What is an ERP system and why would you need one?

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Amy Hardison White
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Managing a growing business can feel like continually busting at the seams. Every time you get used to a new process or tool, suddenly it can’t accommodate your business’s needs anymore. So you start investigating new options, choose one and roll it out. Then the process repeats several months down the line. For every department in your company. What gives?

If this struggle sounds familiar to you, you might benefit from an ERP, or enterprise resource planning system. ERP systems bring together the management of many standard business processes in one unified software platform. Imagine pulling together all your sales, marketing, human resources, customer care, and inventory management functions - just to name a few - into one tool.

ERP systems are effective in that they help you manage your business to drive visibility across the company. If you only have a handful of employees and are managing everything in spreadsheets, you might wonder: why should I invest in an ERP? Think about it this way: take the number of customers you have today, and multiply that number by 25, 50 or even 100. How feasible will it be to manage your business when customer growth expands?

Here are a few indicators that you may want to evaluate an ERP in the near future:

  • Critical information about your business is difficult to come by. When requests come in for sales projections, gross margins, available inventory, invoice aging, or qualified leads, how long does it take you to access this information? Do you have ready access to a dashboard of metrics, or do you need to log into separate tools to pull data, or even ask an employee to run a report for you? ERP systems unify the operations of many business divisions, making it easy to access critical business information at a moment’s notice.

  • Your departments all use different tools and are completely siloed. Here are a couple common scenarios: the sales team is selling like gangbusters, but the warehouse doesn’t have enough inventory to fill orders. The accounting manager is having trouble getting invoices paid, but the customer service team doesn’t know and continues to provide service as usual. Maybe the sales manager has ramped up on hiring when marketing hasn’t generated enough qualified leads to warrant additional hires. Or customer satisfaction is slipping because of repeated inquiries to sales, accounting and customer service, none of whom have the answer they need.

    Without information flowing freely between departments, your business can lose time, resources, and customers. ERP systems, when implemented carefully, can insure that each department can make informed decisions based on what’s happening throughout the company.

  • Your IT team spends a lot of time supporting all your tools and processes. Let’s say you are beyond just spreadsheets, and your IT team has built several internal tools to help the company function. Not only has IT built those tools, but they’ve also attempted to solve the visibility issue by building integrations for each tool. Your internal stakeholders likely ask for new functionality on a regular basis, which has to be scheduled with IT. With that new functionality comes development, bug fixes, product releases, and the accompanying updates to the integrations.

Rather than using your costly IT resources to manage all these disparate systems, you can optimize their time by asking them to support one platform: an ERP.

Keep in mind that ERP systems are not just for huge companies. Some ERPs target small to mid-sized businesses, while others focus on specific industry verticals like oil & energy, manufacturing, and associations.

And remember: even if you bring on an ERP system, you don’t have to remove all the tools your business is using. Many ERP systems offer integrations with a variety of platforms. Data flows both ways - into the ERP and back out to the supporting platform.

What ERP platforms would you like to see Invoiced integrate with? Drop us a lineand let us know.

Amy Hardison White Avatar
Amy Hardison White
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