Currently, ERP system are widely applied in businesses. This system helps businesses to solve tremendous management problems. Follow this article to learn more about the ERP solution and business management.
What is an ERP System?
ERP software system helps businesses save time in the management of operations, projects, human resources, and other resources. Instead of manually monitoring tasks, businesses can use ERP softwares to automatically manage and implement processes in the most efficient and accurate way.
ERP - business management system
>>>> Read More: 15 best ERP software for Small and Medium businesses
Benefits of applying ERP system in businesses
Using an ERP system in businesses generates different benefits:
- Manage business on one application: This system acts as the data center that operates businesses’ information management on a daily basis. Because the data is updated in real-time, managers can immediately capture business activities instead of waiting hours for reports.
- The ERP system includes modules such as ERP accounting software, ERP inventory management, etc. to help unify and optimize all activities in the enterprise.
- Enhance efficiency in inventory management: ERP system will help businesses determine the optimal stock level, thereby reducing redundancy and related costs.
- Boost employee performance: The automation in ERP systems help significantly eliminate manual business processes. Therefore, personnel can focus on important tasks to increase revenue.
- Improve collaboration: Within a business, the effective collaboration will bring high efficiency. ERP helps businesses build a positive working environment through communication, sharing, and collaboration to improve work performance.
- Improve accounting accuracy: Separate accounting software forces users to manually enter data. This leads to errors with unintended consequences, time-consuming, and ineffectiveness. ERP software, with transparent and intuitive data displayed, saves considerable time in the data entry process.
- Make management decisions faster thanks to in-depth analytical reports: ERP systems promptly provide reports in all areas of the business such as administration, human resources, sales, production, accounting, etc. Besides, information is arranged logically, intuitively, and transparently through the Dashboard. Therefore, managers can capture the overall picture for better development strategies in the future.
Components of an ERP system
Enterprise (Enterprise)
Enterprise (Enterprise) is understood as an economic organization, owning assets and own name. These enterprises have fixed transaction offices and are granted business licenses in accordance with the law. The ERP system will link departments and functional parts of the enterprise to integrate into a single computer system. In addition, this system also helps businesses easily access and use, control work within the limits of their rights.
Resources
Resources (Resources) of the ERP system include factors such as: Finance, human resources, physical resources, software resources, hardware, and data that users can access and use. When businesses choose to build ERP into operation, it must mean turning all resources into resources, for the purpose of:
- All departments and divisions in the company can make the most of all resources to serve their working process.
- Develop a plan to exploit the enterprise's resources in the most effective and optimal way.
Monitor and update regularly, quickly and accurately information about enterprise resources so that administrators can easily optimize.
Planning
Planning is understood as the ability to build business strategies of enterprises. With strategic planning, businesses can make forecasts, calculations, production planning, purchasing, supply, ... in a scientific and effective way. This also limits errors that occur in the business process and strategy implementation of the enterprise. The features of modern technology solutions ERP can replace individual software such as accounting software, human resource management, warehouse management, customer care...
ERP system is an optimal solution for business efficiency
When to apply an ERP system?
Different businesses will have different stories. They face numerous difficulties and challenges to operate and develop. If businesses are experiencing some of the following problems, they should better consider an ERP Business management software to solve the problems:
- Spend too much time on an activity that can be automated and streamlined;
- Struggle to access needed data for proper decision making;
- Partner with global vendors and third-parties;
- Use separate software tools and processes without linkage;
- Confuse with the amount of inventory;
- Encounter poor collaboration and information sharing within the business;
- Have problems with remote accessing business information and data;
- Suffer difficulty updating regulatory changes;
- Fail to proactively identify and fix issues.
Facing these issues, a business should immediately look for an ERP vendor. ERP systems will help businesses solve problems that exist in the process of management and operation.
Case Study of ERP application in real business
Vinamilk's ERP system
| Before applying ERP Systerm | After applying ERP Systerm |
| The quantity of goods in stock is large, the output consumption rate is slow, and the production process costs a lot, reducing the profit of the business. | Sales and distribution are combined flexibly, increasing business efficiency. Enterprises can easily extract data, quickly process assessment, check issues, and develop direction. |
| Manual operation causes many difficulties in the problem of large archives, the level of errors, leading to unexpected damage. | The information technology level of the employees is enhanced, improved, and the technology infrastructure is consolidated, synchronized and synchronized. |
| The lack of synchronization in the control of production stages to order processing and accounting leads to an increase in production, storage, and inventory costs. | Management activities are centralized, transparent, inherited and timely thanks to the ERP system. |
| The need to hand over work between departments is done manually, so it takes a lot of time and capacity, but the data is difficult to synchronize, easy to lose. | Connecting distributors with the management system, improving working efficiency. |
The application of the ERP system to the operation process has helped Vinamilk create a breakthrough for the business to go further in the business process. From there, it can be seen that an ERP system can help businesses ensure operational efficiency and affirm their brand position in domestic and international markets.
Thegioididong's ERP system
| Before applying ERP Systems |
After applying ERP Systems |
| Using Excel software to manage, it cannot meet the arising monitoring needs | After deploying using an optimized ERP system, the management can update the status of inventory and sales and revenue immediately. |
| Making it difficult to manage shifts for employees when the scale of the business expands | The management of sales, customers, finance and accounting, human resources, etc. is done more efficiently and conveniently. |
Simplify processes and procedures, increase customer experience. | |
Overall management of the operations of the stores. | |
Update promotions for branches quickly and accurately. | |
| The purchase process is handled, avoiding waiting in line. |
|
The system helps store and aggregate customer information into valuable internal data for businesses. |
From the success of Thegioididong, we can see great benefits from implementing a synchronous governance platform. An experience from Vinamilk's ERP implementation case study is that businesses should use a comprehensive and comprehensive digital transformation solution instead of deploying a separate software. With the application of a comprehensive solution, businesses can grow synchronously, increase productivity and capacity, and save maximum costs.
TH True Milk's ERP system
| Before applying ERP Systems | Free/Charged |
| Managing human resources with Excel faces many difficulties, administrators do not track personnel on the same system and cannot complete evaluation reports. | The human resources department is synchronized with the reporting system to help managers plan the recruitment and allocation process. |
| The method of grading is not uniform. The salary calculation process is complicated, and internal disagreements cannot be avoided | Timekeeping and payroll services are paid accurately and tax finalization is supported when due. |
| Complicated, overlapping insurance formulas | Help the company solve the difficulties in the management of social insurance. |
TH True Milk has successfully used the ERP system for businesses. From the case study of TH True Milk, we realize the importance and necessity of a comprehensive and synchronous transformation such as information management, salary calculation, timekeeping, insurance, social... Enterprises that only deploy ERP with HR software, when transferring information to the accounting department and other related positions, will face difficulties because of the lack of data warehouse consistency. Therefore, enterprises need to have synchronization in human resource management and accounting on the same ERP system
How to choose the right ERP system solution for your business?
Currently, ERP systems can be applied to business in two ways namely on-premises and cloud computing.
- Cloud computing software stores information through an ERP vendor. Businesses only need to log in to the website hosted online to access the ERP systems. Therefore, businesses can access information anywhere via mobile phones or other mobile devices.
- On-premises ERP is deployed on server hardware and managed by businesses’ IT staff. This implementation is suitable for businesses with self-management capabilities.
Continue to follow these evaluation steps to test the appropriateness of ERP systems for your business.
Step 1 - Evaluate
Ensure business leaders understand how you evaluate ERP vendors through proper communication.
Step 2 - Create reviews
Properly understand your business in terms of the advantages and disadvantages, internal strengths and weaknesses, and the factors that need to be changed.
Step 3 - Set standards
Set standards to evaluate suppliers, including features, prices, platforms, and important criteria.
Step 4 - Make an appointment for a consultation
Schedule a call or face-to-face meeting or in-person demo with the vendor under consideration. It is important to put in mind each vendor and their differences.
Step 5 - Create a shortlist
Shorten the list to 2 to 3 best vendors once you have completed the discussion with all vendors.
Step 6 - Contact
Contact the shortlisted vendors to learn more about their offered products.
Step 7 - Make a list of questions about concerns
Clarify with the vendor your questions for effective working progress and cooperation.
Step 8 - Check the reference for the vendor
Talk to the businesses that have implemented the ERP system from your wanted vendor. You should find out about their experience with that ERP system including their positive and negative experiences, their expectations, their level of satisfaction, etc. The more information you have, the easier it will be to make a final decision.
Once you have made a decision, you should follow the entire project from start to finish. Remember to keep in touch with your vendor to collate key milestones and chart your progress on the journey of successful implementation of the ERP system.
Features and functions of ERP business management system
However, ERP systems cannot completely replace people. Instead, the ERP software system acts as a powerful support tool for business operations, minimizing labor. In fact, some specialized jobs cannot be replaced by ERP software. The ERP impletmentation includes modules with the following functions:
- Automate repetitive tasks and processes of businesses and support complicated calculations with high accuracy. Therefore, employees only need to enter the correct data, check, and compare.
- Create a modern and efficient working process. Business management functions are processed in one system with accounting software, purchase management software, sales management software, inventory management software, etc.
- Coordinate departmental tasks and functions. Therefore, managers can easily control through a unified and effective working process and plan appropriate business strategies.
- Manage centralized on a single platform. ERP system allows centralized management of business operations on a single software.
- Unify and synchronize data among departments in the business. All data is linked, shared, and updated for easy discussion and effective teamwork.
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The above article of Viindoo has provided the most basic information about the ERP system which is a software that makes business management easier. If you are looking for a reputable and professional ERP software vendor, please contact Viindoo to receive the most specific advice.
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