What is an ERP ?

What is an ERP ?

ERP stands for « Enterprise Resource Planning» It is a full digital solution for enterprises allowing most aspects of the company to be managed using only one solution.

ERP : Which company is concerned ?

Many companies are still using a wide variety of different software to assist each department: finance, marketing, project management, manufacturing and so one. Usually, every of these solutions is well adapted to do one task. The issue lies in the lack of communication between departments:
– Either the communication is not made : In this case, there is a lot of unexploited data and many redundant tasks that could be automated are manually done.
– Or the communication is made though properly configured integration: In this case it can be hard and expensive to maintain in the long run. The tools used are usually not suited to handle a good and safe communications between each other.

If this situation was legitimate a few years ago, many solutions now exist to manage most aspects of any company in one powerful software: the ERP. Integration will often still be necessary for some specific and very specialized software but the goal is to reduce its number at a minimum.

Now that we understand what company is concerned, what department is managed by the ERP?

The ERP : A solution for every department.

As we saw, the ERP will help to manage the company as a whole, using only one big database for all departments.

Being a full digital solution, the ERP will centralize every tool necessary for most companies. Not every ERP will provide the same services and some solutions will be more complete or specialized than others. This is a non-exhaustive list of what you can expect from ERPs :

  • CRM and sales
  • Finance and Accounting
  • Manufacturing and distribution
  • Inventory management
  • Time and project management
  • Human resource management
  • Integration solutions
  • Data analyses and reporting

Every aspect of the company being connected to this one solution, it is then easy to cross data, identify redundant tasks and create automation. The real goal of the implementation of an ERP is to get the best return on investment in the long run.

What can you expect from an ERP ?

If the final goal is to get the best ROI from the ERP, what are the key aspects that will improve your company’s profit directly or indirectly?

Quality data : Gathering everything in one clean database will provide standardized strong data.

Reporting : This quality data will allow your company to cross it and create quality reporting. This might show hidden correlations to be exploited through analytics and monitoring.

Directions : These reports and centralized information will allow the company’s management to have a good overview of the enterprise as a whole, to identify trends and make better decisions.

Better understanding : The ERP not only gives you good information regarding the company but will also help you to know your customers better. This will provide the information to give them better services and products leading to more satisfaction and conversions.

Increase productivity : The ERP is also made to create automation and to reduce redundant tasks, allowing employees to focus on more valuable tasks

Improve collaboration : Being able to manage data sharing and communications between every department also means to facilitate collaborations inside and outside the company.

Competitiveness : The ERP will globally improve your company’s efficiency, leading to differentiation and competitiveness.

An ERP is a complex tool to implement:

An ERP is a very complete and powerful tool that can greatly help your company to grow quickly and to think on the long run. But it is now important to understand the downsides of it. Because of its size and complexity, the implementation can be a long, hard and expensive process. Many ERPs are available on the market from the open source solution (Like Odoo) to the most expensive one (Like Salesforce). Choosing the one that suits your company is the first cornerstone of the process. To implement an ERP too expensive or too complex regarding the expectations, size and income of the company will often lead to a loss a time and money if the project is even completed. At the opposite, a company implementing a solution inadequate for the company on the long run will lead to unwanted limitations and sometimes will require another ERP implementation. The implementation must be handled perfectly to get the most of the solution. The implementation of an ERP is very complex because it has to connect together and configure the tools of each department , grant the right access for each individual and to make the proper integration with external specialized tools. This work implies a deep understanding of the company, the needs and means at stake along with a profound knowledge of every solution available on the market. This is why hiring an independent ERP consulting agency can be a good choice on the long run. If an ERP is an amazing tool, it is important to understand the needs of the company to get the proper solutions, to implement it with care and to train every potential user.

The Enterprise Ressource Planning in short

When a company grows it becomes necessary to rethink the tools used and the necessity of implementing an ERP becomes obvious. This solution will greatly assist the company as a whole and provide valuable solution to get the most of it. To make the choice to set up an ERP at the right moment will make the transition easier and considerably reduce the inertia related to changes. In another hand, it is important to apprehend the consequences of such a big decision. The implementation will involve a big investment of time and money. This investment should be profitable in the long run but for it to be so, the implementation has to be done properly and with the right solution that fits the needs of the company.