Different Types of ERP software.
Enterprise resource planning (ERP) software is composed of modules that help to manage day-to-day business processes across your organization. The critical difference between standalone systems and an ERP solution is that the ERP solution has a central database and a centralized operation engine that allows you to link different business processes in a single system, and to streamline the data flow from one process without any comprising of data integrity.
Some common areas that can benefit from ERP software include sales, finance, human resources, health and safety, compliance and risk management, customer relationship management, supply chain, production and manufacturing, project management, and others. While all of the processes for your business may not be covered by the core ERP solution that you select, there are many plugins and custom modules that can be provided by your vendor or implementation partner to cover almost any requirement.
I – ERP capability examples
Occupational health and safety management.
Targets for all departments are managed centrally with roll-up reporting integrated to HR records.
All training requirements and attainments are linked to employee records. Integration with a learning management module allows automated, standardized onboarding, and training. Digital signatures manage compliance, and all non-compliance is flagged for action. Reporting is automated.
All issues, incidents, and near misses are managed in one place and cross-referenced to products, production lines, shift patterns, employees, line managers, etc. Pattern identification, proactive safety strategies, and mitigation strategies are handled in one place.
Compliance management. Sign off on return to work, and action plans are automatically assigned to the right people at the right levels at the right times. Non-compliance is flagged and reported.
Expense management or request to purchase. All spending and costs related to an initiative, incident, or program are integrated with the financial systems.
Trend, exception, KPI, and compliance reports are pre-configured and generated automatically by logical business unit or employee group.
There is a lowered cost and employee time overhead to deliver decreased lost time accidents and increased compliance.
Integration and standardization of multi-department budgeting, financial management, and reporting.
Integration to project management modules, sales forecasting modules, payroll and HR, production and supply chain, and procurement allows timely actions and accurate reporting.
Financial transactions automatically impact the general ledger.
Data analysis and decision making through a companywide view of timely, consolidated information. The provision of analysis by different financial dimensions and the relevant dashboards for individual departments.
Access to templates reflecting the accounting standards of each country to ensure smooth compliance where your business is spread across multiple countries. All geographies are integrated to provide a seamless and automatic roll-up.
Access to an increased business intelligence capability that allows you current, relevant information at the correct levels to make meaningful decisions across all departments.
An end-to-end view of your supply and sales cycle. Your forecast tool is linked to your customer records in your CRM, allowing your sales team to input forecasting against customers directly.
Forecasts are rolled up and used to produce raw material requirements and production schedules. All schedules operate in real time and are updated automatically.
Inventory management. Sales forecasts are linked to inventory management, and potential issues are highlighted in real time. Seasonal stock tolerances are adjusted automatically. Forecast vs. actual sales variations are flagged, and supply chain volume requirements are managed proactively.
Your purchasing process is fully integrated across the rest of the supply chain capability.
A confirmed sales order can generate a transaction for your finance department, a work order for your production team, and an action to your procurement team,
Income and expenditure are managed against product lines, sales teams, business units, or relevant areas for your business.
Performance management. All KPIs are reported in real time to the correct people and managed by logical business groups.
Real-time reporting is available promptly to the right people with clear visibility across the end-to-end supply chain for all the key metrics that matter to your business.
The warehouse management and distribution center functions have access to up to date and verified information.
Accurate and timely data allows decision making across your supply chain that increases efficiency, lowers unnecessary inventory, and increases customer satisfaction.
II – The Key Benefit of an ERP solution
The key benefit of any ERP implementation is to centralize information and to make it readily available to all functions that can benefit from access to that information. The type of ERP implementation that will work for any organization will depend on several factors, including:
The current systems and process maturity of the organization.
The ability of the team to absorb change, both of process and culture.
The skills and capability of your delivery team or your implementation partner
III – Types of ERP solution
ERP systems can be broadly grouped into three categories. These categories can contain ERP solutions that are SaaS, locally, or cloud hosted. A qualified and independent ERP implementation partner will be able to guide you in choosing the perfect fit for your business.
Low. These are generally out of the box solutions with a minimum of available customization. The implementation is quick and easy due to this lack of customization. These are often localized systems from vendors that cater to small market sectors.
Medium. These solutions allow some customization and a more comprehensive range of capabilities and modules. The vendor customer base is more extensive. Implementation can still be done relatively cheaply and quickly where customization is minimized.
High. These solutions offer the broadest range of capabilities and service large customer sectors across geographies and industries. A powerful and wide range of system functionality can be fully customized to meet any requirement. These solutions are usually on the bleeding edge of the technology curve. Implementation of these customized solutions naturally requires a larger budget of both time and money.
VI – Conclusion
An ERP system can revolutionize the way you run your business. However, to quote Spiderman, “With great power comes great responsibility.”
Selection of the wrong ERP solution, a poorly managed implementation, or insufficient change management can all result in a negative outcome.
For most businesses, the positives of an ERP implementation outweigh the risks many times over, and with a well-managed selection process, your business could see the same boost in productivity and capability that has seen ERP solutions become standard across the range of business sizes and sectors.