The benefits of ERP (Enterprise Resource Planning) can have a substantial positive impact on your charity. For example, implementing this type of software can transform the way you work through improving productivity and potentially lowering costs.
We have put together a list of the advantages of ERP software, along with some of its disadvantages, so you can make an informed decision about its suitability for your business.
What is ERP?
Enterprise resource planning (ERP) refers to a type of software that can be used to manage the day-to-day running activities of an organisation of any size. This offers the opportunity to centralise processes such as project management, accounting, grant management and fund management.
What are the advantages of ERP?
Some of the main benefits of ERP software include:
1. Improved data security
One of the key benefits of an ERP system is its centralisation of data and having a single source of truth across your charity. The information is kept in one place and can be easily accessed by employees as long as they have an internet connection and an account log in. Critically, this supports remote access from almost any location.
Using an ERP system removes the need to store information on multiple platforms with varying levels of security. It also reduces the amount of paperwork that can be left lying around, often using excel spreadsheets to manually connect up disparate systems, which is far from ideal if you regularly handle sensitive data.
2. Enhanced productivity
A key ERP benefit that will benefit all types of organisations is its ability to boost productivity. You can automate repetitive tasks, so staff have more time to focus on key areas of business.
It also allows staff to find the information they need quickly and easily, as everything is kept in one place.
By streamlining the working day, it presents the opportunity for employees to add value to your organisation and impart skills and expertise that may otherwise have been lost.
3. Fully scalable
A common problem faced by growing charities is that they are held back by existing infrastructure issues. Scalability is one of the best benefits of implementing an ERP system, because as you evolve it can adapt to your changing needs.
For example, using a cloud-based ERP system enables you to add users and functionality without having to invest in a brand-new system, which can prove costly. It also allows you to always been on the latest version of the software without any additional costs. This avoids the dreaded ‘software end of life’ or ‘version lock’ conversation so common in traditional finance systems.
Its scalability allows organisations to be more flexible and agile in their operations, safe in the knowledge that the ERP system can support new ideas and innovations.
4. Cost savings
When it comes to the business benefits of ERP, its ability to lower costs within an organisation is crucial.
For example, the need for long paper trails is eliminated by the system’s ability to minimise and replace certain administrative and operational tasks and associated costs.
The data analysis provided by the system offers much more insight into your organisation, making it easier to identify and implement cost-saving processes.
Another critical saving relates to the time savings of not having masses of work being done separately by individuals on excel spreadsheets, and then trying to work out which ‘version of the truth’ is actually correct.
5. Better customer service
Your customers or clients will also benefit from the installation of an ERP system. This is due to the centralisation of information, allowing you to build and develop detailed databases that record interactions, requirements, purchases and more.
The ultimate goal of any organisation is to improve customer service and retention levels. ERPs provide end-to-end tracking and insight that facilitates better customer service, which can be built into processes that last from marketing campaigns through to late-phase customer communication.
If you want to find out more benefits, please contact us.
What are the disadvantages of ERP software?
Whilst there are many ERP benefits you can enjoy, there are some downsides that may need to be overcome:
1. Cost management
There are some additional costs to consider when it comes to ERP systems. Ultimately, there is likely to be some one-off costs to shift all your data and processes from an old system to a new system, even if the ongoing costs are then lower. A good cloud ERP vendor may be prepared to provide 0% Finance and deferred payment terms to assist with this.
2. Training and user adoption requirements
Employees will need to be trained on how to use the ERP system, which will vary depending on the features and requirements of individual organisation departments.
If new functionality is added to the system or processes are changed, this could mean that training becomes an ongoing requirement.
Organisations with an internal IT department will also need to ensure that staff are kept-up-to date with the latest versions, so they can provide the right level of support for employees.
Ideally, your implementation partner will view change management as part of the implementation process and will be focussed not just on training users, but bringing them along on the journey as to the benefits of the new system and often processes.
3. Complicated data conversion
Transferring your existing data onto a new ERP system requires careful planning and organisation. It involves developing a clear conversation strategy that involves defining, examining and analysing data sources.
Converting the data plays a key role in the successful implementation of an ERP system, so you must ensure that you have access to the right kind of expertise.
At the end of the day, in our experience, data architecture is a key element of success.
Implementing a new finance/ERP system is an opportunity to amend your Chart of Accounts, segments, analysis codes. A good implementation partner will have systems accountants involved working with you in relation to this.
Whilst it is impossible to avoid risk, it can be minimised. Our NetSuite consulting services minimise this risk through our team of expert NetSuite consultants. Data migration, project management and training are all fields we are adept at and can support your organisation with. Get in touch and we can discuss how we will help you.