What is ERP?

What is ERP?

ERP stands for Enterprise Resource Planning. ERP software is comprised of powerful and strategic business process management tools that can be used to manage information within an organization. While every company and organization operating today is different, they all face a common challenge: in order to stay competitive in today’s business environment, they need a dependable and efficient way to store and access information. That’s where ERP systems come into play. ERP systems integrate all facets of an enterprise into one comprehensive information system that can be accessed by individuals across an entire organization.

With effective ERP software in place, business owners and leaders can automate and streamline tedious back office tasks, help employees become more productive and successful in their roles, and get real-time visibility into the inner workings of their operations. This resource will provide you with an in-depth overview on the topic of Enterprise Resource Planning. It includes information on the following:

To succeed in today’s increasingly competitive and complex business environment, you need to put systems in place that allow you to easily streamline, automate, and scale. This resource will put you on the right track toward choosing, implementing, and managing an ERP system at your organization.

What is an ERP System?

An ERP system is made up of applications and tools that help all areas of your business communicate with each other more effectively. ERP systems integrate all facets of an enterprise into one comprehensive information system. Employees in planning and scheduling, for example, have access to the same data as the staff in financial management for their specific needs. All data is available in real-time, which enables employees to make faster, more informed business decisions. With ERP systems, all vital business functions—estimating, production, finance, human resources, marketing, sales, purchasing—share a central source of up-to-the-minute information. Enterprise resource planning systems streamline the collection, storage and use of your organization’s data. The right ERP system can help you collect and store data into one centralized place from areas such as:

  • Finance & Accounting
  • Human Resources
  • Customer Relationship Management
  • Production Management
  • Business Intelligence
  • Warehouse Management
  • Inventory Management
  • Supply Chain Management
  • Point-of-Sale (POS)
  • eCommerce

 

Primary Benefits of ERP Systems

Why are more businesses of all sizes implementing ERP systems today than ever before? Here are some of the main reasons and benefits why organizations use ERP systems:

  • Provide business leaders with real-time visibility into their operations.
  • Provide business leaders and teams with instant access to their global supply chains.
  • Enable business leaders to identify challenges, uncover opportunities, and make faster decisions that impact different areas of their businesses.
  • Help automate and streamline tedious tasks and redundant processes.
  • Give employees the tools and data they need to be successful.
  • Provide a single point of truth for organizations.
  • Can often be accessed from anywhere (off-site and from mobile devices).
  • Help increase productivity among your team.
  • Make it easier for teams to collaborate with each other, and with third-party vendors.
  • Offer powerful reporting and forecasting tools that you can use to make informed decisions about the future of your business.
  • Keep data secure, and help you ensure that your business continues to operate in compliance with global regulatory laws and guidelines.

 

How To Decide If/When Your Business Needs ERP

Every business is unique and faces different challenges at different times, so the question is, how do you decide if and when investing in Enterprise Resource Planning is right for your business?

If you’re able to check off most of the items on this list, it’s probably safe to start evaluating ERP software providers and working to allocate the resources needed for deployment:

  • Your team members are spending too much time on tasks you know could be automated and streamlined.
  • You don’t have easy access into the data you need to make informed decisions about your business.
  • You work with vendors and third-party applications across the globe.
  • You have a lot of different software tools and processes that you’ve adopted and implemented for your business over the years, but they are not connected to each other.
  • You don’t know what your inventory levels really look like on a daily basis.
  • You’re personally spending too much time searching for information, trying to boost productivity and efficiencies, and integrating new tools that are needed in order to scale.
  • Your teams can’t easily collaborate or share information with each other.
  • You can’t access essential business data and information when you’re off-site.
  • You’re having trouble keeping up with changes in regulatory compliance.
  • You’re finding or addressing problems after it’s too late; in other words, you’re not able to be as proactive as you’d like when it comes to identifying problems that need to be fixed in order to keep your operations running smoothly.

If you can check off at least sixty or seventy percent of the list above, it’s time to start exploring vendors.

In order to justify the investment needed in order to use an ERP system at your business, use the checklist provided above. List the specific challenges you think your organization is having, and talk with your decision-maker about how you think an ERP solution could help.

 

How to Choose the Right Solution

If you’re looking for your first ERP solution or looking to upgrade from an existing system, the evaluation, selection, and implementation process is a long-term strategic decision for your organization.

To help you through this process, here are eight simple steps for a successful ERP system selection:

  • Step 1: Evaluation – Get members of your leadership together and get the initial conversations going about ERP. Make sure everyone has transparency into how you are evaluating providers.
  • Step 2: Make An Assessment – Look critically at your business and operations to determine what’s working well, what challenges you’re experiencing, and what you think you need in order to scale or make improvements.
  • Step 3: Establish Criteria – Develop a standard criteria to use when evaluating vendors. Criteria can include features, price, platform, and anything else your team thinks is important when making evaluations.
  • Step 4: Schedule Consultations – Schedule phone calls, in-person meetings, or online demos with sales representatives and product experts at the vendors you’re considering. Get a first impression about each company and try to make note of the differences between the vendors you talk to.
  • Step 5: Create a Shortlist – Narrow your list down to 2-3 candidates that you’d like to follow-up with.
  • Step 6: Make Contact – Contact vendors on your shortlist and schedule follow-up calls to learn more about how their products could help your business.
  • Step 7: Prepare Questions That Address Your Concerns – Prepare specific questions that you’d like each vendor to address during the follow-up call.
  • Step 8: Check Vendor References – Talk to other companies that have implemented ERP systems from the vendors you’re considering. Find out what they like, what they don’t like, what they weren’t expecting, if they’d actually recommend the vendor you’re asking about, etc. Get as much information from them as you can in order to make a final decision. Once you’ve selected the ERP vendor for your business and needs, spend the time to scope the entire project, from start to finish. Work with your ERP vendor to map your critical milestones and chart your course to success.

 

Implementing an ERP System At Your Organization

When you’re finally ready to implement an ERP system at your organization, follow these best practices and tips to ensure your success:

  • Understand business processes and key requirements. Gain a complete understanding of all the areas, processes, and tools that make up your business. Spend time documenting problem areas, processes that work, questions you have, and any other observations you want to record in preparation for implementing a new system at your business.
  • Build a business case for ERP with a positive ROI. Make a list of the benefits of implementing ERP software. Share your list with team members, decision makers, and key stakeholders. Focus on what’s not working at your organization now, and how you think an ERP system will help. Decide on key performance indicators (KPIs) that you can measure against once the new system has been fully implemented across your organization.
  • Ensure proper project management and resource commitment. Assign a member of your team with the task of managing the implementation process from start to finish. Make sure that person has the resources they need to be successful.
  • Gain executive and organizational commitment. Get the full support and commitment of everyone at your organization, from to bottom. Make sure everyone understands what you’re doing, why you’re doing it, and how it affects them and their work.
  • Recognize the value of early planning. Reduce the amount of time it takes to fully implement an ERP system at your organization by planning ahead. Think about the resources you’ll need along each step of the way to make the deployment phase go as smoothly and efficiently as possible.
  • Focus on data migration early in the implementation process. Decide how much historical data you want to migrate into your system, then make plans to start the migration process as early as possible. Waiting until the end can wreak havoc on your business operations. Invest in training and change management. Give employees and team members enough time to understand why you’re implementing a new system, and how it will affect their roles. Make sure everyone is on board and encourage team members to reach out to you if they need help.
  • Know why you’re implementing ERP. Remember why you’re implementing a new system in the first place. Define requirements, establish metrics, and build a business plan that clearly articulates what benefits the company expects from an implementation.
  • Get outside help when you need it. If you think you’ll need a little extra help during any part of the implementation process, reach out to a consultant and leverage them for their expertise and advice.
  • Following these recommendations and best practices will make the entire implementation process go a lot more smoothly. They will also help you get the buy in you need from your employees in order to hit the goals and KPIs you want to be working toward once the system is in place.

 

Wrapping Up

To build a sustainable, scalable enterprise in today’s business environment, you need to use tools that help you streamline tasks, boost productivity, and leverage data in real-time. The right ERP system can put you on the right track. Ready to make the investment? Contact us to get started.