The Benefits of Enterprise Resource Planning (ERP)

The benefits of enterprise resource planning systems include everything from more satisfied employees to sustainable business growth.

How does an ERP system make this possible?

By being a comprehensive tool designed to support business operations from start to finish. Businesses of all shapes and sizes can benefit from ERP, including professional services agencies. Some most common features of ERP software include project and resource management, financial oversight, real-time reporting, and accounting capabilities.

According to research by TEC, 50% of companies are planning to or have already started implementing or upgrading their ERP systems. The most common reasons include:

The use of modern software has been linked to various success factors. For example, it’s been linked to high-performing projects and higher utilization rates, directly leading to higher profits. It’s never too late to start implementing a new ERP system—in fact, the sooner you start, the quicker you’ll see a return on investment.

The key benefits you can realize with ERP software include:

Managing multiple engagements at once is one of the biggest challenges for successful businesses. ERP systems can support this process by integrating various business functions in a single platform. For example, an ERP system can help you connect your time tracking, build and manage budgets, and handle invoicing and purchase orders as a connected workstream.

Another significant benefit is the ability to use templates for core business processes, such as creating project overviews or generating reports. This reduces errors and improves efficiency by providing a standardized set of procedures for ERP across multiple projects. By implementing a set of best practices, organizations can address working in silos, achieve greater operational consistency, and improve compliance with industry standards.

ERP systems provide real-time access to various business data, helping managers and employees make informed decisions quickly. Tools with project and task management features can clarify progress updates and keep all stakeholders up to date, including clients. Improved visibility also facilitates forecasting, resource management planning, and allocation.

ERP systems provide businesses with a flexible framework to adapt to dynamic business needs and capacity challenges. With timely access to reliable data, businesses can respond to market or industry changes, customer demands, and internal conflicts. This adaptability provides businesses with a competitive advantage by supporting sustainable growth.

ERP systems streamline and automate business processes. By reducing hours spent on manual processes and repetitive tasks, these systems allow employees to focus on strategic activities that bring value to the business. For example, an ERP tool can allow businesses to create no-code automated processes for their workflows, such as a message being sent automatically to Slack when a task is updated. Modern software applications can also utilize the power of AI by enabling you to create, edit, and translate text directly in your software.

Another benefit of business workflow automation is that it directly impacts employee work satisfaction. According to research by Zapier, 79% of employees believe they could be working more efficiently, and 81% would stay in their current position if they could dedicate more time to enjoyable work instead of redundant tasks. Tools that support clarity and communication also decrease stress and improve workplace relationships. All of this contributes to improved engagement and productivity.

Cloud ERP helps employees coordinate tasks, share insights, and communicate efficiently.

Software that combines capabilities across various departments, such as customer relationship management (CRM) integrated with project management, helps foster cross-functional collaboration. A unified working environment drives innovation between diverse professionals and ensures teams work towards the overarching business goals.

Related: Workload Management Example

According to research by BlackLine, nearly 70% of organizations have made a significant business decision based on inaccurate financial data.
ERP systems provide reliable business intelligence. Modern software solutions streamline the tracking of internal and external expenses and revenue, simplify billing and procurement, and provide automated reporting tools. They can serve as a single source of truth for financial management, helping businesses eliminate inefficiencies and optimize budget allocation.

Another significant benefit is financial forecasting. Predicting key analytics such as budget burn for client projects, profit margins, and revenue supports strategic planning and helps finance teams and business leaders make data-driven decisions.

Read the full story: Clear Launch Has More Predictability and Consistency With Productive

Enterprise resource planning software systems bring many benefits for multiple project tracking to companies with internal or client projects. These include helping projects stay on schedule and budget by making human resources and their billable hours easier to manage (see our tips on human resource planning). Enterprise software also provides accurate forecasting, prevents future resource gaps, and provides proactive risk management. With real-time data visibility comes enhanced collaboration for internal teams, which can increase employee satisfaction and directly impact the quality of the deliverables.

Learn more: The Ultimate Guide to Professional Services Agencies Project Management

ERP systems support communications with both current and potential customers. These tools can help sales teams track leads down the sales pipeline. They support communications to ensure that every interaction is timely and relevant, increasing the chances of winning deals. Additionally, they can provide data-driven insights into sales performance and reasons for lost deals.

For current customers, ERP promotes more transparent communication and improved visibility into progress. This helps manage customer expectations, which leads to increased satisfaction with project outcomes. This helps businesses provide improved customer service and achieve long-lasting business relationships.

Comprehensive business systems provide integrated insights into business operations. This helps business leaders ensure that short-term actions are taken with long-term objectives in mind. ERP systems also enable progress tracking towards these goals, allowing for timely adjustments to keep initiatives on track and ensuring that every department works towards the organization’s success.

Many ERP systems can scale with your business as it grows and develops. This includes accommodating new users, introducing new features that cater to the needs of larger businesses, and adding integrations for third-party applications. Finding software vendors that focus on iterating and improving their software is essential, as it reduces the risk of transferring your data and operations to a new tool at a critical juncture for your business.

See more: Best ERP solutions for agencies

ERP helps protect sensitive data, both internally and externally. For example, you can use a customizable Permission Builder to control who can see and do what on your platform. This promotes effective collaboration while also ensuring that your sensitive data is safe.

Regarding security against external attacks, software solutions can offer data encryption, backups, and secure servers to mitigate risks. Another important factor is compliance with international security and privacy standards, such as SOC 2, GDPR, or CCPA.

Choosing the right ERP system will depend on your unique needs and circumstances, including business size, industry, and goals. Consider that you’re not looking for a short-term solution only — your ideal ERP system should support future growth and be flexible enough to accommodate changes in business strategy and workflows.

There are two main types of ERP systems: cloud-based and on-premise solutions. Though each has benefits and downsides, cloud-based solutions are more popular nowadays. Data shows that cloud-based solutions provide 26% faster time-to-ROI and 46% faster time-to-implementation (Aberdeen Group). As additional criteria, consider user-friendliness, scalability, and customer service.

If you’re looking for a resource management solution tailored specifically for agencies, consider Productive as your top choice. As an all-in-one platform, Productive can manage day-to-day tasks while enabling strategic initiatives and agency growth. Key features include project management, time tracking, resource planning, budgeting, reporting, and much more. This all comes with a user-friendly interface and a responsive customer service team to help you get the most out of the tool.

Book a demo today to learn more about what Productive can do for your agency.