Benefits of Implementing ERP for the Retail Industry

The Benefits of Implementing ERP for the Retail Industry and the Points for Selecting a System

In this article, I will explain the benefits and precautions of implementing ERP by retailers and the points of system selection.

More and more companies are adopting IT tools to streamline their operations, and ERP is one of the most important systems that can contribute greatly to a company’s performance. ERP is being implemented in a variety of industries.

Table of Contents

• ERP
• Benefits of implementing ERP for the retail industry
• Selection points of ERP for the retail industry
• Points to keep in mind when implementing ERP
• Summary

ERP

ERP stands for Enterprise Resource Planning, which activates corporate management and business activities to accelerate business.

At first, it was a concept to aim at the efficiency improvement of corporate management. It often refers to integrated line-of-business systems or core systems and is also called ERP systems, business integration packages, etc.

The basic role of ERP is to centrally manage a company’s resources to help make real-time business decisions. The IT system that plays this role is an ERP system or ERP package, which integrates core business operations of the company, such as production, logistics, sales, human resources, and accounting, and achieves company-wide operational efficiency by centrally managing information and resources.

IT tools are also used in the core business, but most of them are independent systems for each business unit. Therefore, if you need to exchange data across departments, you need to build data integration between systems. The difference is that core business systems are designed to improve the efficiency of each business, while ERP is designed to integrate the core business and strengthen the management foundation.

Benefits of implementing ERP for the retail industry

When retailers implement ERP, they can also centralize the information management to improve operational efficiency and optimize management. Retailers accumulate data on a daily basis, such as sales management, purchasing management, customer information, and accounting processing, which is an important management asset for the company. If each data is not independent but centralized, business efficiency should be greatly improved. Even if inventory information, customer information, and accounting data are separated for each store’s sales, the database information can be updated while maintaining consistency.

In addition, with sales data, inventory information, and personnel management such as shift work, it is possible to see at a glance how management resources are being allocated, thus aiming to optimize management. In particular, retailers need to be prepared to apply for purchases from any medium at any time. And since ERP encompasses the entire business process, regardless of whether the business is B2C or B2B, or the business department, it eliminates the waste of double-checking and visualizes the business status in real-time.

Selection points of ERP for the retail Industry

So what criteria should retailers make when selecting an ERP system? I will explain the points.

Meet the company’s needs

ERP systems vary depending on the server you operate and the level of integration of the system. Servers are hybrid in a combination of cloud, on-premises, and two, and system integration can be chosen in bulk or partially deployed. In addition, the features of ERP systems vary by manufacturer and package.

ERP systems require different functions depending on the business and industry, so it is important to clarify your needs in advance. Choose the one that matches your business and fits the type of product you’re selling. Check whether it is necessary to write the date of manufacture, serial number, special notes, etc., and whether it conforms to the company’s rules. Then choose a server that’s right for you. In recent years, cloud-based systems have been increasing their market share.

Consider how to operate the system after implementation

An ERP system is not a solution to everything. And it is meaningless if the implementation becomes an end in itself; ERP is not an automated system and needs to be operated and managed by human hands at all times. For this reason, it is necessary to set up an organizational structure for ERP system operation, taking into account the opinions of the field before implementation.

For daily operation, the selection points are whether a small number of people can operate and handle problems and how much you can reduce the work of the help desk for customers. In addition, the business environment surrounding companies is changing from moment to moment, and the functions and workflows required for business are constantly being forced to change. 

ERP systems are a change of organization that requires speed, and it is also important to be easy to change and add necessary functions.

Points to keep in mind when implementing ERP

When implementing ERP systems, pay attention to your relationships with retailer-specific business partners. Wholesale and retailing has a unique distribution route from producers to wholesalers and retailers via the market. Wholesale, which is still a wholesaler business, has a great influence and the transaction form from order to delivery is different. 

In addition, It is also necessary to calculate the cost-effectiveness of the ERP system and how much man-hours can be saved against the implementation cost. You also need a person who can understand the overall picture of your ERP system. It will not be easy to properly operate without someone who understands the system overview and configuration and oversees the overall operation while coordinating with the systems in each department.

Summary

By implementing an ERP system, a retailer can centralize information, such as customer information, sales management, inventory management, and accounting processing, thereby eliminating waste in the workflow and improving operational efficiency. When selecting an ERP system, it is necessary to ensure that it meets your company’s needs and you have an operating system in place after implementation, including the appointment of a system administrator.

When choosing an ERP system, you need to make sure that it meets the company’s needs and that the operational structure is in place after implementation, including the appointment of a system manager.