Enterprise resource planning: the perfect business solution?

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A confident management team is essential when important and appropriate strategic decisions are required; the ability to identify and avoid potential future problems is also vital. Relying on guesswork, or inaccurate figures, is rarely a tactic for anything other than disaster, and a lack of clarity within businesses is part of the reason why 986 businesses close down each quarter in the UK.

Increasingly, managers are turning to enterprise resource planning systems to stay fully in the know about the business, and its current strategic position. ERP solutions are comprised of a single, unified system that spans the entire company, with specialised modules that can be accessed and utilised by the different departments. The key benefit to this setup is that data can be accessed and shared in real time, in a completely automated way.

This kind of enhanced data flow can foster good decision making in any company. A system can quickly produce important reports and analysis that is needed to influence decision makers, and help them to strategize based on hard facts. As the systems have a single, shared database at their heart, data duplication issues are eliminated, meaning that figures are more reliable. Communication across the company can also be greatly improved, which has various knock-on effects. As an example, customer service standards can be boosted, as staff can instantly access data about specific orders, and view real time stock levels, to provide customers with precise delivery estimates.

ERP systems are future-proof, and can make full use of the benefits of cloud technology by removing the need to run in-house servers. At one stage, security concerns were seen as the major risk when moving to the cloud. New research shows that times have changed, however, with Compuware finding that businesses are now more concerned about drops in performance, and reduced control than security. Despite predictions that cloud technology will become the new standard, only 12% of current ERP investments are for cloud-based solutions, according to Panorama Consulting research, which may indicate an opportunity for forward-thinking businesses to get ahead of their competition. The Compuware research says it’s only a matter of time before companies shift to the cloud, with investments in that area ranked as the key IT investment priority for the next five years. 16.5% of the companies surveyed placed it at the top of the agenda.

While the benefits enterprise resource planning systems offer cannot be disputed, many companies are choosing to delay the decision, or continue relying on their existing set up of various isolated, clunky systems. The costs and disruptions associated with ERP implementation are commonly cited as the reason why companies avoid upgrading – and these can be high – but Panorama Consulting research shows that they are dropping, with average time to recoup the implementation costs falling from 32 months to 25 months over the last four years. In reality, waiting to update a system is rarely advisable – even for small companies. Acting early will ensure systems are unified as quickly as possible, and that the business can grow in a streamlined, efficient manner. The systems are also highly scalable, making upgrading and improving them easy as the business grows.