How Microsoft ERP Differs from Past Resource Planning Systems

Enterprise Resource Planning (ERP) is a business management system that integrates and manages several components of a business. These include the supply chain, financials, reporting, human resource, customer relations, operations, warehousing, and manufacturing.

For a long time, companies focused on having an accounting system since this was considered the most complex and critical aspect of any business. However, Microsoft ERP has redefined how businesses look at the various departments in the company structure.

Creation of a one fluid system

Microsoft ERP vividly shows the interconnection between the various business processes. A breakdown in one of the links will have an impact on the company’s productivity. This was lacking in the past systems since companies looked at each department as independent units.

Microsoft ERP clearly shows the relationship between customer relations, sales, human resource, marketing and accounting. For example, if the human resource department does not meet the welfare of the employees, they are likely to be less productive. This will affect sales, marketing, and revenue. Microsoft ERP system monitors every aspect of the business, such that potential problems are tackled even before they occur.

Microsoft ERP is specific in problem identification

Before the Microsoft ERP system was introduced, companies struggled to identify the cause of the fall in revenue. It was almost like shooting blindly in the dark when it came to marketing. Microsoft ERP software shows if a marketing strategy is yielding the desired results or not. Companies get to make changes early once they realize the return on investment is not viable. If there is a sudden fall in sales, the company will immediately notice and find ways to boost sales instead of waiting for the monthly or quarterly reports.

Detailed reporting

Most of the traditional reporting was based on revenue and the general performance of the company.  Stakeholders can today look at the performance of every department, compare the productivity of employees to the output, and look at future projections based on the current trends. The details make it easier for companies to plan the direction the company should take. For example, the introduction of new products based on the current consumer response or warehousing challenges.

Remote Access

Most of the traditional business management systems granted on-premise access. When away from the office, business owners or managers would rely on the reports you get from people charged with the responsibility of managing each unit in the company. This made decision making very difficult. Microsoft ERP software can be accessed from anywhere by the authorized personnel. Should any issues arise, Directors can act immediately, irrespective of their location.

Risk Management

When you go into business, you are taking a risk. It may work out, or you might lose all your investment. Very few startups make it past the first year. Having a reliable ERP system on the onset will help businesses to carefully monitor performance and manage the risks effectively. Past ERP systems did not offer this feature.

Microsoft ERP helps business owners to identify loopholes that may adversely affect the operations of a company. For example, if a company invests in unpopular goods, a decision to sell them at a discount may be reached to ensure the business does not experience cash flow challenges.

Technology keeps changing. What was once considered a necessary investment in business management is not comparable to today’s technological capabilities. Businesses have become more global, and expectations are higher. Adopting a system that accommodates the widening scope of business transactions has become essential.