game for more than three decades. Our ERP consultants can help you find and implement the right ERP and provide the industry-specific solutions and long-term support you need to compete in the future — whatever version we might find ourselves in.

Contact us today to learn more about our ERP services and solutions.