Today, the importance and necessity of using ERP software in organizations is clear for anyone. Every day, more organizations start and update these systems in their organization. For this reason, we will have a short look at these systems and the benefits of setting up these systems in organizations.
What is an ERP system?
ERP is an abbreviated word of 3 large organizations (Enterprise), resources (Resource) and planning (Planning). ERP software are systems that manage all the resources of an organization. Integration and being process-oriented in these systems are considered important points. Also, these systems provide the necessary conditions and facilities for planning and optimal use of the organization’s resources.
In general, if we want to define ERP software in a simple language. It can be said that ERP is a comprehensive and modular standard software package.
ERP software includes ready-made and integrated modules that have been pre-prepared and engineered according to the best solutions obtained in the same industries as your organization. These solutions can be configured and customized according to your business after going through the initial stages of implementation.
This software package is highly flexible, process-oriented and information-oriented, which includes all the main processes to achieve added value in your organization.
When do you need ERP software?
In general, there are 5 main indications for your organization’s need for an enterprise resource management system (ERP):
- When you realize that you are spending a lot of money and resources on monitoring.
- Lack of integration between your units will result in additional costs.
- When you are not able to make decisions in the moment based on information.
- When your workflow isn’t helping your business grow.
- When the quality of your customer service is reduced.
What are the reasons for implementing ERP software:
Given the high costs of implementing such an initiative, what can motivate an organization to implement an integrated management system?
- Does ROI play an important role in the implementation decision?
- How does an organization decide which module to implement?
Implementation of ERP software is to improve business performance. Many organizations are also interested in discovering where they are positioned to grow, reduce working capital and better serve customers.
It means integration between different functional areas that are in a value chain. In order to optimize the business processes of an organization and ensure practical alignment between business processes.
Based on this optimization in critical processes, the selected ERP software helps the organization’s strategies to improve the growth of comparable constructions.
Comparing this issue with last year shows that the desire to make the work of manpower easier and replace the legacy system has increased.
Advantages of different fields in ERP software:
Setting up the organization’s resource management system (ERP) optimizes the organization’s processes. Also, its purpose is to provide the main and strategic needs of an organization in the long term. After launching the ERP software, many benefits will be brought to the organization, which we will examine in different areas.
Technical field:
After launching the ERP software, standard and improved processes will replace the old processes according to the organization’s industry. As a result, the organization will have more ability to control the process and the progress of the processes. Information will reach the managers more accurately and quickly, and it will allow managers to make real-time decisions according to the current situation.
By using the new technologies used in this system, the organization will be able to use and interact with other internal and external software with high security. By using ERP software, organizations will have the possibility to use software with high added value in addition to ERP, and also benefit from the possibility of building and developing add-ons for the main software itself.
Achievements of ERP software in the technical field:
- Fast and secure access to information
- Reducing the amount of required training
- Full integration between systems
- Using the web platform
- Ability to manage workflow
- Compliance with global standards
- Reducing the dependence on the operating system and hardware
- Ability to configure facilities
Achievements of ERP software in the strategic field:
With the implementation of ERP software, the major changes in an organization will be related to the strategic area. The first and most important thing is to change the attitude of the organization in using island systems to a systemic and process-oriented attitude.
After making the change mentioned above, the coordination between the units of the organization will increase a lot. As a result, the organization can be more successful in the fields of production, service delivery, preparation of accurate financial reports, increase in sales and profitability.
ERP software increases the organization’s ability to monitor the process after creating processes in accordance with the global standard, and by using a comprehensive and centralized database, it saves money, time and increases efficiency in the organization. Also, ERP software improves the infrastructure and more coordination within the organization. This is a great advantage for entering the world of e-commerce and using the web platform to facilitate things.
Achievements in the strategic area:
- Creating a systemic attitude in the organization
- Systematizing the way of working processes
- Help in achieving competitive advantage through process improvement
- Faster coordination with external organizational changes
- Using accurate and up-to-date technologies
- Infrastructure development in order to enter e-commerce
- Facilitating the development of new systems and technologies
- Creating organizational integration from the information dimension
- Increasing compatibility between information in the organization
Achievements of ERP software in the operational field:
ERP software circulates the information of the organization in different units and provides the same basis for getting all kinds of reports. By using this possibility, mistakes and discrepancies in the information available in different units are prevented.
You can also update the information at any time, which increases the quality and speed of reports and decisions at the moment.
Other benefits of ERP software is: optimizing and managing the supply chain and product supply as much as possible, increasing interaction between customers, suppliers and contractors, connecting with external information systems, speeding up activities, reducing rework, reducing costs and increasing the work efficiency of employees and the organization.
Iranian ERP companies vs. other companies:
ERP systems have a special place in the global business market. In our country, these systems have been noticed and every day new organizations join the list of customers of this system.
Among the big companies in the world that provide these systems, we can mention SAP Microsoft, Oracle and Focus Softnet.
Advantages and disadvantages of foreign companies providing ERP software:
Contrary to popular opinion, foreign software has not been very successful in increasing the efficiency of domestic companies. It should be noted that foreign ERP software is based on global standard processes and has experience of successful implementation in various industries on a global scale. In case of proper and principled implementation, they can become the most successful systems in the country.
According to the research conducted by experts, the most important reason for the failure of projects is the lack of awareness of the organizations about the difference between MIS and ERP and their different implementation process.
The most important reason that can be mentioned is the lack of license and lack of proper support for foreign software and the lack of access to these companies to make changes in the software due to international sanctions.
We at Ilia have created the ability to support this software with maximum reliability by the technical team within the company by providing a valid license in the name of your organization from Focus Softnet and by institutionalizing the technical knowledge of this software in our company.
Another important reason for failure is the non-nativeness and incompatibility of foreign ERP software with the business of our country, Iran. This issue has also been resolved in Ilia ERP Company by using expertly trained staff and software localization by Ilia’s internal technical and engineering team. This localization process has been successfully carried out in Iran.
Awards Received by Focus ERP in 2021
Conclusion:
In general, ERP software brings many advantages and benefits that were discussed in this article to organizations, each of which is considered very important and key. But 5 of the most important features that are of particular importance are as follows:
Reducing administrative costs:
Due to the process-oriented nature of operations, the use of methods and the ability to review and monitor processes, wasting time in performing activities is avoided. This reduced time can lead to reduced overtime, increased efficiency, reduced errors and rework. This factor itself is reported as one of the most important benefits of ERP software in organizations.
Increase turnover:
According to the functionality available in the scope of ERP software implementation, it can help in better planning for production that leads to an increase in the product or the availability of services. As a result, the organization lost fewer orders or achieved a higher level of customer satisfaction in a scalable manner.
Improved planning helps to use all resources related to production effectively and with minimal waste, which will ultimately lead to increased turnover by increasing services or production.
Increased profit margin:
With the help of cost control and checking the reports of faster, more reliable and more accurate processes, the organization will make effective improvements in reducing its cost and improve the organizational bottleneck.
In addition, by using historical information related to the amount of consumption, suppliers and previous purchases, the organization will be able to better manage its financial resources and reduce the costs of production or providing services and consequently increase the margin.
Correct use of financial resources and capital:
The complete and correct use of ERP software leads to the reduction of non-moving stock in the warehouse. In other words, in fact, stock is purchased based on accurate planning and at the right time. Also, by more effective use of resources and helping the collection process, the financial capital of the company will be freed and in the expansion of the market or product, which will increase the profit.
Increasing decision-making ability:
Organizations without the establishment of ERP software and the possibility of simulating production planning and examining the effects of its change on the cost price are not able to make an accurate decision on the amount of discounts and reduction of sales amounts or commissions in large contracts or sales festivals, and only by sense and Experience makes decisions.
By deploying ERP software, organizations can make a more effective decision on the amount of discounts or commissions, which can be very important and valuable for large organizations, with the possibility of simulating the increase in amounts due to the contract and its effect on MPS and cost price.
At the end of this article, we invite you to pay attention to the clip made about this issue.
