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Advantages of ERP System

As we know by now, ERP software or Enterprise Resource Planning Software uses the
company’s database of information and centralizes it, then uses it to automate the day-to-
day business processes to simplify the process. This helps in freeing up the time of the
employees so that they can focus on more instinctual tasks at hand.
Advantages of ERP System are-

 Unification of IT costs
Even though purchasing a ERP software license for business is very expensive in one
way, on the other hand, it can be seen as a means to unify the expenditure on IT,
therefore bringing much more efficiency to the table. For example- For a company to
have an IT department, they need to spend resources on multiple number of
systems, qualified staff, infrastructure, support teams and licenses. But if a company
chooses to use an ERP system, all these costs can be unified into one since good ERP
systems (like SAP) tend to provide all the services which an average IT department
might be providing.
 Transparency
Using an ERP software brings a great deal of transparency to the company, by
involving every individual on every important aspect of the business. This allows for
faster and better managerial decision making. For example- One can easily monitor
the inventory levels on a daily basis, including all the consignments that are to be
received and in transit. This allows for better control on the working capital because
there is accurate knowledge of where the inventory level stands.
 Better Reporting
ERP systems provide improved visibility, i.e., better insight into the day-to-day
business processes. This in turn allows for better planning. The senior management
can have all the data they need about the day-to-day business dealing and make
their decisions about the future of the business accordingly. This is very evident
especially in the finance department. Standard financial reports such as income and
cash flow statements generally are built-in, and custom reports can be quickly
generated without IT intervention. This feature alone saves a lot of time for the
management to check the financials which are an integral part of the decision-
making process.
 Customer Service
Like mentioned before, using an ERP system frees up the time of the employees for
them to handle cases of more importance. One example of this would be the
customer service that ERP systems provide. For example- if we look at any
company’s sales department, the sales team maintains a spreadsheet of the
customer dealings in a day and often misses out on the point of maintaining a strong
bond with the customers which is of such importance in today’s market. With the
ERP systems streamlined and centralized systems, sales team will be able to focus on
building and maintaining customer relationships instead of maintaining
spreadsheets. At the end of the day, the number one thing a business should be
concerned about is customer acquisition and retention. Through the end-to-end
tracking and insight offered by an ERP system, you can provide better customer
interaction from marketing automation all the way through late-phase customer
service.

Reference:
Benefits of ERP | A Look at ERP Advantages & Disadvantages (selecthub.com)