ERP Software

At one point in time, ERP software was most typically used in the manufacturing process or by industrial companies. Nowadays, it is fair to say that ERP can refer to packages targeted to any and every industry, and can be defined differently, depending on who you are talking to (See: How Would You Describe ERP? 20 Explanations From The Experts.

To get a deeper understanding of how ERP software can take your business to the next level, you want to learn about the following topics with these frequently asked questions (FAQ):

What is ERP Software?

Enterprise resource planning (ERP) software is an integrated suite of business applications designed to automate the back-office functions of your organization, including business processes such as financials, sales, and operations. More commonly, they can be thought of as all-in-one software for a business.

ERP system packages include a broad variety of modules that are chosen to meet the specific needs of your business. These apps and features will connect all areas of your business to create maximum efficiency. By enabling collaboration and eliminating the need to re-enter data into systems, ERP software provides a means for better financial tracking and forecasting. Comprehensive analytics allow businesses to improve insight and productivity by delivering reliable data in real-time.

By enabling sales the ability to access information about product availability, lead times, order schedules, and purchasing, sales employees are better able to manage the delivery of products and services to customers. Increasing customer satisfaction through increased operational visibility is one of the underlying goals of all ERP systems.

What Are Features of ERP Software?

To discover which enterprise resource planning software options are relevant to your specific needs, you’ll need to know what features you’ll need to implement and how you can implement them effectively to streamline business management.

• Accounting: Tracks revenues and expenses. Includes modules such as accounts payable, procurement, accounts receivable, a general ledger, and payroll for employee compensation.
• Budgeting and forecasting: Creates and manages detailed corporate financial plans, which estimate a company’s future revenues and expenses. Includes departmentalized budgeting, budget approvals, rolling budgets, predictive budgeting, dashboards, and workforce planning.
• Customer Relationship Management (CRM): Support sales, marketing, and service activities with contact management, conversation history, lead tracking, order histories, quote/invoice creation, and call center integration.
• Human resources: Provides human capital management of current employees and aids in the hiring and onboarding process for new employees. Includes features such as application processing onboarding, time and attendance tracking, and benefits management.
• Inventory Management: Tracks all information about the items that your company builds, buys, stores, or sells.
• Supply Chain Management: Manage the flow of goods and services between locations as efficiently and as cost-effectively as possible

What Are Benefits of ERP Software?

Why is a centralized, comprehensive ERP software solution necessary in the modern business environment? What is the business value of ERP? Consider some of the top benefits businesses and departments alike have experienced via improved workflows, streamlined business functions, and significant savings:

• Streamlined workflows and processes. Disconnected systems are inherently inefficient. Data may exist in multiple places at once and there is a time cost paid every time data is transferred between them. By providing a common interface and database, data is managed singularly, allowing much more efficient processes.
• Visibility into workflows. ERP can speed up internal processes and also provide the mechanism to monitor them for continuous improvement. Transparency is a central goal to effectively deploy ERP systems. ERP allows organizations to consider processes from a more holistic standpoint to spot issues preventing optimization.
• Better financial planning and decision-making. Reporting is key to ERP solutions. The ability to slice and dice data by region, location, profit center, employee, and in a variety of other ways allows decision-makers to make more nuanced and accurate decisions about the financial direction of the business.
• Improved data security. Managing security permissions and access across a variety of systems is a daunting challenge. A common control system allows organizations the ability to ensure key company data is not compromised.
• Increased opportunities for collaboration. Data takes different forms in the modern enterprise. Documents, files, forms, audio and video, emails. Oftentimes each data medium has its mechanism for allowing collaboration. That’s inherently wasteful. Employees are more effective when they spend more time collaborating on content, rather than mastering the learning curve of communicating in different formats and across distributed systems.

What Does My Business Need?

The scope of ERP systems is constrained by the variety of business operations present in the market and the ability of software developers to keep up with new requirements. ERP modules are available for virtually every task, program, or function that a business performs.

ERP solutions include modules that help with all facets of a business, but should be prioritized based on what industry your business falls under:

• Contractors and construction businesses need to focus heavily on the task at hand and spend less time worrying about their back-office procedures. Construction ERP software provides financial accounting and operational modules designed specifically with contractors in mind. Core functionalities include accounting, job costing, project management, and estimating.
• Manufacturing ERP solutions, or MRP systems, provide the necessary tools for your manufacturing company. This includes material resource planning, quality management, and inventory control.
• Supply chain businesses who primarily deal with wholesale and distribution trade need to improve the efficiency of their logistics. This includes improved order management, purchase orders for needed goods, inventory control and/or warehouse management for efficient stock control and pick/pack improvements, and tracking deliveries.

Is QuickBooks an ERP Software?

While not an ERP software in the traditional sense, QuickBooks Enterprise brands itself as an “ERP alternative”. QuickBooks Enterprise attempts to let smaller businesses get ERP-level functionality at a small business software price and offers an easy transition from their more simple options (Pro, Premier, or Online) to a business that is suddenly in need of more advanced functionality.

The software can manage and integrate all components of their businesses such as marketing, accounting, sales, costing, manufacturing, and more. The software excels at offering advanced functionality of the modules you’ll find in its Pro and Premier versions, such as advanced inventory tracking, advanced pricing, and advanced reporting.

When Should ERP Software Be Upgraded?

Technology is being upgraded and replaced at such a rapid pace, it can be hard to keep up. It’s important not to fall victim to every minor innovation, and consider upgrading or changing systems for important milestones, or reasons of security. When the time does come for an upgrade or even to purchase a new solution, you may feel overwhelmed with the volume of options available. Important questions to ask yourself include:

• Are the new functionalities I’d be adding necessary, and if so, how much training would need to be administered?
• Will these new features make us at-level, or even get a leg-up on, our competition?
• Do certain vulnerabilities exist that will impact our company’s and our customer’s financials?

Alternative, cloud ERP software includes routine upgrades and maintenance as part of the ongoing subscription cost. While you may pay more for the software throughout ownership, you’ll have peace of mind knowing you have the latest version of the software at all times.

What Are The Pain Points Of Using ERP Software?

• Replacing legacy systems. If you’re searching for new ERP software, it’s likely because what your company runs now is outdated. Older systems were coded in different languages and the software may no longer be supported by the original developer. The solution may have also been developed in-house by an employee who is no longer with the company. Maintaining support on this type of system is costly and exhausting.
• Daunting levels of customization. When ERP solutions first became a thing, heavy customization was a must to ensure the solution did what you want. This meant developers and vendors spent a lot of time writing custom customization code for your company, which was expensive. On top of that, any updates to the systems would require maintenance of the custom code. Over time, ERP systems have begun to offer standard modules that most have some use for. Nowadays, customization is limited to creating modules that will help you go above and beyond your competitors.
• Integration issues with other systems. Integration can already get messy when you are dealing with a cloud or mobile migration. Besides customization, one of the biggest headaches of an ERP implementation is the integration that may be needed with other systems. ERP vendors may push for their solution to be the fully-integrated and all-inclusive system being used at your organization. That’s not always possible. You may have a proprietary system that would be far too time-consuming for data migration. You may also have stubborn staff members who refuse to let go of an older system or refuse to be trained on a new solution. Before making the substantial investment in an ERP solution, you’ll need to have a philosophy laid out where you decide what integrations will be needed if any, and make sure your business has the appropriate budget to cover what your staff wants or needs.

What Are Current Trends in ERP Software?

• Increased use of Cloud ERP and Mobile ERP. While interest in cloud technology is growing overall, large companies still have a distrust towards cloud hosting. Our recent buyer trends survey found that companies with 50+ employees shopping for accounting software were 41% less likely than smaller companies to review cloud-hosted software.
• Artificial intelligence in ERP. A report from Nextec Group suggests that artificial intelligence can help advance ERP capabilities in years to come. This is by providing enhanced customer service through AI-generated answers, mining data during an interaction with a customer for further evaluation, analyzing the way users access and interact with the systems to create automated actions, and by using virtual reality tools in the field to let other employees interact and provide insights.
• Increased focus on business intelligence. BI tools is becoming more of a necessity for businesses of all sizes. Large enterprises are not the sole beneficiaries of the type of reporting and data that can be gathered from a valuable BI system. The above-mentioned buyer trends survey also found that companies with over 50+ employees were 70% more likely to need software that handles budgeting, business intelligence, and fixed asset management. ERP vendors will need to either invest heavily in providing a business intelligence module or look to integrate with some of the top options on the market.