7 Sectors That Benefited Most from ERP Software
The manufacturing plants used to be the top industry benefiting from Enterprise Resource Planning (ERP) software. This has changed in recent years, however, with its usage expanding to other sectors. No wonder a study by Marketwatch expects the ERP software market to generate $47 billion in revenue at a 7% CAGR from 2017 to 2022.
What is ERP software?
ERP software aids businesses in creating a better and more efficient automated business. It helps companies in accomplishing some of the most important tasks such as accounting, manufacturing, and project management more efficiently. Even waste management becomes an easy feat with the right ERP software in place.
Most ERP software is sold in modular form, enabling organizations to purchase only the functions they deemed necessary to their business. That might include human resources, accounting, or inventory modules. When deployed, an ERP system streamlines and standardizes processes. Preparing financial reports is also made easy by allowing you to input information only once instead of having to enter the data in various systems repeatedly. The data can even be used in various parts of your organization. This level of efficiency provides your company with a competitive edge to stand out in the marketplace.
Below are 7 sectors that benefit the most from ERP software:
1. Waste Collection
The use of ERP software is an emerging trend in waste collection and city cleaning, a sector that is characterized by constant change. The industry’s dynamics usually react instantly to new legislations and regulations being implemented to toughen waste regulation and reporting duties. Through an initiative by C40 launched in 2018, 23 cities around the world also committed to becoming zero-waste by 2030. This consequently requires industry players to use cutting-edge ERP solutions to fit the ever-changing sector.
ERP software systems benefit the waste collection industry by simplifying the following processes:
- Classifying, recycling and production recording processes
- Managing hazardous substances
- Quality assessment
- Short-term and long-term transport planning
- Managing and monitoring container
- Order processing
- Contract management
- Expanded mapping of business partnerships
2. Manufacturing
One of the benefits of ERP system solutions for manufacturers includes improved inter-department communication. Accounting, purchasing, and production are only a few of the processes that departments need to communicate with another. The right ERP solution can help you do so with great ease. A study by Aberdeen Group found that 48% of manufacturing business leaders said that they required such technology to contain sector-specific best practices.
ERP software systems provide manufacturers with effective communication tools both for internal and external communications with other departments and suppliers. It empowers distributors to control costs, inventory, and supply chain to help them satisfy their customers and stand out against competitors.
3. Hospitality
Managing hotels and accommodations involve a lot of moving parts and incredible things going on. You need to monitor your staff, cleaning schedules, waste collection, scheduled and canceled appointments, which rooms are occupied and which are not, and a lot more. Not to mention the several restaurants and bars that are found within the establishment.
ERP software enables hotel managers to keep all vital information in a single place to minimize duplicates and conflicting data like double-booked rooms. They can also manage every transaction within the ERP by integrating the software with point of sale systems. No wonder, Apps Run the World forecasted that the leisure and hospitality applications market size will grow at a 1.6% CAGR to $9.4 billion by 2023 from merely $8.7 billion in 2018 amid the many benefits of ERP software.
4. Education
An ERP software system can be a valuable tool for academic and research facilities in managing their several logistical needs. From tracking some aspect of the supply chain to tracking accounting with the use of centralized access to all ledgers and built-in audit trails, the technology has a lot to offer. Its prominence in the education sector has never been more evident recently with the education ERP market projected to grow at a 15.9% CAGR to $14.19 billion by 2021 from $6.77 billion in 2016.
You can use the software’s procurement tools to find all essential items at the lowest price possible. It also has robust project management tools to manage initiatives with great ease.
While a lot of this technology is targeted towards higher institutions, there is also some serving primary and secondary education. They mainly use data to offer insights into best teaching practices.
5. Healthcare
A healthcare ERP software system can help you handle several items used daily in the sector, including the procurement and sourcing of such items. It can also enable you to monitor data concerning human resources like payroll and utilities, such as waste management reports.
ERP’s sophisticated accounting tools also enable you to manage your finances across the healthcare system effectively. Together with robust business intelligence tools, an ERP software system can provide you with crucial metric analysis, such as quality of care versus costs of care. Its use in the healthcare sector has increased over the years. Data from the HIMSS Analytics Logic platform show that the adoption of Hospital ERP software has grown to 38.4% in 2018 from barely 18.8% a decade ago.
6. Retail
With the growing competition in the retail sector, the use of ERP has become inevitable to keep up with the increasing customer demands.
The set of customizable apps that allows businesses to manage and integrate all their major operations smoothly can be complicated and lengthy when done manually. Some of these operations include product discount offers, pricing changes, moving stocks, and handling multiple location stores.
Retail ERP software offers a reliable, simple, and quick management solution necessary for a more efficient business operation. For example, Canada’s largest retailer Loblaw Companies Ltd. uses retail ERP software to better utilize the data available out of the solution. The end results? The company reported that they no longer experience excessive inventories. It added that the management is better informed regarding what products to promote. The ERP software provides Loblaw with a better picture of the requirements of every store it manages.
7. Construction
People who have been in the construction sector long enough know well the pressures brought on by a fixed deadline and a tight budget. Adding to the stress are unexpected situations arising that could send established plans out and require staff to set a new working timeline and new project margins. PWC’s 2017 Engineering and Construction Trends report noted that in order for construction firms to remain competitive, their executives need to recognize how technology is changing business nowadays. It said that it is making processes less expensive and more efficient.
ERP software offers robust data analytics for several construction processes, including asset management, submittals, scheduling, customer relationship management, bid management, vendor management, project management, human capital management, inventory or equipment management, contractor management, and financial or accounting management. It integrates various systems into an all-inclusive solution so you can have all the essential tools to manage a project’s full lifecycle. This is particularly vital as the use of improper document management, scheduling, and accounting software can delay construction projects and the company’s growth itself. The absence of integrated software solutions can be damaging to the construction project if unexpected circumstances arise.
Customized ERP security functions such as network and firewall encryptions, audit trails, real-time monitoring, electronic identity management, user provisioning, and Role-Based Access Control offer extra protection layers to limit access to sensitive information. Integrated data analytics and data visualization, as well as customizable dashboards, are essential features especially during times of distress.
Should you invest in ERP software for your company?
A lot of ERP projects today are much more successful than in the past, thanks to ERP software solutions that make processes easy and efficiently done. With a vast cloud software available in the market today, along with the ERP software benefits mentioned above, there’s no doubt that ERP is a big deal. You’d be missing a lot if you don’t know how to use examples of ERP to your advantage. If you’d like to look for the right ERP software system for your company, you may refer to the following list of ERP software tools to get started.