Technology Research company, Gartner describes Enterprise Resource Planning software (ERP) as the following: ERP improves business processes and the use of information across an organisation by integrating functions such as finance, order management and purchasing into a set of interconnected modules.
All clear now?
In simple terms, I would describe ERP as software that integrates all information and processes of an organisation into a common system. Enterprise Resource Planning software (ERP) can provide significant benefits to companies looking to take advantage of improving economic conditions. Improved cash-flow, enhanced financial and business-wide reporting, and a reduction in duplication of data entry are just some of the tangible benefits.
The market for ERP software changed significantly after the financial meltdown of 2008, since then businesses have witnessed a slow, fragile return to growth. Firms now want to see a faster return on investment, and products that are quicker and easier to install and integrate – all features found in Sage ERP 1000.
Deployment of ERP software can have a profound and positive impact on revenues. A sharp reduction in duplication of data and processes, improved cross departmental communication and better financial reporting are just a fraction of what ERP software can deliver, provided that the product is chosen carefully and the deployment and ongoing maintenance are managed well.
An emerging trend in the market is the need for quick to implement, international ERP solutions that support domestic locations, as well as offering strong international features, multiple language and currency support, multiple chart of accounts, all delivered to multiple locations – all features of Sage ERP X3.
Our free whitepaper ERP – building on the basics will help you find out more more about how ERP is evolving to meet the demands of you business.
The benefits of ERP software
Although they can be hard to quantify, the financial benefits of ERP may be realised in many different ways. Some organisations use ERP software to make savings in departmental budgets; being able to compare cost savings with revenue gains, leads to better decision making when setting targets.
ERP systems can also make it easier to identify non-productive areas of the business, allowing managers to move staff to where they can better benefit the organisation. Still more savings can be realised by speeding up the monthly close process, in which a firm’s books are temporarily closed and analysed to produce a set of financial statements that indicate how well the company is performing.
A faster close process allows management information and analysis to be made available sooner, giving the organisation more time in which to analyse the figures before producing financial statements. Full or partial automation of this process by ERP can lead to significant reductions in the close cycle. The boost to business from these financial benefits is obvious. Better cash flow and liquidity is a critically important part of both riding out an economic downturn and taking maximum advantage of the recovery.
The question of compliance
The compliance landscape has become harder to navigate safely in recent years. The last UK government passed record amounts of regulatory legislation and in the wake of the financial crisis the financial industry in particular has been subjected to further scrutiny.
The financial services industry serves as an ideal illustration of the importance of data governance. The crisis in 2008 ensured that the customers of financial institutions are more clear-eyed than ever about the risks they run in investing their money. Trust is imperative and quite rightly, potential customers insist on knowing that their confidential information is safe.
ERP software can help companies re-engineer their business processes to ensure compliance with government lead legislations such as Sarbanes Oxley or IFRS (…to give but a few examples). Sage ERP X3 is particularly strong in helping companies to achieve and provide evidence of compliance with the above legislations through providing comprehensive audit facilities, embedded work flow, field auditing options and strong security.
Positioned for growth
As the economy emerges from recession, firms need to ensure they are positioned for growth and able to take full advantage of the changing conditions. It is clear that the advantages in terms of operational efficiency, financial flexibility and inter-departmental communications offered by ERP systems can provide a distinct competitive advantage to those firms with the foresight and capability to deploy them.
There can be no doubt that ERP software is evolving to meet the demands of businesses both now and in the future. Sage provides a number of solutions aimed at different organisations, taking ERP out of its traditional enterprise environment and making it available to specific industries and niche markets.
Julia Commons, Product Marketing Manager, Sage Enterprise Solutions
Download the free whitepaper ERP – building on the basics; how ERP is evolving to meet the demands of you business or visit our ERP software pages for more information