Everything You Need to Know About ERP: A Beginner’s Guide


Even before the pandemic hit, companies were rather keenly interested in technologies like cloud ERP. Interest has become a necessity in the pandemic years, with migration to cloud ERP more urgent than ever. According to reports, the global cloud ERP market can reach a valuation of $277 million by 2032 from $63 million in 2022, with a rapid growth of 16% during the period.

There are several reasons for this trend to take off: the impact of COVID-19 on businesses, the need for agility, flexibility and greater efficiency in operations, and the growing reliance on cloud-based tools. As cloud ERP becomes more and more essential, we spoke to SAP experts to give us more clarity on some common questions and doubts that business leaders have.

Edited excerpts from the interview:

YourStory: Moving to the cloud has become essential for businesses that want to be ready for the future. But what is a cloud ERP?

Experts: ERP stands for “enterprise resource planning”. An ERP system, also known as an ERP suite, is made up of integrated modules or business applications that communicate with each other and share a common database. He is responsible for the effective management of various departments – from finance, manufacturing, human resources, supply chain, services, purchasing, etc. It is often called the organization’s system of record, sometimes even the “central nervous system” of an organization.

Today’s ERPs are delivered on the cloud and use the latest technologies such as artificial intelligence (AI) and machine learning to provide intelligent automation, greater efficiency and instant insight into day-to-day business operations. ‘business. And when we say day-to-day operations, we really mean that every department needs it – finance needs an ERP to quickly close the books, sales needs an ERP to manage all customer orders, logistics relies on well-executed ERP software to deliver the right products and services to customers on time, accounts payable needs an ERP to pay vendors correctly and on time, management needs instant visibility on company performance to make timely decisions, and banks and shareholders need accurate financial records, so they rely on reliable data and analysis made possible by the ERP system.

YS: What are the main functionalities of ERP? How do they add value to Indian mid-market companies?

E: Cloud ERP is here to stay, and we know that because of the growing adoption rate. According to G2, the global ERP software market is expected to reach US$78.40 billion by 2026, growing at a CAGR of 10.2% from 2019 to 2026. And the reason for this growth stems from the benefits that come with the ERP system.

It helps to:

  1. Full visibility: ERP makes the data of each department accessible to all members of the organization.
  2. Better information and planning: A unified reporting system helps generate useful reports and analytics. It helps break down information silos, get a single source of truth, and get quick answers to critical business questions.
  3. Improved agility and productivity: ERP reduces manual processes, helping teams focus on other tasks. Access to real-time data can help companies identify and react quickly to new opportunities.
  4. Less risk: One of the main advantages of ERP is data security, which remains an essential element. The system manages who can view and edit information. It maximizes business visibility and control, ensures compliance with regulatory requirements, and anticipates and prevents risk.
  5. Simple way to work: By using integrated ERP applications that share a database, you can simplify IT and give everyone a simpler way to work.

YS: The transition to an ERP system is a big step forward. When should companies move to ERP and what strategies should they keep in mind for a successful implementation?

E: ‘When do you need a modern ERP system?’ is an important issue these days. To answer this, companies should also ask themselves a few questions, such as “Are you spending too much time on activities? », « Do you have many unanswered business questions? », « Do your business processes need to be restructured? ‘, ‘Do you have manual processes with multiple datasets?’ and ‘Are you missing opportunities that could be avoided with predictive analytics?’ If your answer is yes, then you must opt ​​for an ERP system.

When it comes to implementation, the first thing is to recruit an implementation team. If the team is not qualified enough, the project will suffer delays, additional costs, etc. Additionally, companies should keep the following in mind:

Describe your business goals: Narrow down the scope of the first phase of implementation and outline your business process goals and the KPI you want to achieve.

Find a partner with deep expertise: Not all internal teams are experienced. Companies therefore need to find a good software partner whose staff is trained in different industries and available for your sites. If you have international customers, your partners should also be exposed.

Detail your tasks: The to-do list should be broken down into phases – from training different teams to integrating with other applications. Business leaders should work closely with their ERP partners to allocate time. Calculate a timeline for implementation, then create a realistic schedule.

Focus on user experience: Make sure the team understands the solution. Get their feedback early to make user experience a top priority and have plenty of time for onboarding and training.

Conduct a conference room pilot: To ensure that you have the correct business processes in place, perform a test or pilot project before full deployment.

Check integration: Make sure your solution can be easily integrated with other applications and can be easily extended as your needs grow.

YS: According to a recent survey, 63% of companies chose cloud ERP software over on-premises ERP. But how can companies evaluate their ERP systems when there are so many choices?

E: Each ERP module supports specific business processes, such as finance, purchasing, or manufacturing, and provides employees in that department with the transactions and information they need to do their jobs. Businesses can choose the module they want and add as needed. ERP software can be purchased using a cloud subscription model (software as a service) or a license model (on premise). But there are things companies need to consider before opting for cloud ERP – the first step would be to define your challenges and requirements, then find reputable ERP vendors with global reach, business analysis ROI might also help, comparing enterprise-to-enterprise ERP demos to understand features, technology, and performance. Finally, make sure your partner has deep industry knowledge to help you find the right ERP solution for your business.

YS: How do companies decide if their current system works for them or if they need an upgrade? What signs should they watch out for?

E: Some features are an absolute must in an ERP suite, so it’s essential to check if yours has them – a common database, built-in analytics, visual representation of data with dashboards, automation of repetitive tasks , consistent UI/UX , seamless integration of business processes, supports new technologies such as AI/ML, IoT, fast and stable technology stack, including a low-code/no-code platformiPaaS, data management, etc., multinational support and choice of deployment, whether cloud, on-premises or hybrid.

YS: What are the unique advantages that SAP offers to companies in the Indian middle market?

E: SAP S/4HANA Cloud is the intelligent enterprise ERP system with built-in smart technologies including AI, machine learning, and advanced analytics. With it, companies can adopt new business models, quickly manage business change, orchestrate internal and external resources, and utilize the predictive power of AI. Businesses can benefit from the in-memory database and simplified data model, mainstream user experience and personalized insights, and the support of a stable partner like SAP.

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