How Enterprise Resource Planning (ERP) Systems Contribute to Data Consistency
Businesses rely on accurate information to run their operations. Commonly, departments maintain separate systems to track their own data, requiring an additional set of reports consolidating numbers across the entire business. To eliminate this step or reduce duplication, companies use an Enterprise Resource Planning (ERP) software system. ERP combines data from accounting, human resources, manufacturing, sales and other divisions in real time. This not only reduces errors in data entry, but it ensures information is reliable, accurate and available to those who need it to make informed decisions about the company.
Reduction of Duplication and Errors
Employees enter information in ERP only once and that data is accessed by others with relevant security protocols. In non-ERP systems, information may come from many sources: vendors, clients and staff across multiple departments. Small errors, such as the inversion of digits in a UPC or an incorrect employee address or spelling of a customer name, can result in inaccurate inventory counts, payroll mistakes and delays in customer order fulfillment.
Reduction of these errors is one benefit of ERP. It ensures increased reliability of information, and therefore, less time is wasted trying to clean up inaccuracies. With one record for each employee, customer and product, it should only take one conversation to make a necessary correction. Since data across all departments updates as soon as a record is entered into the system, fewer hours are lost across the organization from employees putting information into the system.
Benefit of Data Consistency and Accuracy
Key decision-makers in an organization make the best choices when they have up-to-date information. ERP harnesses sales, manufacturing and inventory. With the knowledge of what product has been sold, what is set to be returned to vendors as damaged, what is reserved for pending purchase orders and what is available in the warehouse, managers know exactly how much new stock to order. Numbers updated in real time allow purchasing staff to jump on trends, maximizing sales while a product is hot, without ending up with unsold inventory when the trend finishes.
Businesses use ERP to see where product components are in the manufacturing process. Labor shortages due to injury, sickness or other absences are easier to identify to permit accurate production planning. Customer satisfaction increases because businesses have more information to meet their demands. ERP financial data makes it easier for periodic reporting, specifically because it’s not necessary to consolidate and reconcile possibly inconsistent data from different departments.
Assessing the Need for ERP
Despite the many benefits of ERP, not all businesses receive a significant return on investment by overhauling their existing record-keeping processes. In particular, businesses with only a few employees might be small enough to function well without additional streamlining. However, businesses that plan to grow, or are already experiencing rapid expansion, might need the efficiency provided by ERP in order to be responsive to customers. ERP also helps growing enterprises “act” like bigger businesses, by using integrated ordering and fulfillment processes.
Businesses who decide to investigate the implementation of an ERP system can find resellers that provide industry-relevant customization. After a transition period from legacy systems, many businesses discover their processes are greatly improved, as their data is more accurate and decision-making is better informed. As a staff focuses its time less on data and more on customers, it’s better able to respond rapidly to constantly changing market conditions.