ERP is not just software; it is also a digital platform, a driving force behind the sustainable development of businesses in the 4.0 era. The application of ERP has become an inevitable trend for businesses worldwide, and Vietnam is no exception. Join us in exploring the future of this technology trend through the article below.
1. What is ERP? What are the main functions of ERP?
ERP (Enterprise Resource Planning), also known as an enterprise resource planning system, is an integrated management software for the core activities of a business. From production planning, inventory management, finance, and human resources to sales activities, ERP helps businesses connect and manage all information on a unified platform.
The main functions of ERP:
- Production management: Production planning, material management, monitoring production progress.
- Warehouse management: Inventory control, inbound and outbound management, monitoring the condition of goods.
- Financial management: Accounting management, budget management, financial reporting.
- Human resource management: Managing employee information, payroll, and attendance tracking.
- Sales management: Customer management, order management, distribution channel management.
Read more: What is ERP?
2. The benefits of using ERP to optimize business management
Integration and synchronization of information: ERP helps businesses consolidate all their data into a single system, eliminating the issues of data being dispersed, duplicated, or inconsistent. Thanks to the synchronization of information between departments, it helps the relevant departments have the most comprehensive view of the company's operational situation.
- Process automation: Automating repetitive tasks such as data entry, order processing, payroll calculation, reducing errors, and increasing labor productivity.
- Improving business decisions: Providing detailed reports and data analysis, helping business leaders make accurate and timely business decisions.
- Effective supply chain management: Closely monitor and manage the process from ordering raw materials to delivering products to customers, helping to reduce costs and enhance customer satisfaction.
- Enhancing production efficiency: Monitoring and optimizing the production process, minimizing waste, and increasing productivity and product quality.
- Financial management: Managing the financial activities of the enterprise, from accounting, budgeting to cash flow management.
- Human resources management: Managing employee information, attendance tracking, payroll calculation, and performance evaluation.
- Improving customer service: Helping businesses understand their customers better, thereby providing better customer service and enhancing customer loyalty.
3. Current status of ERP application in Vietnamese enterprises
Rapid growth and differentiation
Rapid growth: This growth is largely driven by the trend of digital transformation among businesses and a clear awareness of the benefits that ERP brings.
Differentiation between sectors: Although manufacturing is the leading industry, the service, retail, and construction sectors are also increasingly interested in ERP. However, the level of application and the depth of implementation still vary.
Focus on large and medium enterprises
Reason: Large and medium-sized enterprises often have large operational scales and complex processes, so the demand for a unified and highly efficient management system like ERP is very high.
Challenges for small businesses: Small businesses often face financial and resource difficulties in investing in ERP. However, with the emergence of cloud-based ERP solutions, costs have been significantly reduced, opening up opportunities for small businesses.
Diverse ERP solutions: Opportunities and challenges
Opportunity: This diversity provides businesses with many options to find solutions that suit their industry characteristics and scale.
Challenge:
- Difficulty in choosing: With many options, businesses can easily feel "overwhelmed" and find it hard to make a final decision.
- Complex integration: If the business is already using multiple different systems, integrating ERP with these systems can encounter many difficulties.
Limitations and causes
- Lack of understanding: Many businesses do not fully understand ERP and the benefits it brings, leading to delays in implementation.
- Cost: The initial investment cost and the maintenance cost of the ERP system remain a barrier for many businesses, especially small and medium-sized enterprises.
- Difficulties in change: Implementing ERP requires significant changes in work processes and corporate culture.
- Lack of resources: Many businesses lack human, financial, and technical resources to implement and operate ERP.
4. The development trends of ERP in the future in Vietnam.
ERP on the cloud platform
Cloud-based ERP is increasingly becoming a popular trend among businesses today. Compared to traditional ERP systems, Cloud ERP offers many superior benefits and better meets the needs of businesses in the digital age. Cloud-based ERP features:
- Flexible and easily scalable: Businesses can easily adjust the scale and features of the system according to their business needs without investing too much in hardware and software.
- Cost savings: No need for a large initial investment in infrastructure, low maintenance costs.
- Access anytime, anywhere: As long as there is an internet connection, users can access and work with the ERP system from any device.
- Continuous updates: The provider will automatically update new features and fix security vulnerabilities, ensuring that businesses always use the latest version of the software.
- Easy integration: Cloud ERP is often pre-integrated with other applications such as CRM and BI, helping businesses manage their operations comprehensively.
ERP integrated with artificial intelligence (AI)
The combination of enterprise resource planning (ERP) systems and artificial intelligence (AI) is creating a revolution in the way businesses manage and operate. This combination not only brings higher efficiency but also opens up new possibilities, helping businesses make smarter decisions and compete better in the market. Combined with AI, ERP will help businesses:
- Collecting and storing vast amounts of data: AI with its ability to process large datasets helps analyze, search for relationships, and uncover hidden trends within that data, thereby making more accurate predictions.
- Making complex decisions: Business decisions are becoming increasingly complex, requiring the consideration of various factors. AI helps businesses make quick and accurate decisions based on real data.
- Process automation: AI can automate many repetitive processes in businesses, freeing up employees to focus on more creative tasks.
Mobile ERP
Mobile ERP is a specially designed version of the enterprise resource planning (ERP) system, allowing users to access and manage business information through mobile devices such as smartphones and tablets. With the development of mobile technology, mobile ERP is becoming increasingly popular and plays an important role in optimizing workflows and enhancing management efficiency.
The main features of mobile ERP
- Access real-time information: Check business performance, sales figures, inventory, customers... anytime, anywhere.
- Order processing: Create orders, confirm orders, track orders, and handle returns directly on mobile devices.
- Warehouse management: Inventory counting, stock in and out, monitoring inventory status.
- Human resources management: Timekeeping, leave requests, work schedule management.
- Report: View business reports and analyze data directly on mobile devices.
ERP and Internet of Things (IoT)
The combination of Enterprise Resource Planning (ERP) systems and the Internet of Things (IoT) is creating a revolution in how businesses manage and operate. IoT, with its ability to connect and collect data from a multitude of devices, provides a vast source of information for ERP, helping businesses optimize operations, enhance productivity, and make smarter business decisions.
ERP and IoT help businesses:
- Real-time data collection: IoT collects data directly from sensors, machinery, and mobile devices, providing continuous updates on operational status, production performance, inventory status, and customer demand.
- Supply chain optimization: IoT data helps businesses closely monitor the transportation process, predict demand, optimize resource usage, and reduce costs and delivery times.
- Improving production efficiency: IoT helps monitor the production process, detect and resolve issues promptly, increasing productivity and product quality.
- Enhancing customer experience: IoT data helps businesses better understand customer behavior and needs, thereby providing better services and meeting customer demands quickly and accurately.
5. Challenges of implementing ERP software for Vietnamese enterprises
The implementation of ERP software in Vietnamese enterprises is becoming increasingly popular; however, there are still many challenges to overcome. Here are some typical challenges:
Difficulty in choosing a solution:
- Diverse solutions: The ERP market is very diverse with many suppliers and different features, making it difficult for businesses to make the right choice.
- Lack of in-depth knowledge: Many businesses lack understanding of ERP, leading to incorrect or incomplete evaluations of the software's features.
- Difficult to compare and evaluate: Comparing different ERP solutions requires specialized knowledge and supporting tools, which not every business possesses.
High investment cost:
- Software: The cost of software licenses, especially for large enterprises, is a significant investment.
- Infrastructure: Upgrading hardware and network systems to meet ERP requirements is also costly.
- Consulting and implementation services: The cost of hiring consulting firms to implement and train employees is significant.
Difficulties in changing the process:
- Resistance from employees: Many employees are hesitant about changing work processes and using new software.
- Time and effort: Adjusting workflows to align with ERP requires significant time and effort.
- Impact on business operations: During the transition process, work efficiency may be affected, causing disruptions to business activities.
Lack of resources:
- Human resources: Lack of staff with ERP skills to implement and operate the system.
- Finance: Insufficient budget to invest in hardware, software, and training.
- Time: Businesses are often busy with daily operations and do not have enough time to focus on the ERP implementation project.
Data issue:
- Data quality: The current data of the enterprise may be incomplete, inaccurate, and inconsistent, making it difficult to input into the ERP.
- Data integration: Integrating data from legacy systems into ERP is a complex and time-consuming task.
Lack of support from the supplier:
- After-sales service: Not all suppliers provide good customer support services, leading to difficulties for businesses during the ERP usage process.
- Training: User training programs are often not deep and comprehensive enough, making it difficult for employees to grasp how to use the software.
6. Sota Solutions - a leading reputable ERP solution provider
Sota Solutions is one of the leading companies in Vietnam specializing in providing comprehensive ERP (Enterprise Resource Planning) solutions, helping businesses optimize their operational processes, enhance production efficiency, and strengthen their competitive edge.
With many years of experience and a team of highly skilled experts, Sota Solutions has accompanied hundreds of businesses in successful digital transformation. Sota Solutions not only provides off-the-shelf ERP solutions but also focuses on developing customized solutions to meet the specific needs of each customer. With high flexibility and integration capabilities, Sota Solutions' ERP solutions help businesses optimize workflows, enhance operational efficiency, and create sustainable competitive advantages.
7. Conclusion
The trend of digitization and automation is happening strongly, and ERP is an indispensable part of the digital transformation process of businesses. The application of ERP is not just an option, but an inevitable trend for businesses to survive and thrive in the future. In the future, ERP will continue to evolve with many new features and technologies, such as artificial intelligence and blockchain. This will create both opportunities and challenges for Vietnamese businesses. However, with thorough preparation and a suitable strategy, businesses can fully maximize the benefits that ERP brings.