Businesses are realising the necessity of using an enterprise resource planning (ERP) system in order to gain an edge over their competitors. This has resulted in a rising demand for ERP software, so it’s unsurprising that the global ERP market is expected to be valued at more than USD $97,000 billion by 2024. 

But before you implement an ERP system in your business, it’s important to understand how it works so that you know what to look for in purchasing your ERP solution and how to integrate it smoothly within your existing systems and technology.

Why you should utilise an ERP system (and why other businesses are doing it):

• • It’s cost-effective – While an ERP system admittedly has a big price tag, its return on investment outweighs the initial costs and efforts of implementing it. It allows businesses to scale without needing any additional staff, logistical efforts, or multiple (and often redundant) systems.
• • It boosts collaboration and productivity – It creates a central database that encourages staff to collaborate in a data-driven environment.
• • It provides more accurate analytics – Because an ERP system collects and stores data, it can be used in business analytics and reports, reducing the time and human effort in compiling and researching information.
• • It optimises production planning and resource management – It manages product inventory and manufacturing, allowing staff members to maximise production schedules, equipment, and labour.

Enterprise resource planning is also growing in relevance today because it can be used in any type of business from any industry. The top consumers of ERP software include:

• • Professional and financial services
• • Distribution and wholesale
• • Public sector and nonprofit
• • Healthcare
• • Retail

The use of ERP systems isn’t limited to big corporations either. Statistics show that 96% of emerging businesses that are succeeding in their respective industries use ERP solutions. Using enterprise resource planning software allows businesses to adapt and succeed in a globalised and technologically advanced world.

What is enterprise resource planning (ERP)?

An enterprise resource planning system allows a business to use a suite of integrated applications to streamline and automate processes, track and plan resources, and centralise business databases.

An ERP system is the glue that binds all the systems within your business together. Each department will have its own system to achieve its goals and tasks, but that doesn’t necessarily mean these systems are easily available to other departments in the organisation. 

Using ERP ensures that all systems are accessible through one application with one interface. This allows your staff to communicate and collaborate with each other more efficiently, as different departments can share information more easily with each other. 

Why your business needs an ERP system

Because an ERP system connects all your departments, it can function in several ways, encompassing different areas within your business such as:

• • Finance and accounting – It can assist the accounting department in transforming financial data into comprehensive reports and forecasts.
• • Human resources (HR) – It enables the HR department to record and track employee information and monitor key metrics for their performance.
• • Supply chain – An ERP system can provide important information to optimise inventory, prioritise orders, and minimise supply chain disruptions, ensuring a smooth process of delivering products from supplier to the customer.
• • Manufacturing – Automated processes can help manufacturers manage resources in real-time while optimising cost management and production planning. 
• • Commerce – It provides a seamless shopping experience for customers by utilising artificial intelligence (AI) recommendations and omnichannel solutions.

Depending on your industry, your business may not necessarily have or need all these functions, but you shouldn’t let that stop you from considering implementing a good ERP system that will cover you if your business grows or if you partner with other organisations in the future. 

There are three signs that indicate your business needs an ERP solution:

• • Current basic systems and processes are limiting your ability to scale the business
• • Incompatible systems are causing interdepartmental barriers
• • Customer expectations are becoming harder to meet

Some of your staff members may be reluctant to shift to ERP software, thinking it might be more work or too difficult. You can rectify this by scheduling a demo so that you and your team can get a feel for things and see how it works, which will also better prepare the entire organisation for the overall ERP system implementation.

Your chosen ERP system should be able to integrate different areas within your business (i.e. finance, human resources, manufacturing, etc.), and also be able to connect and share data across different applications through a unified system. If you are currently using Microsoft within your organisation you’ll want to find an ERP that allows you to smoothly transition, like with Microsoft solutions.

Look for a platform that is adaptable, allowing you to customise and integrate your solution with other apps, especially as you continue to grow your business.

3 Microsoft Dynamics 365 apps that provide ERP solutions for your business

When your enterprise resource planning system provides the right integrated solution, it improves your overall business efficiencies. Microsoft Dynamics 365 is able to address three key areas with its ERP solutions.  

1. Dynamics 365 Business Central

Microsoft Dynamics 365 Business Central is a business management solution that easily lets you upgrade entry-level software and legacy systems (i.e. outdated technology that still meets its original purposes but won’t allow for growth), letting you and the rest of your team transition to a more efficient system. 

The cloud solution ensures business continuity, connecting teams, from finance and HR to operations, sales and service, boosting communications and maximising workflow. Dynamics 365 improves performance because it encourages faster reporting, cycle times, and financial closes.

It also provides insights by predicting sales using historical data, allowing you to maintain inventory levels and tracking sales progress with more efficiency and get ahead to meet demand.

2. Dynamics 365 Finance

Microsoft Dynamics 365 Finance prioritises financial risk management and reduces fraud attacks to protect your finances and your staff.

Dynamics 365 Finance features AI-powered insights and embedded analytics to help you automate time-consuming tasks in accounting and finances. It develops comprehensive, real-time financial reporting, allowing you and your staff to direct resources towards the most optimal outcome. 

Being able to track your financial data and performance (e.g. revenue, costs, profit) allows you to create more accurate forecasts, better preparing you for disruptions and unforeseen events, ensuring your business stays agile and adaptable.

Dynamics 365 Finance further improves financial operations within your business by minimising unnecessary costs and optimising business spending with the use of process automation. This boosts the business cash flow as there’s stronger budget control and financial planning in place. 

3. Dynamics 365 Supply Chain Management

Running a well-managed supply chain can reduce your business costs while boosting profits and customer satisfaction. When it’s inefficient, it can significantly impact many, if not all, aspects of the chain—from idea creation to the marketing of the final product. 

Supply chain management involves coordinating procurement, suppliers, manufacturing facilities, retailers, distributors, and customers as they move through the production, sales. and buying cycles. This involves active supervision because so many external factors can impact your supply chain. 

With Microsoft Dynamics 365 Supply Chain Management you can have an intelligent and adaptable supply chain. It starts by connecting your equipment on the factory floor to production resources with sensor data intelligence, using Internet of Things (IoT) notifications to inform you about production delays, product quality, and equipment downtime. When there are disruptions or changes, supervisors can utilise planning optimisation to reassess production and pending tasks in less time.

This accelerates response time to quality issues, changing specifications, and obsolete parts, enabling you to build agile factories and manufacturing processes with predictive technologies, IoT, and mixed reality.

Dynamics 365 Supply Chain Management also performs proactive equipment maintenance to reduce equipment downtime, improve overall equipment effectiveness, and maximise their longevity.

Utilising an enterprise resource planning system allows your business to become more efficient, encouraging your team members to collaborate with each other, and access the organisation’s systems in one interface. If you’re ready to take your business to the next level with an ERP solution, give us a call now.