Should Your Company Use an Enterprise Resource Planning System?
What is Enterprise Resource Planning (ERP)?
In simple terms, ERP refers to a software package or solution used in the manufacturing or corporate data management sector. The software serves as a business management tool. It lets virtually any business manage and execute processes related to sales, accounting and customer management. The software usually includes several modules to help the company complete these processes. In the past ERPs have been out-of-the-box software solution, but more and more ERP providers are moving these software solutions to the web with the implementation of sophisticated cloud computing technology. But most ERPs typically run on any combination of hardware and network database systems.
ERP Advantages
One of the main positive function of a well-implemented ERP system is consolidation. Many small businesses and large corporations alike, may be using individual software solutions that don’t function well together. Effective ERPs consolidate all types of business management applications into one place so processes are fluid. One of the most effective advantages of ERP systems has to do with accounting. Good ERPs let you consolidate your accounting efforts so you can easily track and integrate cost, profit and revenue information for your company’s sales channels. This makes business-related processes run smoothly, and ultimately improve your company’s overall efficiency.
ERP Disadvantages
For companies considering whether to integrate ERP systems into their workflow, the main concern is cost. Incidentally, this is also one of the biggest disadvantages to consolidating your software solutions into an ERP system. ERPs, especially the most widely used and effective systems, are expensive to purchase. This can leave many small, or mid-sized organizations without a solid ERP system in place, when implementing an ERP would greatly improve a smaller company’s efficiency. Also, some ERPs may require that your IT team undergo JD Edwards training.
How to Find the Best ERP?
Sometimes it’s not as important to find the best ERP as it is to find the right ERP. This largely depends on your business structure, and how much your company can realistically spend on a software solutions upgrade. The best way to determine this is to figure out where your organization is hurting the most in productivity. For instance, if your biggest problem area is in logistics, you should shop for ERP solutions that are known for their strength in improving logistics and human resources processes.
Top ERP Companies
Some of the biggest players in the ERP space include SAP (who just purchased the multi-billion dollar cloud-based capital management company, SuccessFactors), Oracle, PeopleSoft and Invensys. Many of these top companies are moving their ERP systems into the cloud. This is likely to transform and improve enterprise-level software solutions even further.
ERP Alternatives for Small Business
The reality is that for many small businesses, ERP implementation is not always a viable option. ERPs are expensive, and not many small, or mid-sized companies are in a position to upgrade their enterprise software solutions to an ERP system. Fortunately there are a few options for small businesses.
1. Research ERP systems by major vendors in the international market.
2. Find ERP systems that operate on a more open-source framework.
3. Search for smaller, cloud-based ERP solutions.
