ERP software is a class of software solutions which empowers companies large and small to consolidate internal and external data and to manage essential business processes.
An ERP is often being defined as “a method for the effective planning and controlling of all the resources needed to take, make, ship and account for customer orders in manufacturing, distribution or service company.”
This integrated business management software allows firms to automate operational back office services and to better manage their business in one system, including:
In this introduction to ERP, we will explain the features and benefits, as well as recent ERP trends.
In an ever-changing world of technology and business requirements, ERP solutions are designed to grow with your business and adapt to evolving situations including remote working and emerging forms of data access such as mobile, tablet and browser.
If your business wants your data to be controlled in-house, you can opt for on-premise deployment. For businesses which prefer the data to be available remotely at any hour of the day, ERP can be deployed in the cloud enabling system access via the internet.
ERP increases productivity whilst better managing projects and workload. Its customisation allows it to integrate with and meet the demands of a range of industries and their associated departments.
Furthermore, Enterprise Resource Planning’s flexibility provides better operational management, data collection and information insights, enabling businesses to confidently make important decisions surrounding cost reduction, streamlining and efficiency.
ERP Business Areas
Manufacturing and Resource Planning Software is at the core of many key ERP systems, especially if you choose vendors such as Infor, Sage and NetSuite. In addition to this, you can also access modules such as product lifecycle management, bills of materials (BOM), manufacturing execution systems (MES) and more.
After the advent of Big Data, most companies are now looking for an ERP system that also includes Business intelligence and data visualisation tools. For example, SAP is an ERP vendor covering all major operational areas including that of Business Intelligence, which allows companies to make key business decisions through data mining, analysis and reporting of essential business data.
Areas such as payroll, accounts receivable/payable and ledgers are core to your accounting, with vendors such as Microsoft Dynamics and Sage developing extra functionality required by specific industries and businesses.
By tracking activity across service, sales and marketing departments, customer relationships can be analysed and effectively managed. One example of a Customer Relationship Management vendor is Oracle. Again, this is a component in a broader suite of ERP applications. The focus here is to increase customer satisfaction, sales and revenue by aligning these departments.
To avoid overspending, inventory management is utilised to analyse and track current data relating to a firm’s product or component supply. This ensures that optimum stock levels are maintained. Sample products such as 200 Software and MAS 90 are geared to varying types of inventory management and can cater to the requirements of specific industries.
Supply chain management and planning can be used to adapt inventory levels as demand fluctuates by tracking goods between retail stores, distribution centres and manufacturing facilities. Supplier performance can also be monitored which will enable precise order placement.
ERP Benefits For Your Business
ERP software adapts to changing technology, meeting business requirements and keeping up with market demands. It can benefit multiple departments across an organisation:
• Reduce and control costs by effective tracking
• Automate back-office processes
• Integrate and streamline processes/workflows
• Accurate planning for sales and operations
• Company-wide information de-duplication
• Centralised and standardised training
• Increased productivity and optimisation of management processes
• Centralised product and services data
• Overall view of sales, inventory and accounts
ERP gives businesses and their management teams the tools and information required to monitor key metrics and to react with effective management and planning. Back office personnel are able to make better decisions based upon fundamental information and thus better serve the business and customers.
Additionally, Enterprise Resource Planning is best used as the key element to centralising and linking all areas of your business, improving visibility and eliminating data duplication. Integrating with your existing software, ERP can help to manage every department of your infrastructure, with each area of the business using its own module. With appropriate implementation, it can deliver scalable value long-term.
Choosing ERP Software
In order that your ERP system can assist you in achieving your company’s goals, consideration needs to be given to your future objectives. Before getting started with ERP you will need to outline these objectives so that your system is able to support these objectives and projected growth.
Key Individuals Working As A Team
Individuals from key departments should be used to identify the most important requirements for their areas. Working as a project team will highlight the requirements of the business and how it needs to work together as a whole to grow and develop. These individuals can then be allocated responsibility for software maintenance post-implementation.
External support from your ERP partner is invariably available but introducing individuals into the process in the early stages will negate the need for training further down the line, as well as providing ongoing internal support.
Having A Clear Strategy
It is essential to review daily processes within your business so that they may be mapped out during the early stages of the project. This will give you a better picture of how the software will work for your company and what impact it will have. Ensure that even external processes such as spreadsheets are also included.
You need the ERP software to be utilised by all members of staff including those in any branches or offices that you may have. This should be included in the scope of the software requirements once the functional requirements have been agreed upon.
With this information to hand and a clear understanding of your requirements, software providers can begin matching your project scope with their functional capabilities.
Thinking Of The Future
Longevity and future scalability for your business is a wise investment, therefore newer technology is an essential attribute in your chosen solution. Software will be required that can adapt to changes and growth of the business without quickly becoming obsolete.
The price of the software is ultimately going to be determined by the functionality and resource requirements, therefore careful consideration must be given to these factors when setting your budget. The larger the project, the more likely it will be that extra ERP modules are required, coming quite possibly with an additional cost for purchase or for extra development work.
Finding The Best ERP Solution
Careful consideration needs to be given to the key requirements of your company before a software provider can be selected.
Cost: Ensuring the solution is within budget
Return: Ensuring the solution provides a return on investment
Minimal Disruption: The software implementation should not disrupt day-to-day business
Functionality: Supporting and improving your current business processes should be key to the software functionality
Reputation: Sufficient research must be done to ensure the software provider is able to deliver as they claim
Expansion: The software should be able to expand and grow with your business
Support: The software provider should be able to supply support during and post-implementation
There are 3 main groups into which 90 per cent of buyers fall. Before evaluating your ERP software options it’s helpful to determine which group you belong in:
Small Businesses Buyers
It used to be expensive for small businesses to adopt an ERP system due to up-front costs and technical obstacles, but small business buyers can now benefit from an expanding choice of cloud-based options. On-site options are also available.
Enterprise Resource Planning Buyers
For these buyers, everything needs to be centralised into one system with a complete integration of departmental data. Integrated ERP solutions include Oracle, Microsoft Dynamics, SAP and others.
A stand-alone CRM or HR system would suit these buyers as their need is for a single component. A specialised system may be a better choice here as their need is for more in-depth functionality and enhanced features.
When Do You Need ERP?
Implementing an ERP is an effective way of centralising all your business processes into a unified hub. Essentially, this is where you’ll be able to access all the information and data you need in order to run your company.
There are plenty of ERP solutions on the market – all of them with varying degrees of efficiency and price ranges. However, a majority of them will be able to bring benefits such as unify your workflow, provide a single source of data, ease supply chain management, and integrate with your accounts payable.
Experts have forecasted that the vast majority of the ERP market will be held by the SME sector by 2020. In other words, if you want to remain agile and competitive, an ERP solution is absolutely necessary. Do you have yet to implement an ERP? Here’s 5 clear signs that your company needs a new ERP…
- Your current software no longer supports your needs
Unsurprisingly, most companies purchase new ERP solutions because they have outgrown their existing one. No matter how well-versed you are in making use of old software – or how “effective” you try to persuade yourself that it still is – there will be a point where you feel the work piling up, and neither you nor your old tools will be up to the task.
ERP can easily aid your daily problems. Say for example that you have made use of entry-level data processing tools, and it can no longer handle the larger volumes you need to process on a day-to-day basis. Luckily for you, ERP solutions are specifically designed to hold titanic amounts of data across the various departments – and to streamline your workflows and ensure that your systems integrate with one another.
- Your software is too complicated to handle efficiently
Having multiple systems for each of your business processes can be extremely complicated to use and maintain. Even if you were to have a dedicated IT team on hand, it would still be incredibly taxing on your daily resources.
For example, by having multiple systems installed onsite, you will need to implement those various modules and then incorporate them into your workflow and personalize them for your company. Ensuring that these systems are always updated will not only be expensive, but also incredibly time-consuming.
The best way to reduce inefficiency is to get rid of the old systems, and integrate a modern ERP solution.
- You’re struggling to keep up with customer demand
As any competent business owner knows – your customers are the lifeblood of your company.
Naturally, you cannot afford to have customers losing faith in your services, as this can lead to them jumping ship to another brand. And a near-certain way to lose some of that company-sustaining blood is by failing to deliver on the promise.
This can happen when you’re inundated with more than you can handle. Whether this is because you’re having trouble keeping track of inventory, struggling to find customer-specific information, or maybe even lacking recent sales in your analyses. These tasks, along with supply chain management, can sometimes be way too much for old software.
Once again, ERP can come to the rescue as they seamlessly organize the pertinent information into a central, easily accessible location.
- Accounting is exhausting
Manually inputting data into accounting systems can be quite a chore.
This is especially true if your company is growing. Imagine trying to combine a mix of digital information and paper-based invoices into the same system. As you get more clients, the stacks of paper get higher and higher…
Integrating your accounting processes consumes an enormous amount of time and resources. It shouldn’t take you ages to generate reports, input data, and consolidate data across multiple systems.
If it does, it’s time to contact an ERP vendor.
- Software integration is taking too much time
Well, let’s say you’re doing just fine now.
Yes, you are making use of a plethora of systems and software to keep your business running, but you aren’t actually overexerting yourself. You’re meeting your deadlines, you’re surpassing your goals. It seems like the ideal situation.
But again, as you grow you realize that the tasks and processes are taking up increasingly more of your time. Consider how you need to adjust your entire IT environment just to integrate a new piece of software to the network.
Integrating multiple solutions isn’t a cheap endeavour. You must consider licensing fees, operations and labour costs, and additional training. An ERP can remove the need for various solutions and integrations. Companies choosing ERP gets to benefit from an all-in-one suite which will ensure that they actually mesh well right out the box.
Are you ready to take your business to the next level with an ERP solution? Software Advisory Service offer you unbiased, expert advice – completely free of charge.