ERP or Enterprise Resource Planning is a common word in industries across the spectrum. Planning the resources involves the continuous transfer of information and data between multiple points and entities. This keeps the business functioning running and ensures that everything is in sync.
The traditional ERP has served an important purpose in managing businesses in the past when the internet and digitalization were not so common. However, it has its own set of challenges because it requires the data for each transaction to be entered at multiple points and maintaining a paper trail. This makes the process of data management extremely cumbersome and leads to duplication, errors, and delays/losses due to the lack of updated data on various occasions.
Therefore, to increase productivity and reduction of human hours that are wasted due to these challenges, it is pertinent to move towards new technologies. Continuing with the traditional process can cause large and wasteful inventory build-ups as well because all the stakeholders’ data does not get updated simultaneously. The information does not flow smoothly between departments, or amongst external stakeholders causing differences in results and inefficiencies.
While the old, manual system has worked well for industries in the past, the intermediate digitized version with the use of computers helped transfer data from manual / paper form to electronic formats. But, the changing demands of the current world scenario beg for a digital transformation of not just data formats, but of complete processes, The latest solution to this need is the network ERP which transforms processes by which information is shared with all stakeholders. Digitalized data entered at any one point of origin gets shared across all stakeholders and systems of the organization, its suppliers, buyers etc, which the organization retails the controls of disclosing that information at its discretion. Digitalization and smart networks can therefore solve some of the biggest problems faced by businesses today.
Through digitalization, data, discussions, documents etc can be shared and updated simultaneously across all stakeholders – internal and external – obviating the need to update business transaction data and/or scan/store transaction documents multiple times at each end, which previously resulted in data discrepancies, delays, duplication, and wasted time and effort. In order to simplify access and exchange with their business partners, smooth data sharing is the future of corporate scalability and profitability.
It basically means that if data is fed into the system by one stakeholder or a department, it automatically gets updated across the departments within the organization and also gets updated with the stakeholders’ databases at the discretion of the organization. Therefore, it completely removes all the challenges that occur from the use of the old processes, streamlines the entire organization, and ensures that updates are shared with everyone in real time.
Having a networked ERP ensures that data transparency is maintained across the organization for all the stakeholders. The organization can manage its data and control the flow to the best of its interests. The immediate impact of this transparency is that everyone is aware of the required information, even gaps between the demand and supply verticals, and they can work towards filling those gaps.
By adopting the digitalization process with smart networks, the organizations can have a networked Enterprise Resource Planning system. ERP software is a corporate management system that integrates and manages data across multiple departments. It lacks, however, the agility and flexibility required to satisfy the needs of dynamic corporate environments. Because traditional ERP methods often handle and retain data within an enterprise, so different databases are kept for each transaction at various nodes of the supply chain/business ecosystem.
Standardized procedures, data sets, and document generation are included in virtual SCM ERPs, resulting in a universal data set, easy data sharing, analysis, and forecasting, as well as in-depth industry research and data trend projections that are critical for strategic decision making. Smart networking minimises the need to manage several software and data sets and simplifies the management of business activities such as customers, vendors, human resources, financial transactions, order processing, procurement, and inventories.
Businesses implementing a networked ERP benefit from the scalable and high-performance design, zero data duplication, classification of item and supplier master data, holistic and integrated decision making, and less dependency on paper trails, thus reducing security risks. This is why, a virtual SCM ERP is necessary, which establishes a smart network of information and data that connects a company’s complete ecosystem.
Small businesses can use digitalization and networked ERP to streamline the majority of their manpower and processes, creating efficiencies and increasing profitability. A smart and connected network can handle manufacturing, inventory management, supply chain, customer relationship management, audit trail, product management, warehouse management, sales management, distribution management, and many more difficult processes. At the same time maintaining accountability, security, and efficiencies in the system.
Additionally, because all stocks are visible across the entire chain, inventory and stocks may be optimised, and redirected if necessary, using networked ERP, reducing time for all parties, and lowering inventory expenses. As a result, the cost of goods sold is reduced, and profitability improves.
This saves both time and money for the party that need these supplies, as well as the cost of inventory build-up for the party that has excess supplies but no need for them. It, therefore, generates tremendous business synergies and goodwill for all parties. Â
Industry 4.0 guidelines emphasise data communication and integration as well. As a result, for manufacturing organisations to comply with Industry 4.0, a networked ERP is Essential. In addition to the manufacturing industry, the service industry benefits greatly from the networked ERP system, saving money, time, and increasing profitability, goodwill, and help in business expansion.