6 Benefits of ERP

At a glance, the ERP isn’t all that exciting. It’s a central database for the entire business — combining all departments, data, and processes in a single platform. 

But, the ERP’s “unifying powers” pave the way for business transformation at every level.  We’re talking in-depth reporting, advanced financial management, AI-powered everything. 

We know these “benefits” sound too vague to be true. 

It’s just that most ERP benefits are defined in context with a company’s individual needs, strategy, and definition of “success.”

So, what are some of the more “universal” benefits that ERPs have? Like, how, specifically, do they fuel growth or drive revenue? How do they supercharge productivity, slash costs, support customers? Enable rapid decision-making that reliably produces the right outcomes?

Here, we’ll do our best to answer those questions by focusing on six benefits modern ERPs bring to the table.

1. Real-Time Insights

An ERP provides a comprehensive view of the entire business — finance, accounting, inventory, production, sales, marketing, HR — allowing managers to better understand and control their operations.

It supports greater self-awareness by capturing information from all those different departments — and links it all together. This provides an in-depth look at how your business is performing — from the most macro level down to individual data points.

And, because most ERPs include baked-in intelligence straight from the box, users gain access to actionable insights and role-specific reporting tools that provide a deep, contextual understanding of what’s happening, why, and what that means for your business.

Most organizations are sitting on incomprehensible volumes of information. In theory, they’ve got this wealth of resources at their fingertips. In practice, orgs are overwhelmed by a digital hoarding problem. And — many have no clue how to extract virtual “diamonds” from an ever-expanding (exploding, really) rough. 

One of the most compelling benefits ERPs have to offer is real-time access to critical data. With on-demand access to accurate, in-depth insights, companies can level up planning, forecasting, budgeting, decision-making, and more. 

As a result, they can unlock new growth opportunities, cut costs, and reliably serve up great customer experiences. 

According to Sage, data is only good when people find it, interpret it, and put it to work. ERP users should be able to instantly understand what’s happening, in context with their role. That way, they can immediately spring into action, knowing they’re making the right move.

But — more than that, the best solutions deliver key insights in user-friendly ways. Think — self-serve reporting tools and visual dashboards. And — it’s this piece of the puzzle that really changes the game.

Gartner reports that more than 50% of finance departments struggle to provide stakeholders with the insights they need to make informed decisions.  So, while more orgs are making an effort to “democratize data,” many are still falling short when it comes to presenting that information in ways that are actually useful to others.  

The point is, presentation is everything. Reports need to be customized around the needs of the people consuming them — and presented in a way that helps each group use that information to achieve a specific outcome.

2. Total Financial Control

While most companies use software to manage finance and operations, siloed solutions and complex legacy systems create waste, undermine data integrity, and block future growth opportunities.

With the right ERP, orgs gain full control of their bottom line. 

Built-in asset tracking capabilities can help you avoid hidden costs and reduce risks like outages and cyber-attacks. End-to-end visibility unlocks opportunities to lower costs — perhaps by optimizing resource management, fixing inefficient processes, or automating tasks like billing or collections. 

Whirlpool cut HR operating costs by more than 20% within a year of implementing their SAP ERP. The appliance giant achieved these results by standardizing HR processes and leveraging workforce insights to improve employee experiences and develop future-ready skills. 

Those changes also enabled Whirlpool to improve the customer experience — empowering team members to drive outcomes and providing a standardized framework to ensure consistent performance. 

The ERP’s financial benefits cut the other way, too. Most cloud-based systems are packed with features designed to help you actively fuel growth. 

For example, visual reporting tools make it easy to ID upsell or cross-sell opportunities that bring in extra revenue. You might use intelligent forecasting to better predict future cash flow. Or, you might set up automated subscription billing to manage recurring revenue streams.

3. Enhanced Collaboration

ERPs enable collaboration in a few key ways. First, they facilitate communication and collaboration between different departments, units, and groups. Again, that’s by virtue of providing a connected, digital platform the whole business can use.

Teams operate within the same ecosystem – allowing individual users to understand their role and responsibilities in context with the bigger picture. Users can easily find and share data and docs, and enable accurate, informed decisions. And – it’s easier to reach out to colleagues and provide better service/experiences to customers.

That said, it’s not just about delivering information. It’s about delivering information that’s actionable and useful – ensuring that every stakeholder can reliably achieve their goals and communicate ideas in the most effective format. 

Consider how many collaboration tools promise to make work easier, yet end up burdening users in new ways – extra steps, excessive app switching, steep learning curves, etc. 

Modern ERPs address this issue, allowing orgs to design role-specific environments that enable cross-departmental collaboration. For example, embedded intelligence, visual reporting tools, and more self-service options are making it easier for users of all abilities to work with data. 

Same goes for low-code development tools like those found in the Power Platform suite. For example, D365 users can use Power Apps or Power Automate to build custom solutions, using the data stored in that core ERP. 

ERPs also provide visibility into how teams work and share information. This allows business leaders to make informed decisions about how they might improve workflows, policies, and processes. 

For example, we built a collaborative newsfeed to facilitate knowledge sharing and self-service among Velosio employees. 

Those workforce insights might also inform investments in tools that might make things easier on workers. For instance, mixed reality solutions like Microsoft Dynamics 365 Guides, Remote Assist, and HoloLens 2 can extend the value of the core D365 ERP. 

These solutions can improve hybrid or remote work by making it easier to share holographic content — whether that’s a live-streamed meeting, training session, or an opportunity to collaborate and share files in real-time. 

4. Operational Efficiency

An all-in-one ERP system can significantly improve process efficiency, boost productivity, and bring down operating costs. 

With siloed solutions, there’s a ton of redundancy. For example, employees often end up entering the same data, manually, into several different applications. With an ERP, all of those applications are consolidated into a single ecosystem, so data automatically syncs across all connected modules, services, and data sources. 

When everyone works from the same system, employees spend less time on low-value tasks and more working hours solving problems and supporting customers. It also improves data accuracy and reduces costs associated with human error. 

ERPs also use AI and machine learning to automate repetitive tasks and streamline processes — driving further efficiency gains and greater accuracy. 

Formed in 2017, Alterra Mountain Company has rapidly grown its portfolio, which now

includes a range of ski resorts, restaurants, hotels, real estate development, and outdoor recreation, across close to 50 global destinations. 

Early on, Alterra’s leadership team knew they needed to deploy a common financial system that would allow them to manage all of their properties in one place, while maintaining a necessary separation between different units, divisions, and brands. 

The company used Dynamics 365 Finance & Supply Chain Management to consolidate four separate legacy companies (with 7 ERPs between them). Not only did this move allow them to manage all finances in one place, it helped them drive efficiencies across the entire portfolio.

Andrew Renken, Alterra’s VP of Enterprise Applications & PMO says D365 gave the company the ability to quickly scale and adapt its strategy to new growth. At the same time, they were able to maintain the individuality of each destination or property. 

For example, D365 Supply Chain Management allowed the company to standardize procurement. They were able to quickly implement the same governance policies, business processes, and approval flows across all locations and business units. Alterra was also able to replace outdated expense and asset management systems and take advantage of enhanced, org-wide financial reporting. 

Overall, these improvements enabled Alterra to take advantage of economies of scale and make decisions with a full understanding of the financial implications on the entire business. 

5. Improved Customer Experience

The CRM might be better known for supporting the customer journey, but the ERP plays an equally vital role in transforming your business into a customer-centric organization. 

Because they unify all aspects of the business, ERPs benefit customers in a variety of ways.

They provide transparency across teams — ensuring that customers receive consistent information whether they talk to someone from sales, customer service, or tech support. 

That single source of truth also makes it easier to solve customer problems faster. Everyone has a complete record of all prior interactions, so anyone can jump in and pick up where the last person left off.

ERPs also ensure accurate counts of available inventory, resulting in faster fulfillment and delivery times.

And — they gather customer data, which can be shared across the entire org and analyzed in context with things like sales performance, market intelligence, budgets, etc. Insights can then be used to make decisions re: demand planning, procurement, personalization, and so much more.

6. Enhanced Security & Compliance

Centralized control is huge for cybersecurity. And, since ERPs span the entire business, they play a vital role in protecting the business from all potential threats. 

According to Sage, consolidating financials into a single ERP solution already goes a long way in reducing security risks — simply by providing granular, holistic controls for access, compliance, and governance. 

This means, anti-ransomware tools can be layered on top of that core ecosystem. Admins might use tools like Azure Advanced Directory (AD) to define rules for who can view, edit, and share docs and data or what apps people can use. Within each app, they can set permissions for different features or data sets. 

They can also create policies and apply them across the entire organization and enforce those policies using AI-driven automations. And they can leverage automations to enforce data governance, regulatory compliance, and consistent workflows — and take proactive action against incoming cyber threats. 

Now, there are about a million different tools you can use to lock down your digital assets. But the point is, the ERP acts as that foundational base you can use to build out your security strategy, based on your unique requirements. 

Final Thoughts

The big takeaway here is, all ERP benefits come from the same core components: a unified, cloud-based system, a mature data strategy, and tight integration between all apps and services in your digital ecosystem.

Once you’ve nailed down those basics, you can start pursuing the ERP benefits that matter most to you.

Velosio’s ERP experts can help you lay that critical foundation and maximize the value of your big investment for years to come — with advisory and implementation services, proprietary solutions, and long-term support. Get in touch to learn more.