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Benefits of ERP System: How ERP Can Improve a Business Efficiency

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The modern business landscape is highly competitive. New companies that are eager to declare themselves loudly enter the market daily. New commercial concepts arise at a similar rate. Everyone strives to be the first and not to miss the opportunity to realize their ideas. But, unfortunately, not many people think about optimizing the company’s business processes and begin to incur significant losses, sometimes without even noticing it.

One of the established cornerstones to success in such an environment is understanding the benefits of ERP system (enterprise resource planning system) and principles of its efficient implementation. Though the concept itself is nothing new and was developed continuously since 1960th, the last decade saw its rise to prominence. Successful managers of the world’s leading companies constantly monitor future trends in ERP systems and implement them with appropriate flexibility. Let us figure out how ERP can improve business efficiency.

What Is ERP and How Does It Work?

The current revision of the enterprise resource planning methodology results in integrated software that can aid in managing all types of processes related to manufacturing and resource distribution inside and outside the company. The main tasks of ERP systems are the coordination of the main functions of financial management, human resources, supply chain management, production, sales, and accounting.

The range of coverage for today’s ERP systems is enormous. Moreover, they can be integrated with customer relationship management (CRM), professional services automation (PSA), and other software products employed in the company to create a unified ecosystem.

Benefits of ERP System

Below we list the core benefits of using ERP systems.

Expanding the accountability of business:

  • Get real-time reports and forecasts;
  • Use a unified database for all business processes.

Improvement of customer service:

  • Instant access to the exhaustive database about customers;
  • A quickest possible response to client requests;
  • Timely deliveries;
  • Reduction of possible errors when processing the orders.

Increasing the inventory cost:

  • Accurate inventory planning;
  • Reduced overhead;
  • Shorter lead times.

Increasing the speed of cash flows:

  • Increased speed of invoicing and funds collection;
  • Faster and more accurate allocation of funds.

Saving costs:

  • Improved inventory management;
  • Enhanced efficiency of procurement management;
  • Increased customer focus;
  • Improved effectiveness of supplier relationships.

Enhancing the security:

  • High reliability of security resources;
  • Reliable prevention of malware;
  • Data backup and distributed storage.

Improving the business processes:

  • Automation of many routine and manual tasks;
  • Introduction of intelligent, adaptable workflows;
  • Increased efficiency.

Improving supply chain management:

  • Better forecasting of demand and lean allocation of stocks;
  • Elimination of weak points in production;
  • Improvement of business transparency.

Future Trends in ERP Systems for 2021

One of the main pillars for improving ERP systems is the best trends from the world of IT technologies. Today, these systems already employ voice recognition, natural language processing, machine self-learning, etc. However, IT’s subsequent development promises even more incredible and very effective implementations and improvements in such systems.

Cloud Deployment

Keep in mind that depending on the scale and reach of your business processes, both developing the system from scratch and adapting one of the numerous existing ones, ERP cost can be quite exorbitant.

Organizing and maintaining a local infrastructure capable of hosting any capacitive software as complex as an ERP would require additional sizable funding. Not to mention that such hardware systems cannot be easily down- or upscaled. Another difficulty lies in organizing the remote access to facilities, most important in times of epidemic.

The solution to this problem has been found in recent years and develops steadily and surely. This is cloud hosting. Modern platforms such as Google Cloud Computing, Microsoft Azure, and Amazon Cloud Services are developed to support such a scenario. Moreover, container virtualization and elastic computing allow increasing or decreasing the provided computing resources in real-time depending on the load, reducing the costs to a minimum.

Artificial Intelligence

We are pretty far away from developing the AI capable of individual thinking. Nevertheless, even the current implementations of the artificial intelligence concept can analyze vast amounts of data, discover viable trends, and make robust, based predictions. In addition, self-learning routines can automate many routine tasks and at the same time reduce or eliminate the number of mistakes attributed to the human factor.

The main focus of connecting an artificial intelligence engine to an ERP system is to simulate human cognitive functions such as problem-solving and learning. This dramatically speeds up decision-making. For example, as one of the key ERP functions, accounts payable can be automated, leading to increased productivity.

Internet of Things

The integration of IoT-capable sensors and other devices to ERP assists in the collection and assessment of vast amounts of performance and manufacturing data in real-time. This allows eliminating the need for manual data entry and automating complex business processes based on intelligent data processing methods. Leading companies today are targeting ERP systems that can very well interact with the network and make the most of the IoT.


Manufacturing ERP software and systems are already being widely introduced to plan, manage and operate manufacturing business processes at modern factories. Innovative manufacturing ERP systems are highly flexible, support integration with third-party software, and allow creating complete and solid business management platforms.

Current ERP systems help manage production, increase organizational efficiency through balanced resource allocation, and optimize consumption without compromising product quality and productivity. Such software is indispensable for any enterprise striving for the top in the volatile and highly competitive market.

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