4 Business Problems an ERP System can solve
Read this article to know why you should consider upgrading your company Legacy systems to ERP systems. See the problems that ERP systems solve and why it is important from a business perspective to use these systems.
Enterprise resource planning (ERP) systems are software packages employed by organizations to manage and even restructure day-to-day operations. The software packages are cutting-edge technologies and are becoming increasingly more common in their implementation, as they effortlessly outperform legacy software in a multitude of ways. Legacy operation systems become less and less effective the larger a business grows. Conversely, ERP systems become more efficient and valuable in the services they provide as organizations ramp up their expansion efforts.Problem 1—Legacy Systems Are Inherently Less Inefficient
The vast majority of software-based business solutions were developed decades ago—well before the widespread adoption of ERP systems. Because of this, many businesses cling to ageing and increasingly irrelevant software solutions that in the real world cost more than they end up saving. What this means for businesses
There is an enormous difference in efficiency, feature sets, ease of maintenance, and productivity between ERP software systems and legacy systems. This creates a remarkable disparity between the businesses that have adopted the former and those that cling to the latter.
Legacy systems create a bevy of nuisances in the workplace. They lack flexibility, grow increasingly difficult and expensive to maintain as time (and the market) moves forward, and perhaps most concerning, are enormous red flags for the current generation of workers. Legacy systems immediately let potential candidates know that the companies using them are resistant to change, less efficient in their operations, and aren't willing to take potentially profitable risks. In response, they will move on to more forward-thinking businesses, and leave those reliant on older systems at the bottom of the barrel. In addition, legacy systems are infamous for their mishandling of data structures and packages, leading to data inaccuracies and inefficient operations. How ERP systems remedy the issue
ERP systems take each of the previously mentioned issues and turn them on their head. In other words, ERP systems are easier to maintain; exponentially more flexible; and will signal to younger, more tech-savvy workers that the business is forward thinking and is success minded.
Businesses have two options when upgrading their software—upgrading legacy systems or completely replacing those systems with an ERP system. The upgrade process will yield enormous improvements in terms of data quality and ease of maintenance, but it will still be contingent on older software for proper functioning. Replacing that system entirely with a new ERP system will have all the aforementioned benefits plus a more modern and workable foundation. The downside is that the process is lengthy, resource intensive, and will affect business operations over the short term. Problem 2—Business Processes Are Drastically Slower
The processes that form the foundations for businesses in the digital age are drastically different those from only a decade prior. Planning software that was once scalable and efficient is now a liability in the long-term and jarringly inconsistent. This change stems from the fact that companies in the digital age are much, much larger than they once were. Accounting for this shift in size requires consistent and mindful restructuring, as the nature of the market continuously ebbs and flows. What this means for businesses
In business, expansion and growth only carry a positive connotation if the company experiencing them is prepared for the changes that come with them. An increase in size brings a tremendously increased strain on resources and finances. In accordance, processes and productivity strategies that once seemed to be catch-all solutions quickly devolve into inefficient wastes of resources and energy. How ERP systems remedy the issue:
ERP systems make transitioning from a small to medium-sized business into a large one a significantly more streamlined process. They do so by simplifying and automating everyday operations and transactions and bringing them to the appropriate scale by way of algorithms and reactive application interfaces (AIs). ERP systems will do so in a locale-conscious manner as well – the software networks can easily adjust operations based on regional or location-based restrictions.
Operations will also become significantly more user-friendly. This is a benefit that can make positions and roles previously inaccessible to workers with less training into ones that are easily understood and actionable, thereby speeding up processes. It also enables users to easily adapt to new business processes as the need arises.Problem 3—Complying with Laws and Regulations Is More Difficult
With expansion comes an increasingly large area of operations. In many cases, rapid development will lead a business into a locale with an entirely new set of laws, regulations, and mandates that need to be followed. Legacy systems are infamously lacklustre in their handling of these guidelines—ERP systems are not. What this means for businesses
When thrust into new territories, businesses with previously sanctioned operations may find themselves in violations of some local laws or guidelines. Legacy systems necessitate an exhaustive amount of resources and time in order to be reconstructed to comply with these new guidelines.
In the worst-case scenarios, restructuring legacy systems will be too little too late, as hefty fines and penalties will have already been put in place. In most cases, penalties will result in time-consuming and costly government audits—even lawsuits aren't out of the question in the case of larger infractions. How ERP systems remedy the issue
By switching to an ERP system, a business can guarantee that their operations are configured to fit with a vertically structured industry, or one that is more equipped to account for local and national regulations reflexively. ERP systems achieve this through extensive automation, a factor that vastly increases productivity and drastically reduces the likelihood for error. Problem 4 — Accessing Data is Significantly more Complex and Cumbersome
Any large-scale business that is run efficiently will have vital data organized into the systems of multiple departments. A fundamental aspect of an operations software system is the ability to quickly communicate between multiple departments, sending and receiving vital data throughout, while still adhering to an overall structure. Legacy systems make this process far more muddled and complex than it needs to be, where ERP systems effortlessly expedite – and even improve – on the mechanism.What this means for businesses
What is meant by "complex and cumbersome" is the process by which older systems spread out each department's vital information. These physical, often information technology (IT)-based, infrastructures needlessly place limitations on the efficiency and output potential of both staff and third-party providers. How ERP systems remedy the issue
ERP systems remove this nuisance entirely by employing modern, cloud-based solutions in the place of costly IT infrastructures. By integrating with cloud systems, resources are saved and efficiency is increased exponentially. ERP systems consolidate the company's data into a central location, providing one source of data for accurate and efficient operations.Wrap-Up
ERP systems are the software solutions needed to take a rapidly expanding business to the next level. They eliminate all of the issues mentioned throughout the article while simultaneously providing an unprecedented amount of new features that increase functionality, operations, and long-term viability. For any business hoping to compete in the digital era and beyond, ERP systems are essential as far as software solutions go.Get expert, and impartial help with your ERP project
Impartial software selection firms, such as technologyevaluation.com, helps companies recognize their core business requirements, and guide them through the selection process. Technology Evaluation Centers offers businesses a unique approach to software selection: with their unrivalled level of industry knowledge and expertise, enterprises are able to confidently select the solution that perfectly aligns with their business.
