Understanding Enterprise Resource Planning (ERP): The Five P’s

 Understanding what Enterprise Resource Planning (ERP) is and how it can help scale your organization.

November 17, 2020 | by Plytix

Enterprise Resource Planning (ERP) software allows businesses of any size to manage their business from a single source of truth. A cloud-based ERP software provides the ability to manage an entire business from a central ERP system – from stock control to accounts, sales, promotions, reporting, and supply chain management – all wrapped into one area.

To keep things simple, we’ve broken ERP down into five key P’s to remember.

  1. Planning
  2. Productivity
  3. Profitability
  4. Precision
  5. Promises 

Planning

As the name would suggest, Enterprise Resource Planning gives businesses the opportunity to plan both short and long-term. With the right ERP system in place, you’re able to know the profitability around every item in your inventory, your most successful (and unsuccessful) promotions, as well as the performance of staff and suppliers. These answers are provided from reports automatically generated by the data running your selling channels, brick-and-mortar stores, accounting software, and much more! 

Evaluating the different aspects of your business with these reports provides you with data to implement real change. Whether that’s discontinuing items, improving your picking and dispatch process, or perfecting your summer promotions. It also means effectively planning for peak seasons with the knowledge of how much stock, packaging, and staff members you’re going to need for success.

Productivity

It’s been proven that employee productivity increases with the proper use of an ERP system. For most businesses, that means an improved production line, as well as reducing the number of mistakes and duplications made from badly equipped employees or outdated systems. 

As businesses grow, so do the levels and scale of the processes behind them. Getting a well-performing tool in place means your company can scale gracefully, without the hassle of maintaining huge spreadsheets or workarounds. New staff can be easily trained, whilst existing staff can harbor the power of automation to cut their workload in half.  

For small to medium-sized businesses, it’s worth remembering that implementing a cloud-based ERP system doesn’t take up half the time that a larger-scale operation would. Within six weeks, businesses can have their entire operation running better than it ever did before. It will be better prepared for whatever happens to be around the corner.

Profitability

Sticking with old but comfortable systems will normally result in settling for inefficient processes. It can also waste profits due to errors, provide a lack of financial foresight, and create the need to upgrade fees potentially. A well-implemented ERP system typically provides an immediate increase in working capital within the first year. It will provide the opportunity to report and analyze finances, increase transparency with clients, and gain a better insight into company cash flow. 

By removing unnecessary expenses and laborious tasks, businesses are able to utilize the reporting tools that show which services are cost-effective and where reinvestment from savings should be made. While this can mean improved profits, it can just as easily be used to lower costs, maximize quality, and in general, guarantee products and services are highly competitive. 

Precision  

For an operation running across multiple sites, not having a modern ERP system in place can mean a mix of quality standards, as well as different methods across locations. Waiting to move forward with an ERP system because of a lack of time only means the mistakes being made now will amplify. Implementing an ERP system in the earliest stages will streamline total business operations and ensure standardized systems across any number of facilities. That means fewer mistakes, more structure, and consistency across departments.  

Promises

Whether you’re responsible for picking and packing, or you’re the managing director behind a business, an ERP tool will allow you to deliver promises to those who matter the most. Implementing any business management software into your operation means better-equipped staff with accurate information at their fingertips. As a result, your team can deliver on time, every time.

An in-built CRM system will also mean you can keep a close eye on the customers that matter the most. Building customer price lists will also allow you to control the prices for specific groups or individual customers. This means more freedom and flexibility when it comes to making your customers feel valued. 

As a result, employees utilizing modern ERP systems will become better prepared to meet customer expectations and provide an effective omnichannel experience to both customers and prospects. An ERP, combined with a Product Information Management system, such as Plytix PIM, is truly a recipe for modern-day customer success

Curious to learn more? We asked those at the heart of the industry what ERP meant to them. Check out the interview here. 

Khaos Control interview about ERP software

Where to start? At Plytix, we understand that choosing the right tools for your business can be pretty damn overwhelming. And we want to minimize that stress for you. So, download our custom guide and learn everything you need to know about SaaS ecommerce technology today! We’ve included the tools needed to win online and why ERP and PIMs are a valuable investment for an organization like yours. Everything you need to know about SaaS technology and ecommerce

Plytix
Written by Plytix

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