Enterprise Resource Planning (ERP) software helps organizations automate their main business processes, creating a streamlined integrated management system that helps to optimize performance. It is designed to be a comprehensive solution that can handle a broad range of business functions across various industries; a single management suite that encompasses all of your business needs and replaces individual, department-specific software. These include finance, human resources, supply chain, customer relationship management, and more.
However, because it is a generalist system, it comes with drawbacks. For example, although the generalist ERP is capable of high-level tools and reporting capabilities, it often lacks the ability to be customizable to specific company or industry needs. For this reason the generalist ERP is often integrated with other specialized systems - automated financial systems like accounting Accounts Payable (AP) automation - that are designed for specific functions.
Let's look further into retail Accounts Payable automation in particular.
What Is a Retail ERP Software System?
In addition to integration capability with function-specific partners, some ERP systems are designed to address the specific needs of an industry. For example, retail ERP systems are designed to handle generalist but also industry-specific business needs such as inventory management, Point-Of-Sale (POS) transactions, merchandising, pricing, and even hourly employee tracking (among others).
With industry-specific ERP systems, the organization still benefits from all of the generalist ERP features but also those which the other may lack. But how does a retailer determine whether an ERP system will benefit them? What makes them decide to buy ERP software?
What Kinds of Retailers Tend to Buy ERP Software?
When it comes to ERP software, business size and needs are determining factors. A small, specialty store may only need basic functionalities that don't require broader capabilities of an ERP system. On the other hand, larger retailers such as department stores or big-box retail chains typically have multiple locations and a wide range of products or services that are difficult to manage without a centralized system.
In addition, retailers who want to streamline operations and improve operational efficiency are likely to invest in a single ERP system. This includes both retailers who want to automate tasks such as reporting and inventory management as well as those who want to provide a seamless and consistent customer experience across all channels, including online and in-store.
What Are the Benefits of a Retail ERP System?
A retail ERP system can provide a wealth of benefits including:
- Streamlined Operations: Retail ERP software systems automates many manual processes which in turn decreases the risk of fraud and errors. Retailers no longer have to worry that data could be transferred incorrectly or even not arrive. Instead, information such as invoice data is captured automatically, helping to ensure that vendors supply and are paid for the products or services that match the purchase orders.
- Increased Efficiency: Because retail ERP systems can integrate data from multiple sources and locations (including POS systems and e-commerce platforms), allowing retailers to manage their operations more efficiently and reduce the time previously spent on manual tasks such as data entry. Instead, employees have more time to focus on other priorities and tasks, such as customer relationship management.
- Improved Inventory Management: With a retail ERP system, retailers can track multi-location inventory levels in real-time. This allows them to optimize their stock levels, reduce the chance or amount of out-of-stock, and improve order fulfillment. This helps enhance the overall customer experience.
- Enhanced Customer Experience: A retail ERP software system helps retailers to better track customer behavior and preferences, enabling them to tailor offerings and inventory to enhance the overall customer experience.
- Greater Transparency and Improved Decision-Making: Retail ERP systems provides retailers with access to company-wide, real-time data and analytics. This in turns allows them to make informed decisions about pricing, inventory, cash flow, and other important aspects of their business.
What Should You Check When Choosing an ERP for Your Retail Business?
Choosing an ERP system in a critical decision that requires careful consideration. Before selecting one there are several factors that you should check to ensure that the ERP will meet your business needs. Some of these key factors include:
- Company Business Requirements: It is important to have a clear understanding of your business requirements and objectives. This will ensure that you cover all aspects of your business and don't end up with a future piecemeal software system that doesn't integrate well or is difficult to use.
- Customization Capability: Can the ERP be customized to meet your current specific retail needs? If necessary, can the customizations change in the future?
- Integration Ability: Most quality ERP systems are capable of integrating with other systems, whether they are ones that you currently use or that you plan to use in the future. Having good integration capability is important for ensuring that data can flow smoothly between different systems.
- Scalability: Can the ERP solution grow alongside your business and handle increasing (or decreasing if necessary) volumes of data over any period of time?
- Usability: Is the software user-friendly? The ease-of-use can have a significant impact on the adoption and success of the ERP implementation as well as employee morale.
- Cost: What costs are associate with the ERP? How many users can access the system? Determine the total cost of ownership including the initial purchase price, any implementation costs, length of contract, and any other miscellaneous costs. Are there any customer testimonials that you can review? Calculate whether the ERP provides a good return on investment (ROI) for your business.
- Implementation: How long will it take to set up the ERP system? Is it on-site or cloud-based? What is required to integrate your existing systems? What is the training period involved? You want to know the procedures in advance as well as whether you will need to make any adjustments to your current processes.
- Support and Training: Does the ERP provider offer adequate support and ongoing training resources to ensure a successful implementation and ongoing ease-of-use for the ERP solution?
By considering at least the factors listed above you will be above to choose a retail ERP solution that meets your business needs, is scalable, and will provide a good ongoing ROI for your business.
What Are the Take-Aways
In conclusion, retail ERP systems can be a solid, comprehensive solution for retailers looking to optimize their business processes, streamline operations, and enhance their over customer and employee experience. These systems provide a centralized management system that can handle a broad range of business functions but also industry-specific needs such as inventory management, Point-Of-Sale (POS) transactions, merchandising, and pricing.
To ensure that they receive all the benefits from their investment, retailers need to choose the right retail ERP system based on their business needs. This means first identifying the needs, then matching them such as business requirements, customization capability, and more. With careful research and consideration, retailers can select the right retail ERP system and benefit from increased efficiency, streamlined operations, improved inventory management, and provide an exceptional customer experience.
In today's highly competitive business environment, what isn't to like?