You may have heard the term ERP flying around with regards to business success and management. But you might not know what exactly is drawing small and medium business to implementing ERP. We outline how ERP is used in businesses of all sizes, and why you should consider it too.
So, what does ERP mean?
ERP stands for Enterprise Resource Planning and is a form of software implemented to manage and ensure the day-to-day aspects of business activity are running. ERP software combines various parts of business processes into one single software, allowing businesses to better streamline and have visibility of the business’ state.
ERP acts as financial management, helping business owners to track growth, manage budgets and ensure appropriate payment of staff. It helps businesses manage a holistic approach to the success of the organisation and implements the four elements of financial management to keep your business on track.
ERP makes organisation seamless, and when businesses pair it with the four elements of financial management they have more time and more resources to focus on the business itself.
How ERP is used in business – the four elements
Planning: Before you start with any process it is essential that you plan your financial management in a way that aligns with your business goals. If you are looking to expand and grow the company you need to know how the budget, costs of running the business, and staff will lead to this goal. Plan all processes and elements of your organisation that have a role in finances and business growth.
So, you know your business goals – but is this consistent across the organisations? If you have multiple staff, KPIs or roles, you need to control how that role impacts the overall goals of the business. If tasks are designed to just go through the motions, you may need to restructure them. Communication and visibility will help you work out how to control the goals of the business paired with the work that’s occurring.
Organising and directing
Once you know the elements of your business and how they align with your business goals you will need to start organising and allocating roles to the appropriate staff and systems. This refers to all the resources and materials necessary to get your financial management systems on track – and includes the best possible software for the job. This aspect is usually done during the planning and controlling process, so you can ensure no element is missed.
With every plan and problem, you will want to investigate all opportunities, alternatives and possibilities. As you map out what exactly your strategic plan is, you can start to make conscientious decisions based on your understanding. Make sure you confirm and decide on every part of the planning and organising process at the same time as your brainstorming, so you have all decisions laid out ready for implementing.
Implementing your ERP processes
When you understand your business goals you can start establishing processes and roles that can help you reach them. As the expert in your industry, you’ll be able to determine this effectively, however, the financial management can get lost among BAU. This is where ERP software comes in. Creating a system that has all data, resources, communication and processes will help you better maintain seamless management of the entire business, which is exactly why so many businesses are careful when choosing the right software.