Enterprise Resource Planning (ERP) is about bringing all the components of your business together to improve functionality and efficiency, all of which could have a positive impact on your bottom line.
Here is an overview of what ERP is all about together with a look at how it could improve your supply chain strategy and have a positive impact on other aspects of your business, helping you make more informed decisions and reduce wastage.
Understanding the process
Although ERP tends to benefit manufacturing businesses in particular, it is a process that offers a number of streamlining and integration advantages that could benefit many different types of companies if they adopt the principles of the system.
In basic terms, ERP is a description of the process which you use as a virtual nerve center of your business by bringing together all the various components of your operation such as purchasing, sales, inventory, sales and marketing, finance and HR, in a way that allows you to see the whole picture of your setup from one resource rather than individually by department.
The basis of your software system
A good way of looking at what ERP delivers is to see it as the hub that helps you to bring each department together into a centralized communication system.
A software system can be created around the basic principles of ERP and this will make it easier for each part of your business to share information and communicate more easily with each other.
Collating all the data from each department and putting it in one central place has obvious advantages in terms of efficiency and decision-making, as you can see how each decision or activity can impact other areas of the business and overall.
The usefulness of a software system that can update a purchase you make from an online store, for example, and then simultaneously update your inventory, finance records and purchase ledger, is easy to see when it is setup correctly for your business. You can order management software here.
Applying the principles
The analogy about ERP representing the nerve center of your business is no coincidence, as the original system was developed to mimic the functions of the human central nervous system.
If you take that idea and run with it you should be able to create your own system that standardizes and automates certain processes so that you can get access to meaningful data and free up key people to focus on other aspects of the business.
What you get out of a system like ERP depends mainly on what information you put in and how you format that data, but done properly, it can provide some valuable insights into where savings could be made and which parts of the business are most profitable.
Having valuable sales and costings information at your fingertips could make a noticeable difference to how you drive your business forward and if ERP can help you do that, it is worth looking at.
ERP is the perfect example of a true enterprise app. It is something that staff at all levels will rely on. And it manages the single most valuable asset your business owns – data. That is why you must carefully and comprehensively evaluate various options before making any formal commitments.
There are lots of ways to go about your due diligence – requesting a demo, reaching out to current customers, getting an expert evaluation of the underlying tech, considering on-premises vs. cloud etc. But one of the most illustrative resources available to you is case studies relevant to specific ERP products.
Case studies reveal a lot about a product and even more about a vendor, even if they have been created by the vendor themselves. A close reading of these documents can tell you much about the level of performance, service, and support you can expect by picking one vendor over another. Here are some features to focus on as you start diving into case studies.
Whether a Product Aligns with Your Business Needs
Most vendors will claim their product is perfectly suited to your enterprise and point to experience in or around your industry to prove it. Case studies allow you to examine how that ERP performs in environments that are as similar as possible to your own. Looking for case studies written about your competitors, about companies with similar sizes/structures, or about companies facing the same issues as you can lead you to products with a proven relevance to your enterprise.
How Smoothly You can Expect the Implementation to Go
You can find countless case studies highlighting both successful and wildly unsuccessful implementation efforts. The outcomes are important, but it is the details that are most instructive. You want to partner with a vendor that streamlines the implementation while troubleshooting the myriad issues that inevitable arise. Don’t look for case studies that describe a perfect process perfectly executed. Look for case studies that describe how the vendor and the client were able to overcome setbacks and mistakes using superior ERP resources.
The Level of Support Your Vendor is Willing to Provide
A lot of case studies taper off after the implementation. They suggest that everything has worked perfectly without a single user having questions or issues. But this is wildly unrealistic, and the second half of the story has been left off for a reason. Quality ERP support is essential, but many vendors are either unwilling or unable to be the authoritative, on-demand resources users are looking for. Case studies that obscure or ignore the importance of support should raise red flags.
Whether Claims are Facts or Fictions
ERP vendors will try and court you by making bold claims and enticing promises. But it is easy to promise anything and much harder to back it up with metrics, facts, and figures. A big reason to scour case studies is so you can put the vendor’s promises in context. For instance, if a vendor claims that its ERP has boosted productivity by 30%, the case study should tell you how, and whether there is more to that story than the figures suggest.
The information in any case study should be taken with a grain of salt. But it should never be ignored. At the very least, case studies can help you to enhance the way you interview and evaluate various vendors. Once you’ve read how they interact with other clients, you’re in a better position to explore the positives and negatives of forming your own relationship. If you want to go beyond the case studies, use them to find contacts for executives and decision makers who can give you honest, unvarnished information.
In today’s hyper competitive markets, no company can coast on its reputation and hope to survive. Unfortunately, innovation is one of the hardest things for a company to promote, achieve, and maintain. It’s a challenge akin to knowing the unknowable and succeeding at the impossible.
There are no sure-fire ways to produce innovative products, services, and processes. There are, however, tools that create the conditions necessary to foster breakthroughs. An ERP is one of them, and its ability to usher in the new is significant. If your company is struggling to find the “next big idea,” discover how an ERP can aid your search.
Eliminate Gaps in Understanding
Without an ERP, your data is likely separated by department and only accessible to authorized members. That means insights that could prove to be essential are kept behind a locked door for all but a few. An ERP opens up these doors and gathers all your data into one expansive and cross-connected repository. Once your team has easy access to any and all relevant information there is the strong potential for unexpected discoveries to present themselves.
Promote Self Scrutiny
A good ERP vendor will work in collaboration with you to customize your product to meet your business needs and workflows. During this process, businesses are forced to take a hard look at how they do things and how well those practices actually work. Forward-thinking companies use the implementation process to abandon what’s broken and improve what’s working. In the wake of the implementation, they haven’t just gained a new piece of technology, rather, they’ve gained a smarter and better way of operating.
Act in Real Time
Innovation is often a matter of seizing the right moment. When you have a cloud-based ERP in place, everyone on your team is working with the most accurate and up-to-date information available. Even if a change is made by a remote sales professional on the other side of the world, the update is integrated into the system immediately. Having the most current and therefore relevant information at your disposal enables your enterprise to make swift, confident decisions rather than being paused by uncertainty.
The ingredients for innovation are likely already present in your organization. You simply need to find a way to combine them to make a sum greater than its parts. An ERP is as much a collaboration tool as a data-management tool because it invites everyone to contribute to just about every project. Great ideas that may have languished in obscurity before are now brought into the spotlight.
Take Advantage of Special Skills
An ERP automates, streamlines, and optimizes many of the most time and labor intensive workflows your team is tasked with. Once the drudgery and distraction of these tasks is removed from their list of responsibilities, they can focus on what they really do best: selling, strategizing, organizing, managing, motivating etc. Your team can spend more time doing what you hired them to do and less time on administrative work designed to maintain the status quo. Once people are free to be their best, the conditions are ripe for innovation to follow.
Innovation is about more than simply doing things differently. It is fundamentally about doing things better. If you want to make an improvement rather than just a change, an ERP is your greatest asset.