ERP software is a class of software solution which empowers companies large and small to consolidate internal and external data and to manage essential business processes. This integrated business management software allows firms to automate operational back office services and to better manage their business in one system, including:
Sales, including E-commerce
Accounts and finance
Management of Supply-chain
Manufacturing and Logistics management
This introduction to ERP explains the features and benefits of the software, as well as the trends in the world of ERP.
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.
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.
A business requiring that data must be controlled in-house can opt for on-premises deployment, restricting access to the confines of their own buildings. For businesses which prefer their data to be available remotely at any hour of the day, ERP can be deployed in the Cloud enabling systems access via the Internet.
Vendors such as Epicor and Lawson Software (now Infor) help businesses to manage areas such as employee tracking, staff evaluation and education, skills administration and benefits management.
Manufacturing Planning and Resource Software is the core of a large number of key ERP systems with vendors such as Infor, Sage and NetSuite. Product lifecycle management, bill of materials (BOM), manufacturing execution systems (MES) and more are also included as other modules.
SAP is an example of 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 have remained core to 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 and depreciation, 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 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 on-going 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 as to 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.
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.
Current ERP Trends
It’s worth seeing what trends are currently happening in the market. Many ERP vendors are consolidating and, in addition, adoption of software as a service (known as SaaS) is on the increase. Here are a few key trends.
Buyers need to consider acquisitions of niche vendors by the larger vendors when evaluating systems. It’s a trend which has been taking place for a long while but appears to be on the increase. Consider a vendor’s strategic viability and financial position before making a choice. Your vendor could be acquired and in a worst-case scenario, their product discontinued leaving it with no updates and unsupported.
Adoption Of Software As A Service
Many ERP vendors are now able to offer a web-based option which runs using a web browser for its user interface. Quicker implementation and lower initial investment make this an attractive alternative to on-premises systems for many. It also saves on costs for full-time system maintenance staff or contracts.
Apps for mobiles are now commonplace and ERP vendors have ensured that they are in the marketplace by developing mobile interfaces to support their systems. SAP, Epicor and Oracle already have apps of their own.