What is an ERP system and why can’t you live without one?
Running a business in retail has become increasingly complex over the years. Today, consumers expect to be able to store in physical stores, via their mobile devices and on the web through your e-commerce site – and to receive a smooth experience regardless of the channel used. These additional outlets and higher demands add complications to your daily operations.
The world is changing, but many companies are lagging behind. Too many retailers still use multiple IT systems for different aspects of their business. Because these systems often don’t fully communicate with each other, they only make the job harder. If your inventory management system software isn’t communicating with your Point of Sale (POS), your e-commerce or your accounting software, chances are you and your customers will be dealing with outdated information on a regular basis, causing you to lose a lot of time and money.
What is an ERP system?
An Enterprise Resource Planning (ERP) system is a software solution that is implemented throughout the company to improve the flow of data and facilitate business processes throughout the organization. Implementing a quality ERP system enables you to streamline operations in your business, reduce costs, increase productivity and deliver a better overall customer experience.
In-store, product and inventory management
Your ERP system makes back-office work a breeze by simplifying processes related to adding, categorizing and grouping new items, implementing special offer campaigns, counting inventory, replenishing stock and more. The system can be customized to meet the specific needs of your retail business.
Staff Management
With a comprehensive retail management software solution, you can easily manage your staff rosters, oversee work schedules and control your staff costs. The ERP solution can automatically calculate sales commissions and helps prevent losses by detecting suspicious activity in your Point of Sale (POS) transactions.
Personalized customer service
An ERP system can collect customer data, giving you valuable insights into your customers’ buying habits. You can then use this data based on their past purchases to create special offers tailored to their tastes and preferences. You can also offer a loyalty program that rewards repeat customers.
Cloud and on-premises ERP
In the past, most ERPs were on-premises, meaning they were hosted on the retailer’s hardware and in-house servers. The retailer’s in-house IT team was responsible for system updates, upgrades, maintenance and security.
Today, ERP systems are massively in the cloud. Cloud-based ERP (also called SaaS ERP, “software as a service”) has several advantages over the traditional on-premises system:
- The system is automatically updated by Microsoft. The retailer does not have to do anything – aaS software guarantees that you are always automatically on the latest version, with all the functionality that comes with it.
- Microsoft takes care of security and compliance with legal requirements.
- Capital expenditure is lower: there is no need for hardware and servers, and the cost of operating and maintaining the system is included in the subscription price.
- It is easier to add new features or implement additional applications.
POS: a definition
Point of Sale (POS) is the name for the new generation of cash registers. However, unlike the old cash registers, POS are electronic and can process much more than just sales. They can also process different types of payment forms, record and track customer orders, support special promotions such as “buy-one-get-one” offers, connect to other systems, and manage and update inventory. A modern POS offers retailers not only a more integrated way to manage their business, but also a host of tools to provide customers with better and faster service.
POS terminals can be stationary, on a fixed POS, or run on mobile devices and tablets. With a mobile POS, retailers can enable their staff to serve customers, look up product information and even complete transactions anywhere in the store. Mobile POS are especially useful in large stores where sales associates must travel long distances.
For a retailer, it is of utmost importance to choose an ERP system that is seamlessly integrated with their POS solution. Your ERP and Point of Sale systems must be able to communicate without interruptions and delays, otherwise you risk errors and a lot of lost time due to data reconciliation.
Our Conclusion
An ERP system offers unsurpassed opportunities for efficiency, data reporting and analysis. You can measure and track how you are performing against your KPIs, discover ways to improve profitability and track how well your business is doing – all in real time.
As a retailer, you need to make sure you choose an ERP system that also includes all the retail-specific functionality you need. As a Golden Partner of Microsoft and LS Retail, TCOG is the go-to resource for all your ERP software questions. Request a free consultation now!
