12 Ways Your ERP System Can Help Your Company with Compliance

There are many reasons that a company chooses its enterprise resource planning (ERP) system from improving efficiency to streamlining operations.The best ERP software will certainly deliver that and more as ERP suites can manage day-to-day business activities such as accounting, procurement, project management, and supply chain operations.

A bonus for your business, which may not be on the first slide of the ERP system sales presentation but is crucial to your business's success, is that ERP software can help your company with risk management and compliance.

ERP’s Role in Compliance a Core Functionality

SoftwareAdvice.com calls ERP’s role in compliance a core functionality: “This far-reaching functionality is core to one of the most essential—and consequential—benefits of ERP software: its role in helping businesses achieve regulatory compliance. Businesses that violate industry rules, wittingly or unwittingly, could face crippling financial penalties. Yet keeping track of and adhering to all applicable rules is no small task for any organization, let alone a small one with limited resources.”

There are even research papers such as “The Use of an ERP System to Facilitate Regulatory Compliance” that have studied how ERPs can play a pivotal role in compliance.

“The findings demonstrate how managers can use an ERP to develop effective internal controls for the most common material weaknesses reported under Sarbanes-Oxley Act 2002 (SOX), thus providing insights into the crucial role of IT as a facilitator of control and reporting processes, and, more specifically, into the role, use and purpose of ERPs about regulatory compliance,” said the paper’s extended abstract.

ERP Can Help Improve Security and Compliance

CEO World magazine says that ERPs can help improve both security and compliance for your company.

“ERP systems provide greater visibility into key performance indicators (KPIs) that can help you make more informed decisions. With real-time insights into your operations, you can quickly identify areas where improvements can be made,” says the CEO World.

The article says a key component of an ERP System includes:

• Enterprise resource planning software
• Business intelligence and analytics
• Automated workflow and process management
• Reporting and dashboards
• Mobile access
• Security and compliance management

"To ensure the security and compliance of their ERP systems, businesses need to have deeper visibility into the data stored within the system. This can be accomplished by using advanced security measures such as encryption, multi-factor authentication, data masking, and role-based access control,” said CEO World.

ERP systems can be configured to make sure:

• Sensitive data is protected from unauthorized access.
• Suspicious activity or anomalies in the system are detected and authorized personnel are alerted immediately.
• Any malicious activity is flagged and addressed before it can do any damage.
  
  

“By having deeper visibility into the data stored in their ERP systems, businesses can be confident that they are meeting all of the requirements for compliance and security,” concluded CEO Magazine.

A Dozen Ways that ERPs Assist with Compliance

You can likely find 101 ways that ERPs can assist with compliance but here are 12 ways that your ERP system can help your business with compliance issues by providing a centralized platform for managing and tracking compliance-related activities:

• Standardization: ERP systems provide a standardized approach to compliance management across an organization, ensuring that all relevant policies and procedures are consistently applied.
  
  
• Regulatory compliance: ERP systems can help businesses comply with regulatory requirements, such as data privacy regulations, by providing tools for data management and security.
  
  
• Risk management: ERP systems can help businesses identify and manage compliance risks by providing real-time data and analytics on compliance-related activities.
  
  
• Auditing: ERP systems can provide audit trails and documentation to demonstrate compliance with regulatory requirements.
  
  
• Automated workflows: ERP systems can automate compliance-related workflows, such as approvals and notifications, to ensure that compliance activities are completed on time and in accordance with established policies and procedures.
  
  
• Automate manual processes: ERP systems can automate many of the manual processes that are often associated with compliance, such as document generation and tracking. This can free up employees to focus on other tasks, such as developing new products or services, and can help to improve the overall efficiency of the business.
  
  
• Integration with other systems: ERP systems can integrate with other systems, such as finance or HR, to ensure that compliance-related data is shared across the organization.
  
  
• Transparency and Visibility: ERP systems can help extract data from complex billing structures to help companies accurately report revenue.
  
  
• Error Reduction: ERP systems can help eliminate errors in data tracking and management, reducing the chance of errors that could make your company non-compliant.
  
  
• Centralized data: ERP systems provide a centralized repository for all of the data that is required to meet compliance requirements. This data can be easily accessed and analyzed by employees, which can help them to identify potential compliance issues and take corrective action before they become problems.
  
  
• Generate reports: ERP systems can generate reports that can be used to track compliance progress and identify areas where improvements can be made. These reports can be used to demonstrate compliance to auditors and regulators.
  
  
• Provide training: ERP systems can provide training to employees on compliance requirements. This training can help employees to understand their responsibilities and how to comply with the law.

For those companies in the middle of planning an ERP upgrade or transformation, you should focus on how your new software can help your company with compliance, especially if your business works with sensitive data with regulatory restrictions. If you need our help, please reach out.