An Enterprise Resource Planning system (ERP) is sometimes thought of as an expensive software system which needn’t be acquired because local information technology (IT) staff can just write the applications the business needs. But an ERP is an example of the old saying, “it doesn’t cost — it pays.” Here’s why every company should have and use an ERP system.

1. One stop financial shopping. ERP software pulls all your financial information together for easy access and reporting.

2. Integration and coordination. ERP software integrates your information, avoiding the need to gather data from multiple, independent systems.

3. Ease of learning and use. ERP software has a uniform look and feel, and similar methods of use across all of its modules. This makes it easier to learn, as it only has to be learned once. It makes it substantially easier to use, with knowledge transferred from module to module.

4. Flexibility. ERP software, with its unified design, adapts to your business as your business grows. Unlike disparate systems, ERP systems are created with growth in mind. Changes are made centrally in a rapid and effective manner.

5. Updates with legal and business climate changes. ERP software is supported by the software vendor, who will provide regular updates as legal requirements change and the business climate evolves. Compliance issues are eased and competitive advantage is maintained without staff being saddled with time-consuming, expensive programming work.

The following case study is a composite of numerous real-life situations and illustrates the problems faced by a certain large corporation struggling to cope with independent financial systems.

Company X had taken pride in the development of their own financial systems. They had a large information technology staff, who had produced separate systems for general ledger, accounts receivable, accounts payable, payroll, human resources, and inventory. The IT staff ran these systems in the Company X data center, and processed change orders when business needs demanded modifications to the systems. Because each change order had to be reflected in each individual system, typical turnaround time for an average change order was about three months from start to finish. Large changes took longer, sometimes six months or more.

Everything came to a head when the company considered flexible work hours, requiring significant modifications to the human resources system, and these changes rippled out into the other systems. The IT department estimated a year of work to get everything ready if overtime wasn’t authorized.

Senior management didn’t understand why this should take so long, and hired a consultant to study the problem. The consultant came up with the only possible recommendation: an integrated, flexible ERP system which would easily handle work schedule variations and much more. It would also take a year to set up, but it would properly position the company far into the future and provide untold additional benefits Senior management eagerly adopted this recommendation.

Integration and flexibility are key in today’s competitive business world. An ERP system uniquely provides these advantages, and every business should be using one.

Find out more about ERP