10 Reasons Why Businesses Need an ERP System in 2024

June 6, 2024

10 Min Read

Deciding whether to go for an ERP system or not? We’ll help you make the decision. In today’s blog, we’ll understand 10 reasons why your business needs an ERP system in 2024. So stay tuned and keep reading. First, let’s explore what ERP systems are, and how they benefit businesses.


What Are ERP Systems?

ERP stands for enterprise resource planning. ERP systems help businesses manage various processes without the need for human intervention and can also integrate all of these processes into one system. ERP systems can help your business in: 

  1. Managing its financial transactions by automating various financial processes such as budgeting, forecasting, and accounting. 
  1. Handling employee information such as attendance, payroll, bank account information, and entitled benefits. 
  1. Managing supply chain by tracking inventory, managing procurement, and handling orders logistics. 
  1. Gathering customer information such as past purchases and contact details, and creating reports based on that information to help make marketing decisions. 
  1. Managing project timelines, resources, and budgets, and ensuring that all projects are completed promptly. 

To sum up, an ERP centralizes all actions and data related to a particular function, providing you with a solution that automates all tasks, and helps you make business decisions. 

SAP, Workday, and Oracle are examples of some popular ERP systems. 

Now, let’s understand 10 reasons why your business needs an ERP system in 2024. 

Reasons Why Businesses Need an ERP System?

Here are 10 reasons why businesses need an ERP system in 2024.

 

1. More Automation- Less Stress on the Workforce

Before you introduce an ERP, most of your workforce is handling various tasks. I.e. juggling too many balls. For example, your salespeople might be making cold calls, dealing with customer complaints and queries, and sending emails. However, an ERP system such as a CRM automatically sends out emails to the mailing list, allowing your team to focus on important tasks, such as persuading customers to buy products. Thus, it is a great reason why your business needs an ERP system. 

2. Quick ROI

According to Genius ERP, the ROI from a CRM can be divided into operational costs, administrative costs, inventory costs, and costs for obsolete inventory. A study by Genius ERP found that implementing ERP software results in a 19% reduction in operating costs, a 15% reduction in administrative costs, a 19% reduction in inventory costs, and an 18% reduction in obsolete inventory, which all sums up to a payback period of 4-5 years on the investment. 

3. No Need to Store Files Physically

Have too many store rooms and employees to guard large stacks of files? It’s another reason why your business needs an ERP system. With an ERP system in place, you don’t need to maintain records in large warehouses. 

Rather, you can store your data on-site on servers and computers, or store it on the cloud facility provided by the ERP software that you have chosen. In either case, your data will be stored virtually, rather than physically, and everyone in your company can access it when needed. This means that you don’t have to worry about someone stealing or taking a file from the office, or a natural disaster destroying all available data. 

4. Improved Financial Reporting

ERP software such as SAP and Oracle are great for financial reporting. Having this ERP software in place ensures that your financial transactions and reports are prepared accurately. Once the transactions are entered into the system, it automatically prepares the financial statements. Thus, you don’t have to worry about balancing errors in the trial balance or the financial statements. 

5. Employee Self-Service

An ERP HR software allows for employee self-service. This means that your employees can view the amount of annual leaves that they have, mark their attendance from the ERP, and also send out applications to their line managers. Thus, they don’t need to physically right applications, or approach the HR department for small issues. 

6. Data-Based Approach for Decision-Making

ERP software such as CRMs has a lot of data about your customers, such as tastes and preferences, contact information, and purchase history. Using this data, you can make informed decisions about the future of your business, such as decisions regarding how to design marketing campaigns for new products. 

Similarly, a financial ERP can help provide you with data that helps in cutting business costs. This means that your team doesn’t make wild guesses, and easily has the data needed to make decisions. 

7. AI-Based Customer Service

AI-based customer service means that customers will now chat with an AI chatbot to solve their problems. Human customer service agents are susceptible to panic attacks and mental blocks while interacting with the customer. However, an AI agent doesn’t need to go through the same issues. AI-based agents use natural language processing to understand the customer’s tone. As a result, they can respond to the customers accordingly, which leads to a more accurate response which was expected by the customer. 

8. Improved Supply Chain Management

An ERP helps maintain the optimum level of inventory by providing data about stock levels. As a result, businesses can order the relevant stock when the levels are going beneath a certain threshold. Thus, an ERP system helps greatly improve supply chain management for your business. 

9. Effective Project Management

Project management tools such as JIRA and Assana simplify the process of managing projects. Now you don’t need to go to each executive’s place and enquire about their work progress. Just simply assign the task by using the tool, and ask your employees to log time. Once a project is completed, simply change the status to done. There you, go. Now, you have work logs for all your employees. 

10. Promoting Collaboration Among Departments 

If you have a collaborative CRM in place, you can easily promote collaboration among departments. As a result, there is no to get up and go to another person’s place, or arrange for large board meetings. Most ERP systems encourage the integration of communication tools such as Slack. Thus, you can easily introduce collaboration among departments. 

 

Now that we know about 10 reasons why your business needs an ERP system in 2024, let’s recap what we learned from the blog.

 

The Takeaways

In conclusion, ERP systems offer a multitude of benefits for businesses in 2024. From automating tasks and reducing stress on employees to improving financial reporting and data-driven decision-making, ERPs can streamline operations and boost efficiency. Additionally, features like AI-based customer service and improved supply chain management can give businesses a competitive edge. By promoting collaboration among departments and offering effective project management tools, ERPs can foster a more cohesive and productive work environment. If your business is still relying on manual processes or disparate systems, implementing an ERP system in 2024 could be a game-changer.

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With the help of predictive analytics, potential issues can be anticipated, thereby reducing the risk of crop failure. These advancements driven by AI not only streamline operations but intensify productivity in the farming industry.

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