1. What is Enterprise Resource Planning?

Enterprise resource planning (ERP) is an umbrella term that covers all core business functions of an organization. It covers production, procurement, marketing, maintenance, finance, supply chain, human resources, and other critical processes. An ERP system is a software suite with multiple applications to integrate and automate the core business processes and data on a single system and coordinate operations through a leveled multi-user interface. It works as an aid to organize operations and run all departments of the company in harmony.

 

When a business outgrows a certain size and turnover, the differences in the line of action at inter-departmental and inter-departmental level stalls the operations. This creates multiple bottlenecks for the organization and exposes it to systematic risks. For instance, the orders made by the procurement department are shared with the inventory and warehouse management teams. The tasks to clear the storage area for the incoming inventory are assigned by the system using the automation workflows.

 

The BI reports are generated for the management to take strategic decisions and make necessary changes in the operational framework. Thus, ERP solutions also ensure that the Governance, Risk Management, And Compliance are met properly. ERP solutions facilitate the bidirectional flow between concerning applications and automate the administrative processes.

 

Attractive opportunities in the cloud ERP market

Source: www.marketsandmarkets.com

 

 

By 2025, the cloud ERP market is expected to touch a staggering $101.1 Billion.

 

Types of ERP Systems

We can classify ERP systems into three segments based on their architecture. They are as mentioned below:

 

 

On-Premises ERP System

This type of ERP solution is installed directly on your hardware present at the deployment site. These types of solutions are generally difficult to use as your copy of the software can be utilized at a particular location with the heavy licensing fees being a point of concern. Also, the updates are slow, and getting onsite support can negatively impact your operations since the vendor’s teams need to access your systems physically. All of these factors make on-premises software very costly.

 

 

Over-the-Cloud ERP System

The SaaS (Software-as-a-Service) model for ERPs bypasses the perils of the on-premises solutions also known as legacy software. The updates are made on the vendor end and they are reflected instantly on the client’s system. Also, they can extend support on a remote basis. Combining it with the pay as you go subscription plans, cloud-based ERP solutions cost significantly less and they also come with many strategic benefits. 

 

 

Hybrid ERP System

Hybrid ERP software is a combination of the on-premises and cloud architecture where the hosting and deployment are subject to variation. These models are considered more efficient in integration with other software solutions and hence they deliver greater flexibility.

 

Some of the popular ERP solutions providers include SAP, Microsoft Dynamics, and  Oracle.

How ERP Software Helps In Various Business Processes?

This section will help you understand how various applications of an ERP suite can aid different business processes in your organization.

 

 

Manufacturing

Manufacturing is a complex process that includes production using raw materials and semi-finished goods, quality assurance, R&D, production planning, and control. It depends on the data provided by other modules, including sales forecasting data, customer feedback, and supply chain management inputs. This module also looks after predictive maintenance scheduling.

 

 

Inventory And Warehouse Management

Managing the on-hand stock as well as the goods in transit for raw materials and semi-finished items is an exhaustive business function managed by inventory control systems. Without them, ensuring that all the items required for running productions are available as halting the manufacturing process can cause heavy losses. The maintenance items are also included in inventory management. Warehouse management software helps allocate the available storage space and provides data regarding the stored inventory using the tightly integrated database used by the inventory management system.

 

 

Human Resources Management

Human resources management is one of the core business functions as it is the only dynamic resource that directly affects each and every business process. The HRM module collects the employee information, manages shifts and attendance, and facilitates compensation, reimbursements, retirement benefits, and performance management.

 

 

Finance And Accounting

This module facilitates record-keeping and financial operations both within and outside the organization, including the cash flow. This module provides the data necessary to keep your finances healthy and ensure that your organization is adhering to all the compliance regulations appropriately. 

 

 

Supply Chain Management

SCM software covers all parts of your inward and outward supply chain, including procurement. The SCM module helps in keeping a steady flow of inward materials and coordinates with your logistics partners for delivering finished goods as per the schedule.

 

Supply Chain Management in ERP - Orderhive

 

 

Sales And Marketing

The full sales life cycle, as well as support operations for placing the products in the market and demand generation activities, are managed under this module. This module helps you run multiple marketing campaigns and ensures supply to your goods is satisfactorily supplied to your customers.  

 

 

Customer Relationship Management

The CRM module provides you with a 360-degree interface for managing all transactions with your customers ranging from onboarding to servicing. It helps you acquire and manage the customer profile data for running marketing campaigns. Having a CRM is extremely important for the ecommerce sites as they rely heavily on retargeting the old customers to get maximum repeat business.

What is an eCommerce ERP System?

When compared to the traditional ERP solutions, eCommerce ERP systems are aggressive and ten to use the SaaS model for agility. They are tightly integrated with dynamic architecture models like ‘headless eCommerce’ for better integration capabilities. These ERP systems are developed especially to meet the demands of the ever-evolving eCommerce sector and help businesses grow sustainably in the online selling business.

 

eCommerce ERP system - Orderhive

2. Perks of Having an ERP System

There are many reasons why Enterprises install ERP systems. ERPs not only secure the information and make data transfer easy, but it also helps to automate processes, generate reports, and gives you access to all of your industry’s data in one place.

 

To know all about the benefits of ERPs, read the below-given advantages.

 

 

 

ERPs are Secure Customer Satisfaction
Enhanced Efficiency Workflow is Standardized
All IT expenses are focused on one Centralized System Easy to comply with Regulatory Bodies
Reporting and Analyzing made easy You can aim big with ERP

 

Enhanced Supply Chain Management Transparency

 

ERPs are Secure

ERP - Orderhive

The safety of data is the USP of an ERP system. Information is centralized and only produced when demanded, and there are ways through which restrictions can be placed on how much a person in your industry/ company has access to it. Moreover, you can also allow each department to access the data required by that particular department only.

 

▲ Back to “Perks of Having an ERP System”

 

Enhanced Efficiency

Efficiency is a word that everybody looks for in any software or process’ or an individual’s performance. Since everything is concentrated in one place and all the departments are interconnected, you can get things done in a much quicker way, leading to improved efficiency of the entire system.

 

▲ Back to “Perks of Having an ERP System”

 

All IT Expenses are Focused on One Centralized System

With no centralized system in place, there is a tendency to spend a lot of money on different types of softwares managing other things and the expenses in the staff’s training. ERPs can include all sorts of softwares like CRMs, accounting, HR management, inventory management, supply chain management, and warehouse management. This way, you only have to concentrate all your expenses in one place, and you’re done.

 

▲ Back to “Perks of Having an ERP System”

 

Reporting and Analyzing Made Easy

Generating accurate and elaborate reports is something that becomes very easy for users of ERPs. Also, analyzing and comparing the workflows of different departments becomes an easy task with detailed reports. You don’t have to worry about creating long spreadsheets.

 

▲ Back to “Perks of Having an ERP System”

 

Enhanced Supply Chain Management

For companies that deal with production and supply of products or with the inventory that is always moving, ERPs can be a boon that helps track the supply chain and boost efficiency by reducing lead times and delivering goods on time.

 

A well established ERP system can help in demand forecasting, inventory management, warehouse management, purchase management, and reporting & analysis. This helps in improving the productivity and supply chain along with a cost reduction.

 

▲ Back to “Perks of Having an ERP System”

 

Customer Satisfaction

 

Now with increased efficiency and shorter timelines, you can impress your clients a lot more easily. You will also have more time to invest in nurturing a better relationship with your customers so that you can retain them and get more business from them. 

ERPs also include CRMs, with the help of tracking a customer’s behavior and knowing what the client is looking for.

 

▲ Back to “Perks of Having an ERP System”

 

Workflow is Standardized

ERPs are generally designed to keep the industry’s best practices in mind, which helps the users as most of the processes are tried and tested. This makes it easy to operate and handle operations. The tried and tested methods consistently deliver results, and there is only an upward way from there. 

Nowadays, most of the functions are automated, which reduces time and money wastage and the departments being synced in a better way.

 

▲ Back to “Perks of Having an ERP System”

 

Easy to Comply with Regulatory Bodies

Meeting compliance requirements is the most challenging thing in a business, and ERPs are a system that follows a standardized approach. It becomes extremely easy to meet the regulatory bodies’ accuracy in financial and other sorts of records.  

Furthermore, ERP sellers already take care of regulations such as the Federal Information Security Management Act (FISMA) and the Sarbanes–Oxley Act (SOX).

 

▲ Back to “Perks of Having an ERP System”

 

You can Aim Big with ERP

The reason why most big industries opt for ERPs is because of their scalability potential. No matter how big your business gets, ERP can manage it easily.

 

ERP can accommodate everything right from the expanding customer base to creating or introducing new departments and processes. ERP can grow with your dreams, and just like them, it has no limits. Although there are a few disadvantages, then nothing is perfect.

 

▲ Back to “Perks of Having an ERP System”

 

Transparency

ERPs provide excellent transparency to its users. You can check real-time inventory levels and other types of data anytime, thus helping users create a more coherent process to yield a high level of efficiency.

The instantaneous feed of data also makes processes easy to execute that have different departments working on them.

 

▲ Back to “Perks of Having an ERP System”

 

3. Steps to Successful ERP Implementation

Assembling a Task Force

One of the first and foremost things to do while starting an ERP project is to put together a smart, efficient group of people. Provide each of them with specific tasks regarding ERP implementation and arm them with the necessary resources.

ERP Implementation - Assembling a Task Force - Orderhive

 

A typical ERP implementation team looks something like this:

 

  • Project lead
  • Data Analyst
  • Developer(s)
  • QA engineer(s)

 

However, remember that you’re creating a system that is going to be used by the employees across your entire organization. So it’s vital that you should have key stakeholders from different arms of your company so as to not make the entire project merely an IT exercise, but a meaningful transition for the company.

 

▲ Back to “Steps to Successful ERP Implementation”

 

Transition Planning

Here’s the thing- ERP systems do take a whole lot of time to get implemented successfully across an organization. As we’ll learn in this article, the process is often met with unforeseen hindrances and delays that need to be accounted for. However, the organization cannot come to a halt every time a small snafu occurs.

 

Hence, while the implementation is going on, it’s important to have proper measures in place that minimize the disruptions caused due to tectonic shifts in the functioning of the organization. The process is tricky, but achievable if the following steps are taken:

 

  • Keep the workforce in the loop about any possible system failures.
  • Understand the requirements of each and every department.
  • Plan the testing modules well in advance

 

▲ Back to “Steps to Successful ERP Implementation”

 

Budgeting and Forecasting

A lot of ERP projects end up becoming massive financial liabilities for organizations that fail to manage the budgeting process. However, if some of the most essential costs are planned for, these risks can be avoided.

ERP Implementation - Budgeting and Forecasting - Orderhive

A variety of factors such as the functionalities, size of the company, number of users, etc. affect the overall project costs. You can perform different permutations and combinations to find out just how extensive do you want the software to be, based on your budgetary constraints. However, as a rule of thumb, you should set aside 1% of your organization’s annual revenue for a smooth ERP implementation.

 

▲ Back to “Steps to Successful ERP Implementation”

 

Data Preparation and Migration

Once you’ve designed an ERP software that you think meets all your requirements, it’s time to shift gears and migrate your company’s database to the new system. This is one of the most essential parts of the project and is an early indicator of your software’s effectiveness.

 

However, before you actually start migrating your old data, you may need to cleanse it to suit the new requirements. Generally, this is a task that data analysts are rather familiar with. Hence, they should be the lead, with other members of the team helping them wherever required.

 

▲ SBack to “Steps to Successful ERP Implementation”

 

User Training

Once the data has been successfully migrated, it’s time to introduce the star spangling new ERP software to your workforce, who are its user base. However, software like ERP spawns across almost every department and hence has far-reaching consequences if a user fails to understand how to operate it.

ERP Implementation - User Training - Orderhive

Training your user base for the new regime is instrumental in how successful the project eventually turns out to be. The better your training modules are, the quicker your workforce gets accustomed to the software and adopts it.

 

Different companies try different approaches for undertaking massive user training programs for their ERP systems. You can:

 

#1 Carry out offline, team-based training where every team is given a hands-on experience to get to understand and play around with the system.

 

#2 Carry out e-learning training modules where each team can understand the software through a series of video tutorials.

 

#3 Gamify the process by offering small rewards to the employees on their journey of trying out your ERP system by identifying the users who are more proactive at providing constructive feedback. Create a sense of purpose among the workforce so that they prioritize the training modules along with their day to day activities.

 

▲ Back to “Steps to Successful ERP Implementation”

 

Testing and Roll-out

Rolling out an ERP software is one of the most thrilling and nerve-wracking experiences to go through, especially for the team tasked with creating the mammoth software. A defining step in the ERP implementation process, it has the capacity to make or break the entire operation.

 

Planning a roll-out to the T is extremely important. You need to account for the delays caused due to a variety of factors, and not let them get to you. Trust in the software that you’ve built with your sweat and blood over the last few months, and resolve every hiccup that comes along the way.

 

Before the final roll-out, you should identify a few members from each department or ask people to sign up for a beta testing program. This will help you crease out any defects that are seen before the launch.

 

Once the beta tests are completed and the management gives a go-ahead for the Go-live, huddle up the teams and inform them about the transition.

There are multiple options to choose from, for the launch of your ERP systems. You can either choose the big bang method and roll it all out at once, or you can adopt a phased approach and roll the ERP software out in phases. Companies are increasingly following the latter as it gives them sufficient buffer between each phase and doesn’t make the process overwhelmingly chaotic.

 

▲ Back to “Steps to Successful ERP Implementation”

 

Evaluation

Once the company starts to function on the new regime, it’s time for some serious number crunching, and asking the questions that matter. Here are some metrics against which you can judge the effectiveness of the project:

 

  • A decline in Human Error
  • Visible ROI
  • Increased Productivity levels across the organization
  • Increased customer satisfaction

 

If the results are positive, you can count the entire exercise a success. However, not all is lost if you don’t get the desired results for some of these questions just as yet. Remember, a good ERP system is the one that always leaves some room for improvement.

 

▲ Back to “Steps to Successful ERP Implementation”

 

Support

So you’ve successfully implemented your ERP system across your organization, and it has passed with flying colors against all the metrics set by the management. But that isn’t the end of a successful ERP implementation process. One final and yet key leg of the process still remains post-implementation support.

 

Any organization that seeks to introduce an ERP software solution to their task force, should be vigilant during the course of the entire process, not to stray away from the predefined path. To avoid this, the goals should be well defined right at the beginning of the project.

 

Every ERP implementation project is an enormous activity as a whole. But if broken down into steps, and each step carefully planned and implemented, it can be turned into a shining success.

 

▲ Back to “Steps to Successful ERP Implementation”

 

4. ERP for Small Businesses

You have likely started your small business with one key motivation in mind: to be your own boss. But, running your own business comes with almost as many perks as its own set of challenges. 

 

One of the said challenges, most commonly observed, are technology-related issues. Under the umbrella of “technology issues” there usually are a myriad of concerns that can be summed up as two main problems:

 

  • Your business software is either completely inadequate or no longer comprehensively supports your business.

 

  • You have a mixture of idiosyncratic softwares that are disconnected and do not talk to each other.

 

These are troubling issues because of a lack of the right resources can very well mean the difference between survival and disbandment for a small enterprise. And this quest for the right tools is what typically sets small businesses on the path that eventually leads them to Enterprise Resource Planning (ERP) software. 

 

Although this technology is crucial for growth, making such a huge investment is no easy task for any business leader. Many young businesses claim they are far too small for ERP software or that the software itself is too big an investment for their needs. This misconception stems from the mindset that the number of users drives the need for an ERP solution. But the truth is, ERP softwares are now surprisingly more accessible, customizable, and cost-effective for small businesses than you think. Irrespective of the industry or the size of the business, there shall be a software best suited for your needs, and its ability to be upscaled using additional modules makes it all the more desirable.

 

Below are some specific motivations for employing ERP in small businesses.

 

  • Most successful Small and Medium-scale Businesses (SMBs) today are not content to continue as either small or medium-sized forever. ERP systems can help them reach their goals by creating sustainable, innovative growth. In current times, no business is too small for an ERP solution, and it allows small businesses to act and operate like an enterprise-scale business.

 

  • As small organizations pass through this transitional phase, they should be able to upscale and be ready to alter their core business capabilities to generate increased revenue opportunities. And an Enterprise Resource Planning software facilitates the flexibility needed to make this shift.

 

Let us now understand the specifics of this software.

ERP System - The Past

ERP System - History - Orderhive

 

In 1983, a predecessor to today’s ERP softwares, named MRPII, was introduced to the Manufacturing industry. MRPII’s main focus was inventory management, but several additions were made to its underlying structure, which allowed for the incorporation of internal data. MRPII not only improved efficiency by decreasing waste but also provided some basic analytical functions. Companies operating in other verticals soon began to recognize the value of such analytics, thus enabling MRPII to evolve beyond its roots and prove useful for a variety of different business categories. 

 

Current ERP systems still retain this technology’s bedrock (i.e. resource management across multiple departments within a single organization), But the range of its practical applications exploded. By empowering organizations to optimize the entirety of their production chain from suppliers to clients, ERP softwares have changed how multiple industries do business.

 

A simple example of how ERP has changed this industry can be found by calling the customer care representative of any major retail industry (take Amazon, for instance). This representative can pull out all the information about your order within a few seconds. He/she can check whether your desired product is in stock, details of your order, check to the bill, and payment details from a single system. It is also possible for them to track your order and provide you with an expected delivery date based on the real-time shipping information within a few seconds. None of this insight would have been possible without an ERP software managing all this information in the background.

 

Although ERP is accounting and operations-oriented, it offers several modules such as inventory management, project management, supply chain management, human resources, and more. It also provides data management with fewer human error opportunities because information flows from one department to the next in real-time. All the aforementioned are done within a single interactive database management system with built-in analytics and a dashboard. 

 

An ERP software helps you better plan your resources, reduce your production costs, increase your productivity, reduce mistakes, and creates a level of internal transparency that empowers the entire organization. According to one study, real-time data can help reduce an organization’s operational expenses by as much as 23%. However, until recently, the benefits of ERP innovation weren’t available to everyone.

 

▲ Back to “ERP for Small Businesses”

 

ERP System - Winds of Change

ERP - Winds of Change - Orderhive

 

Initially, the implementation of ERP systems was limited only to large organizations. The backbone of the software was covering only the most needed bases and lacked the necessary customizability. Organizations had to rework significant elements of their internal processes just to accommodate a new ERP system. Small businesses simply lacked the necessary funds or the technical support needed to raise the required infrastructure for the adoption of traditional enterprise-scale ERP solutions.

 

Gradually, ERP softwares started providing cooperative, cross-platform convenience, which resulted in a few SMBs considered utilizing an ERP suite. But now, new modes of ERP implementation have opened the floodgates, empowering businesses of all sizes with the same kind of top-tier resource management as the larger corporates.

 

As a small business, your priorities are unlikely to be the same as that of a larger business, and your ERP software should reflect that. Understanding this gap, a ton of ERP systems became available on the market catering, especially to the SMBs providing different benefits for small businesses, different functions, and different licenses. Some are stored on the cloud, while others can be hosted on your network. Several leading ERP providers are Microsoft Dynamics NAV, Microsoft Dynamics 365, SAP ERP, Oracle. Such ERPs for small business can be implemented across various shops and sectors such as grocery shops, supermall, boutique shops, restaurants, and food industry, trading, retail, agricultural, farming, and livestock management.

 

▲ Back to “ERP for Small Businesses”

 

ERP for Small Businesses - Benefits

Alright, ERP is a magic wand, but how does it benefit me?

 

ERP system is a collection of tools that will empower your small business to manage its resources more efficiently and to go from production to inventory without any interruption. As an SMB, it’s the kind of tool that can make the difference between developing a business beyond your expectations or staying in the same place. ERP software can also help your small business use its resources in a better way with project and budget planning.

 

 

Transparency

 

Rather than each department having its own information system like in the earlier days, an ERP allows for advanced user management and access control. This ensures access and shareability of data of any department to all the departments. Automating the data flow removes the need for re-entering the data manually, resulting in fewer human errors or miscommunication and increased data accuracy.

 

 

Cost reduction

 

Effective implementation of ERP will lead to a reduction in administrative costs. As a virtue of increased transparency, your employees will endure fewer redundant tasks weighing them down and adjust their attention to managing enlarged volumes of business. This will result in a reduction in turnaround time and a rise in production capability. This also aids in smoother business growth and transforming various other features of your business.

 

 

Decision-making

 

One of the key benefits of an ERP system is that it can provide you with real-time information(data). With all the data in real-time and consolidated into a single system, the management’s decision making process becomes a rather well informed and effective task. This can be a game-changer for marketing and an extremely useful tool for accounting and management. Manufacturing industries can detect a potential obstacle or bottleneck in real-time. Such data can help predict a similar future event and co-ordinate a shutdown time such that maintenance of all the necessary machines can be carried out at a decided time. 

 

The ability of ERP systems to generate custom reports, on schedule or on-the-fly, is a powerful tool for monitoring your business’s progress. Like Large corporations, this software empowers your business to track KPIs across the entire organization and if any department or overall functionality were to fall behind, you’ll see evidence in the numbers. Providing an overall picture of operations allows business leaders to respond quickly to a changing business environment and make effective decisions leading to a profitable and sustainable upscaling of their company.

 

 

Streamlined Data Flow

 

Swapping to ERP software, your company can now enjoy streamlined data flow. Streamlined data flow is especially handy for fast-growing businesses where the discrimination of data seriously hampers productivity. For example, in the manufacturing industry, production can be halted or delayed if the inventory department doesn’t get daily data updates from the production department. Poor communication and lack of collaboration often lead to employees being denied access to data when they need it. An ERP software mitigates this issue by consolidating all official data in one place, which can be accessed by any department at all times. This also enables the workers to be able to see the “big picture” within your company. You’re also mitigating expenses by streamlining data into a single software application instead of various individual software and management systems that you were previously paying for in each department.

 

▲ Back to “ERP for Small Businesses”

 

ERP for Small Businesses - Implementation

The Leap of Faith

 

Okay, so we understood that ERP is a powerful tool that is quite beneficial to our business; but for a small business, an ERP package is still a major expense. How do we know that we aren’t rushing into it? At what stage would its possible returns justify the costs? In this section, let us ascertain whether our business is ready for the leap of faith or not?

 

In a startup or a small business, employees don multiple hats, pitching in wherever and whenever the need arises. They don’t have the time to process multiple spreadsheets and separate mountains of data manually. 

If your company is losing track of its products. Or if sales estimates are based mostly on guesswork. If the company struggles to keep up with an upsurge of orders and relies heavily on Excel spreadsheets, getting solid facts becomes problematic. If your company is facing any such issue, then it is surely the time for your small business to implement an ERP system.

 

 

But how does one implement ERP for a small business?

Ideally, an ERP software should allow for synchronous workflow from inquiry to invoice and payment since it is integrated over all departments of a company. The software’s implementation should enable it to handle all the processes in one fluid system:

 

Contact with Client (CRM) → Order Processing (Supply and Inventory Management) → Invoicing and Payment (Finances and Accounting)

 

A vast majority of small businesses start with just the basic tools such as a combination of simple accounting software and document-based processes (Excel spreadsheets, organization-wide cloud-synced Google docs, etc.). But, as the business expands and transactions increase, it may become more time-consuming and difficult to process a larger volume of data. You can find everything under the same interface, with real-time communicative data. Depending on the ERP you select, you will be able to add a Customer Relationship Management (CRM) module or generate reports produced by your business intelligence plugins. It will also support your customer service with CRM, help you better control the warehouse process, and even support you in production by optimizing your manufacturing capacities. All this is without counting the accounting tools that an ERP offers to support your financial tasks. Plus, your accounting will communicate with your project planning and other relevant plugins.

 

But In fact, ERP is an extensively customizable and complex piece of software. Choosing the wrong one or the improper implementation of the software could yield losses to your company or directly impact your team’s enthusiasm to adopt it. 

 

However, there is a process in place and industry experts ready to help you. Implementing an ERP system requires careful planning in order to minimize the risk of failure and to ensure that the desired goals are met. Your business must have an established ERP strategy even before selecting any particular system. It would be best if you also had a standardized implementation blueprint and the willing involvement of all associated businesses, staff members, and IT consultants.

 

To live through this process stress-free, it is a good idea to be supported by an ERP software implementation expert throughout the process, from the choice of ERP software to the evolution of it in your small business. Carefully choose an ERP reseller because the said reseller will also function as your advisor and as a resource for many years to come.

 

▲ Back to “ERP for Small Businesses”

 

ERP for Small Businesses - Costs Involved

Alright, but how much would it cost me?

 

As a business owner, fewer questions are as pertinent as this one, especially if your business is small and the expense is as big as a paradigm shift. ERP software for small businesses is indeed relatively less expensive, but it can still eat up a significant chunk of the company’s budget. That being said, a business owner needs to see an ERP package as an investment that will help reduce operation and administrative costs and improve your business’s productivity. These benefits truly are worth the shift.

 

Undoubtedly, ERP is a good investment, but it will require months of work in collaboration with your ERP reseller and advisor to yield any quantifiable results. Working with a trusted ERP system advisor will help your small business create a personalized system. Your return on investment shall be rather quick and profitable in terms of productivity and lower production cost. 

 

Owing to a plethora of choices(cloud or network), functions, licenses, users available on the market, it is now possible for almost every small business to find an ERP software that is best suited to their needs and budget. Although smaller companies’ budgets are significantly lower than that of the Fortune 500, it doesn’t translate to smaller companies and startups losing out on the functionality of softwares used by the larger corporations. Startups plainly, do not require the same number of applications and plugins that a larger organization would. The pricing of an ERP software can depend on a few different factors, including:

 

  • Number of users
  • Software footprint – the modules implemented
  • Hosting
  • Integrations

 

▲ Back to “ERP for Small Businesses”

 

How do I choose the right ERP system for my small business?

ERP System for Small Business - Orderhive

 

As a small business, choosing the right ERP system is a factor that can make or break its implementation in your small business. It’s like getting a suit tailored by a master craftsman. A business owner must have an in-depth understanding of the needs of his/her business, its goals, its possible scalability, and the unknowns waiting to happen. A small business must prioritize their critical needs and correspondingly optimize this tool through development, functions, and integration to fully maximize the benefits of employing an ERP system while still making it cost-effective and manageable.

 

In the market of ERPs, there is no such thing as a one size fit all. ERP sellers offer a massive range of solutions because they understand that every business has different competitive profiles, customer mixes, and business standards. A good ERP option will provide you with a suite of business management tools such as CRM, web hosting, eCommerce platform, a tasking system, a shipping manager, email marketing, etc. However, keep in mind that too many unnecessary bells and whistles may cut back revenue.

 

According to SAP India, companies need only answer the following five simple questions to pick the right ERP. 

 

  1. What industry do you best identify with?
  2. Deployment Options?
  3. How complex is your business?
  4. What is your employee size?
  5. And lastly, what is your expected employee growth?

 

 

One of the easiest and most efficient ways to answer these questions is to sit down with your team and evaluate your processes, needs, limitations, and even the personality of your organization. These meetings will help you better understand what you need from your new ERP system. Who knows, it may even shed new light on the enterprise!

 

SMBs should consider the following bases while choosing an ERP solution.

 

 

Ease of Use

Do keep the following questions in mind during the selection process, Is the software user-friendly? Consider the learning curve involved from the perspective of an employee. What amount of training hours would be needed? 

 

Modern ERP solutions come equipped with responsive user interfaces, and they easily integrate with existing business tools such as Microsoft programs and Google.

 

 

Customization

While most sophisticated enterprise-scale softwares are too bulky and expensive for an SMB, the free, basic freemium packages will be too inadequate to scale up as your business grows. It is important that If your organization were to branch out or acquire new entities, the software suite must be robust enough to easily incorporate them and accommodate the upscaling by providing features that best align with your business objectives.

 

While customization is desirable, do bear in mind that highly customized systems will generate a higher cost. Consider the utilization of the software and the platform to be used on and the user count before you start customization.

 

 

Cloud or On-premise Platform

Traditionally, on-premise systems require large initial investments and expensive licensing costs, but with the emergence of cloud ERP solutions, it is now affordable for smaller businesses and startups to make use of ERP systems too. 

 

It might be a non-negotiable requirement for some companies to have the system be in-house and installed on an internal server, but a web-based solution is more mobile and can be accessed through tablets and mobile devices.

 

 

Support service and associated charges

Consider the time duration over which the seller guarantees support and inquire about additional fees regarding troubleshooting your system. Ensure that your ERP seller guarantees support for mandatory upgrades and that the enhancement fee is locked in, meaning their prices don’t go up with future developments and releases.

 

Ease of upgradation should also be an important point of consideration; typically, a cloud-based platform provides faster and automatic updates than an on-premise system. It may also involve less work implementing it compared to the on-premise one.

 

 

Security Measures

Your data’s security should be as much of a priority to the seller as it is to you. Understand the fine print of managing and determining different access and authorization roles in the system to prevent data violations before committing to any solution. Ensure that passwords are strong and adequately encrypted. Also, figure out the security measures in place for the integration of third-party products.

 

 

Total Cost of Ownership

As an SMB, your goal here must be to maximize your ROI. Do not fall prey to sales and marketing reps trying to downplay the costs and risks involved. Be absolutely clear about the following costs:

 

  • the software itself
  • the hardware involved
  • its implementation
  • associated periodic maintenance
  • Customization
  • training involved
  • support offered 
  • updates that will entail. 

 

Also, take into account pre and post-implementation expenses.

 

Once you understand what you are after, what your business processes are, and the needs of your business for its projected growth, you can ask more targeted questions about the ERP software you want.

 

 

As highlighted above, there are several ways of implementing ERP software perfectly tailored for your small business. Now smaller businesses have access to and can make use of the same tools as the larger organizations do. Once the business owner has understood the benefits of employing this system, he/she shouldn’t delay its implementation. Although a significant amount of time, money, and effort would be invested in this process, this should be seen as an investment to maximize the growth of the company, because the cost-saving and increased productivity yielded by this software far outweigh the initial cost.

 

▲ Back to “ERP for Small Businesses”

 

5. ERP vs CRM

 

Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) are similar to each other in more ways than one. Still, both of them facilitate the same end goal – to increase the overall profitability of a business by increasing the efficiency, degree of automation, and streamlining business processes. These systems do overlap in some functional regions, and at times can be integrated entirely, but their core functionalities are completely different. The scope and methodology used by these programs to attain the aforementioned goals are also highly different. Hence seeing them as separate, stand-alone systems makes it easier for businesses to understand how ERP and CRM each play an individual role in improving efficiency and increasing sales.

 

The conceptualization of CRM dates as far back as the 1970s, but the technology of that time-restricted the then enterprises to rely on independent mainframe systems to automate sales and eventually categorize customers manually into spreadsheets. Miniaturization of computing and networking technologies coupled with widespread access to the internet led to a massive upsurge in the research and development of software used to manage and control the company’s daily operations. The two systems, ERP and CRM, separated from this singular entity, particularly during the mid-90s. This separation was directly a result of companies prioritizing their investments towards tailor-made softwares suited to their specific needs.

What is CRM?

 

Customer Relationship Management, in its simplest form, is a combination of strategies and practices utilized for managing and analyzing a company’s interactions with its current and potential customers. This article refers to CRM as software from a technological and business’ perspective but does not delve into its underlying marketing principles. CRM systems are designed to record every piece of information regarding customer interactions, standardize that data, and make it easily shareable throughout the organization. This helps to organize, automate, and synchronize the tasks of sales, marketing, and customer service departments all through one easily accessible system. 

 

CRM helps with the process of identifying potential leads/prospects, nurturing them,  guiding them further down the sales funnel, and encourages repeated business from the same customer – either with recurring orders or higher value orders. Apart from providing an overview of the customer behavior patterns and their activities, CRM has gradually evolved to include all areas of the customer experience, keeping the customer happy and, in-turn increasing the customer retention rate. This adds value to your brand, enhances customer relations, and brings in recurring sales from a single customer. Moreover, CRM systems can create sales projections, manage invoices and communication, and offer more accuracy with customer data.

 

This process can be illustrated as follows,  say your sales rep, after finishing a call with the prospective client, enters new information in the CRM software such as the client’s contact details and notes about the conversation. 

Then, marketing personnel can make use of that information to tailor a personalized newsletter. And all the required information for the task can be accessed by simply pulling-up that record in the CRM system. With the right systems and strategy in place, businesses can organize and segment almost every aspect of the customer experience.

 

CRM is typically used for executing the following tasks:

 

  • Automate and manage marketing campaigns
  • Analyze purchasing patterns
  • Offer high-quality customer support
  • Automate redundant tasks
  • Identify new leads
  • Evaluate the performance of sales rep
  • Streamline the sales process

ERP and CRM - Similarities

 

Both ERP and CRM pay attention to different objects, whether customer interactions, business transactions, or procurement. Still, both of these systems deal with the data flow, and both of these solutions offer an important business tool – central repositories for customer data. Fundamentals of the new-age commercial activities rely heavily upon information and utilization of that data for versatile operations.

 

Just like ERPs, CRM can also be delivered either through an on-premises model or through a cloud-based software where the vendor manages the software in its own data center, and customers access it through the cloud.

 

Between the two, cloud-based CRM systems were quicker to be adopted because they proved to be more straightforward to build. But in ERP’s case, businesses were initially wary of putting financial data in the cloud, thus explaining their slow adoption rate.

ERP and CRM - Differences

 

ERP and CRM systems although have the same ultimate goal of increasing the business’ profitability, their methods of achieving this goal are what separates the two. While a CRM is mainly used by sales and marketing departments, ERP software is integrated enterprise-wide and implemented across multiple departments. 

 

ERP systems focus on reducing overheads and cutting costs by making business processes more streamlined and efficient, thus reducing the number of resources invested in these processes. Whereas CRM works to facilitate an increase in company profits by producing greater sales volume. CRM also makes it easier for marketing personnel and salesmen to send out targeted marketing campaigns and offers to improve customer relationships and increase their customer’s brand loyalty. 

 

Since a large part of the two systems’ functionality overlaps each other, in most cases, a robust ERP system typically contains much of the basic functionality of a CRM system, but not vice versa. But before an organization can cut costs, they must make enough profits. Moreover, a company can be extremely organized yet not make enough in sales or have a consistent income stream to fund its business processes. 

 

Hence, a standalone CRM system’s ability to upscale the company’s sales and profit must not be underestimated. While smaller enterprises can make do with an ERP, CRM integrated cloud-based solution, the same is not adequate for larger companies. These companies require complex, robust, stand-alone ERP and CRM systems to allow the exchange of data between these two solutions to occur in real-time. This is particularly important for managing supply chains and product shipments. Regardless of the business’ size, deploying a CRM or an ERP system is significantly better than searching for customer data through email chains, handwritten notes, and text messages.

 

 

The actual purposes served, and the methodologies used by these two systems may vary, but both these systems are great tools for optimizing revenue. Choosing the best solution or combination of solutions for your business depends on the scope of your needs and the amount of investment that you’re willing to make.

6. ERP Execution: Failures and Disadvantages

It comes as no surprise that deciding the correct course of action for your business is always a tough call. Especially, when you have to decide upon software that can manage your operations and increase your efficiency. Enterprise Resource Planning, broadly known as ERP, is famous for its ups and downs. It has turned out to be a blessing for many companies; it is also renowned for ruining business operations. One such scary feature of ERP is that it is known to initially disrupt and reorganize the entire company operations and rebuild itself from scratch. Till then, losses and failures are bound to happen due to the disruption of the entire process.

 

The assumption is the thicker the report the greater the “due diligence.” This may actually be measuring waste, not actionable information.” ERP Information at the Speed of Reality: ERP Lessons Learned, Wayne L. Staley.

 

Yes, it is true that ERP implementation has several benefits. But today, we are specifically going to focus on the biggest ERP failures and disadvantages of ERP. It is important to always see both sides of the coin. Industries and technology will always show you the brighter side of the picture, but it is our responsibility to educate you on the negative sides as well. 

 

You’d have a hard time finding anyone who will talk about it — cases either litigate forever or get settled and sealed,” says Greg Crouse, managing director at Navigant Consulting

Biggest Failures of ERP Execution

 

Hewlett-Packard

 

Hewlett-Packard’s ERP failure is still freshly remembered when spoken of ERP’s biggest failures. HP underwent this phased way back in 2004 but its failure story still sends a lesson throughout countries. HP had decided to implement the ERP process throughout their offices and imagined a seamless transition. But things went utterly awry when the teams could not blend in or rapidly correspond with the system and also, it was shocking to learn that the software lost the company data while in process. This non-adjustment and lost data cost the company millions of dollars! Precisely, $160 Million!

 

 

 

Revlon

Revlon acquired quite a few companies, one of which was Elizabeth Arden Inc. both of the companies had previously received positive results through ERP implementation. In the same year, Revlon also acquired the Cutex brand. Thus, to streamline operations and have seen SAP ERP’s positive impact in the past, they opted for the same. Unfortunately, things didn’t go as planned. Revlon later mentioned that the implementation of ERP was a disaster! Their stakeholders were certainly not happy and showed their concerns by suing Revlon.

 

Christopher Peterson told the investors,

In early February [2018], we rolled out SAP for a large part of our North American business to integrate planning, sourcing, manufacturing, distribution, and finance… However, we experienced issues during the SAP changeover that caused the plant to ramp up capacity slower than anticipated.

 

 

 

Target

 

Target Canada was confident that they would be able to implement ERP successfully. They were certain that they would not face ERP failures. The reason being: They were launching in 2013, so there was no question of converting any previous data but only feeding the new information. But, as soon they rolled out their system, their supply chain came down crashing. The inventory was incorrectly recorded as the entries were manually recorded by the employees. According to a later conducted investigation, only 30% of the information fed in the system was correctly recorded.

 

 

 

Nike

 

Another big name in the list of ERP failures. Nike made plans to integrate ERP for all of its business operations. Certainly, the year 2000 didn’t go well for them! It led to a disaster and a significant drop in sales figures. The company nearly lost $100 million in sales and spent its year filing a number of lawsuits. 

 

There are yet many world-class companies that faced setbacks due to the failures of ERP implementation. Some of them are Hershey’s, PG&E, Vodafone, and many others.

Disadvantages of Enterprise Resource Planning (ERP)

 

One can only learn from mistakes. Well, it surely does not have to be your own mistake. You can learn from others’ mistakes as well.

 

 

 

High Prices

 

While investing in software, the first thing that comes to mind is the cost. Is the value of the software high or low? It is especially important for small to medium businesses. ERP is a licensed product, and just by investing in a single license, you end up spending thousands of dollars. Usually, it is a 5-digit figure. So why to invest in such high priced software when you are uncertain of its benefits. Moreover, there are overhead expenses as well, such as maintenance costs and add-ins.

 

 

 

Training Cost

 

Enterprise Resource Planning (ERP) requires continuous involvement. It needs a lot of training. You need to train your employees to get acquainted with all its features. Also, you need to keep your IT team updated and trained as well, so they know the ongoing process. To make things complicated, the training needs to be executed during the business operations to get a proper hang of the software’s technicality. Thus, there are chances the activities will get delayed or disrupted time and again.

 

 

 

High Level of Complexity

 

Enterprise Resource Planning (ERP) is complex software. The first and foremost step of ERP is to convert the company data to its software. Proper supervision, strong strategy, and in-depth planning is a must! This way, the data conversion may go smoothly. Moreover, you need to ensure that the data is appropriately analyzed, study, and examine the source of the data, and then only you can move forward. Remember, converting incorrect data into the software or delaying the conversion process can cost tons of money. You can refer to the Hewlett-Packard case study mentioned above, which lost millions of dollars due to lost data.

 

According to a report, a minimum of 29% of ERP implementations has failed to achieve the business objectives or even reached half of their initially planned business goals. 

 

 

 

Find the Necessity

 

Many companies believe that since their current business software is not yielding results, there has to be a software problem. Thus, they find the need to switch to a new one. Most of the cases of failed ERP implementations are due to the unnecessary involvement of new software. Find your problem. Do not believe that new software will solve the problem. And if you still think that, try improving your current software. Chances are the issues will be rectified, and it also falls way cheaper than investing in new software altogether. 

 

 

 

ERP Customization

 

You may always get tempted to customize your ERP software to gain higher results. But beware of these false myths. Customization can easily be misleading. It isn’t easy to upgrade, requires a lot of time and energy, invests a huge sum of money, and puts in many resources. And it may come as a surprise, but most of the ERP customizations end up being incomplete. One major reason is the exceeding amount of time and money put into it. Thus, the results are definitely not upto the expectations.

 

 

 

Cost of Maintenance and Implementation

 

The successful implementation of an ERP process may mean investing in new machines and hardware that can easily sustain the ERP application. It includes news servers, computers, and mobile devices. Moreover, the implementation costs consist of a team of highly trained specialists, a supportive and prior knowledge IT team, consultants, and many more. Just like any software or hardware to function error-free, it needs to be periodically maintained and serviced. Thus, annual or periodic maintenance fees are also included in ERP maintenance costs. Therefore, ERP maintenance and implementation costs can go almost four times higher or the same value as the actual software price.

 

 

It is always a smart choice to thoroughly read and understand the pros and cons of any investment. Understanding the disadvantages and failures is always beneficial to your growth. Many companies may show you the brighter side of the product but always insist on knowing the negative sides as well. Then, weigh the pros and cons with scrutiny, and without a doubt, you will learn better. ERP is a big name with a big investment cost. But it certainly attracts bigger failures and disadvantages. Focus on them. Let us not hurry to invest in an ERP system. It surely does have more disadvantages than advantages. Or, you can also invest in inventory management software to solve your purchasing problems. They are really helpful with inventory, orders, payments, invoices, and any such matter.

7. ERP Best Practices

Be very meticulous about if you are implementing ERP for good

The major fault that an enterprise can do is to implement an ERP system without understanding the fact that ERPs are implemented to enhance a slow but good system. Putting an ERP system to run a flawed process will only make the process function more efficiently to be bad. Therefore, ensure that you rectify all the flaws in your operations like inventory management, warehouse management, order management, etc., before you automate them.

▲ Back to “ERP Best Practices”

 

Follow ERP data conversion best practices

Data migration is the key process to gauge the success or failure of ERP implementation to ensure that the transferred data is relevant, accurate, unique without duplication, and not redundant. , so one of the best practices for ERP to follow is to follow the ERP data conversion best practices meticulously.

▲ Back to “ERP Best Practices”

 

Take inputs and empower all the departments to take decisions

Including the employees from the departments that will be using the systems every day is essential. The IT guys and the employees who will be affected or having a hand in the operation of the process from the warehouses, inventory, finance, etc., should be involved in the decision-making and required things.

▲ Back to “ERP Best Practices”

 

Smart budgeting is must

There have been instances where a major ERP implementation has gone wrong because of the failure to understand the financial requirements. Underestimating or overestimating the budget requirements leads to misunderstandings and hampers the money flow. 

 

You need to be ready with the required sum so that you don’t have to stop the implementation in between if the budget goes out of hand.

▲ Back to “ERP Best Practices”

 

Be very sure about what you want and cloud-based ERP vs. On-premises

An on-premise system requires a dedicated IT staff that is supposed to maintain and look out for any system issues. The team can operate ERP systems only from the inside of a company. Simultaneously, other SAAS Cloud-based inventory and operations management softwares are more flexible and can be used anywhere. These software allow you to provide a certain amount of access to the process to all department stakeholders. 

 

So you need to decide which type of ERP you want based on your requirements and then move forward.

▲ Back to “ERP Best Practices”

 

Decision making should be industry specific

Don’t go overboard while selecting ERP as a solution just because it worked for someone in the market that doesn’t mean it will work for you as well. You need to keep your industry requirements before deciding on investing a large sum in ERPs. Instead, if your industry is such that it can be managed by other softwares that costs much less but is best for you, then you can opt for such inventory, warehouse, and operations management softwares.

▲ Back to “ERP Best Practices”

 

Deciding on KPIs to track the implementation of ERP

KPIs help you to be on top of the implementation process and also after the implementation has been done. The established KPIs can also help you combat any mismanagement or errors on an immediate basis.

▲ Back to “ERP Best Practices”

 

Give implementation some time

Take time. It’s not something that you can implement just like that. ERPs are complex and take time. You need to sit with all the stakeholders and then decide what you need to do. While implementing the ERP, make sure that you don’t just try and do it all at once; go stepwise and plan thoroughly.

▲ Back to “ERP Best Practices”

 

Training the people to adjust with the change

The transformation is big, the entire business process will change after the implementation of ERP, and you need to manage the change for people who are going to be involved in this.

 

SaaS-based softwares are very easy to manage in these cases due to their flexibility and the options they offer during and after implementation.

▲ Back to “ERP Best Practices”

 

Invest in implementation team

Don’t just invest in an efficient ERP system but also invest in a high-quality ERP implementation team because it’s the skilled labor that will get the best out of your invested money in the ERP system. Hire a team with good decision-making capability, considers all the stakeholders before making any decision, and is efficient. This way, you drastically reduce the chances of ERP implementation failure.

▲ Back to “ERP Best Practices”

 

8. Top Functional Areas of ERP

With the evolution of new technologies and trends, companies are adopting more advanced strategies for running their business flawlessly. Organizations implement the ERP system for many reasons, like streamlining the whole process, including its functional areas, methods, and procedures. Different companies run different operations like human resources, manufacturing, inventory control, and financial management using ERP systems.

Some top functional areas of ERP

Boost your business software intelligence

 

ERP systems involve different innovative features like IoT (Internet of Things) and AI (Artificial Intelligence). The involvement of these current technologies and ERP systems will provide in-depth and smooth handling of different business processes to boost software intelligence power. Also, it will offer different ways of streamlining workflows, forecasting abilities, and keeping records.

 

 

Marketing and Sales

ERP’s role in managing sales and marketing starts right from designing modules for providing full support to all the sales order processing systems, managing contacts, controlling day-to-day activities like prospecting, and more. Through the ERP system, all the employees can contact customers and do a timely follow-up on the invoices while also track the orders. So the sales and marketing personnel can monitor the other goals that can get collected and get analyzed by the managers and all the business partners.

 

 

CRM (Customer Relationship Management)

Source: https://www.softwareadvice.com/resources/erp-vs-crm/

 

 

Enterprise resource planning platforms include customer relationship management modules that focus on how well any business communicates with its customers. This covers different departments like call center support, sales and marketing, and functions like customer interaction data, prioritizing lead, customer retention, and sales pipeline management.

 

 

 

Order Processing

 

The order processing module in the ERP system is designed to assist the organization and manage all credit checking, sales analysis, order entry, and sales reporting. Most of the customer interface modules can get integrated into the company’s website and diverse modules with the IoT capability. ERP systems will always help the organization retain the current customers and for expanding the business. ERP will help different companies introducing automation at every level and customer service, sales and order, finance, supply chain, and fulfillment.

 

 

Accounting and Finance

Accounting and finance can automate and streamline all the tasks related to the budget, cash, cost management, and activities based on costing and different accounting functions. The ERP systems offer real-time data and insights of the businesses based on the performance that ensures compliance with the financial regulations.

 

 

Human Resource Management

Enterprise resource planning solutions help automate all the human resource-related tasks and help get them done while managing with the limited staff. ERP system comes in handy to the human resource staff to send interview emails to all the candidates and maintain the employees’ attendance records without much effort. The custom ERP solution will take the overall load off HR’s shoulders and help them gain maximum output with fewer errors.

 

 

Inventory Management

Source: https://www.xcrino.com/ERP_inventory_management.php

 

Enterprise resource planning helps different businesses to make better and improved decisions by offering them the exact inventory data. With the essence of ERP inventory management systems, you can control your organizations’ operations like finance, logistics, and your business’s inventory using a single system that reduces error possibilities and enhances overall efficiency. More and more companies are adopting ERP systems for improving their business inventory capabilities. ERP inventory management’s significant features cover planning replenishment orders, inventory tracking turnover, surplus inventory management, business savings, etc.

 

 

Distribution

Distribution companies face different challenges in managing their inventories, logistics, supply chain activities for shifting demand, other variables, and costs. ERP software can overtake the legacy systems that are not holding up in the interconnected and fast-paced market. It opts for the customer, equipment data, and supplier and offers full visibility in all the trends and processes.

 

 

Centralized modules & ERP Database

Centralized modules permit all users to handle different groups without switching the screens and applications. All the necessary information required for various operations is housed in a unified ERP database system. ERP systems depend on the central database through which all of the apps will retrieve information. This will ensure that all the users have a single source of truth and that all the departments and all of the teams work together and use the same information set.

 

 

Integration

Enterprise resource planning apps are integrated entirely and work together seamlessly. This means users will be able to go from one part of the system to the other without being lost or just like it is a different application. That means the app shares all of the information without any problem, and that too in real-time.

9. ERP Systems- A Brief History

As we know it today, Enterprise Resource Planning (ERP) software is a comprehensive tool that aims to integrate several aspects of an enterprise. The system makes sure that the flow of information across the organization is seamless, real-time, and accurate.

 

An ERP system, when implemented to perfection, helps an organization remove silos between departments like manufacturing, operations, marketing, sales, accounts, etc. It gives a truly holistic view of all day to day operations going on within the company and provides coordination between various functionalities like inventory management, warehouse management, shipping management, etc.  

 

The need for ERP arose first when smart entrepreneurs and analysts started noticing that as the company sizes grew, the inter-departmental communication only got messier. As a result, the information generated and gathered by one department often didn’t make it to the other one in time, which resulted in delays and inefficiencies. This is what is generally referred to as ‘islands of information’ by the pundits. These islands needed a way to be connected in order to end this unwanted segregation of information.

ERP Systems- A Timeline

Although the term “ERP” got coined much later in the 1990s, the conceptualization of software that could integrate the information flow had begun way back in the 1960s after the rising tide of the third industrial revolution lifted many a boat. With the advent of semiconductors and the modern-day computer with a mouse and a GUI, many organizations started using advanced software to plan their material requirements. This gave birth to the first Material Requirements Planning (MRP) systems.

 

MRP systems were initially developed internally within the organizations to create better coordination between various arms of the company like manufacturing, resource purchasing, inventory management, and delivery. These were quite simplistic by today’s standard and only performed some of the most basic functions. However, they were the first step in creating the sophisticated ERP systems that we have today.

MRP

In collaboration with a construction machinery company called J.I. Case, IBM was the first software company to create a Material Requirements Planning (MRP) system. The software was mainly used to process the numbers related to procuring materials and automate the process of procurement and other operations.

 

J.I. Case quickly realized that by implementing MRP, they were able to establish a great amount of coordination between various activities such as manufacturing, procurement of raw materials and delivering the final product to the vendors. This gave the company an edge against the competition and truly stood out when delivering quality products in record time.

 

The numbers were for everyone to see. And soon enough, other large organizations followed suit. By the late 70s, more than 700 companies had started working with the MRP system. The software ran on a mainframe the size as big as a room and with a computing power less than that of today’s laptops. And even though it performed some of the most basic computations, it was enough for the entire business community to acquire a keen interest in developing the idea into something more sophisticated. They had tasted blood with the MRP and were eager to find out what was to follow.

 

MRP II

One of the greatest challenges that companies faced while implementing MRP was the lack of powerful hardware that could process all the data and carry out complex computations. This problem was taken care of, to a great extent, by the technological advancements in the 1980s. Computer manufacturing companies were putting newer, quicker, and much more compact computers on people’s desks.

 

As a result of this, software companies were able to build a much more efficient, robust, and advanced version of MRP, which came to be known as Manufacturing Resource Planning (MRP II). MRP II had grown leaps and bounds compared to its predecessors in terms of computing power and functionalities. With the help of MRP II, the companies could now integrate many other departments that were previously out of the software’s scope.

ERP

The 1990s was when the world first heard of the term Enterprise Resource Planning, or ERP systems. An ERP software was a tool that created a single database, which was then to be used by all the departments of the organization, making way for their integration in its most real sense.

 

Any query that is fired across the organization’s different arms, such as manufacturing, accounts, inventory and logistics, marketing, etc., eventually finds its way to a consolidated database. This ensures that there is very little room for discrepancies.

ERP II

Right from the early 2000s, the internet has continuously shrunk the world and opened up a plethora of opportunities for companies to collaborate, trade, and make magic together, despite the physical distance that separated them. This meant that the companies no longer had to manage just their internal information flow efficiently, but also integrate several other modules like Customer Relationship Management (CRM), Supplier Relationship Management (SRM), Supply Chain Management (SCM), etc., seamlessly into their system.

 

This led to a demand for a much more comprehensive ERP solution, one that could deliver all of these add-ons while also performing the traditional ERP software duties. As a result, a more potent, all-pervasive tool known as ERP II was developed that could take on these challenges and perform advanced functions on a complex, unified database. 

 

While the early ERP solutions mostly ran on the intranet or could be accessible to only a handful of networks, the newer versions are cloud-based and can be accessed from anywhere with an internet connection.

 

Some of the modules that an ERP II system integrates with are:

  • Supply Chain Management (SCM)
  • Product Lifecycle Management (PLM)
  • Customer Relationship Management (CRM)
  • Supply Chain Management (SRM)
  • Human Resource Management (HRM)

 

Looking Ahead: iERP

Although it may seem, from looking at the omnipresence of the modern-day ERP software that the ERP has finally come into its own, experts believe that we’ve barely scratched the surface when it comes to fully exploiting its potential.

 

In the near future, ERP is expected to be combined with machine learning and artificial intelligence to possess great predictive capabilities and analytical abilities. Currently referred to as Intelligent ERP, or iERP, this tool is expected to work not just on computers but also on smartphones, wearables, and other devices connected by IoT. The possibilities are endless, but one thing is for sure- the journey will only get exciting from here on.

10. List of Top ERP Software

ERP software helps in integrating all of the departments of an organization and functions as a single system. In this blog, we have listed down some of the best ERP software available in the market. The list will enable you to pick the one that is best for your organization. 

 

Let’s have a look at all of them one by one –

ERPAG

It is a cloud-based ERP solution that is best suited for small and midsize businesses across different industries that cover automobile, retail, information technology, education, and more. The basic features cover sales management, manufacturing management, purchasing management, inventory management, reporting and analytics, and accounting and finance. It permits users to manage different business processes that cover selling, receiving, ordering, and delivery. Other features cover payroll, shipping management, user-access management, point of sale, service management, and barcode scanning.

 

Reviews of ERPAG – 216

Supported Platforms – Mac, Win, Linux

Deployments – Cloud 

Business Size – Small and Mid-Level Businesses

BuildSmart

The BuildSmart integrates the project accounting and enterprise accounting for real-time analysis and construction management and engineering business. 

 

BuildSmart is a feature-loaded enterprise resource planning software that has been designed to serve different enterprises and companies. It offers end-to-end solutions for web applications. 

 

The cost of construction management and enterprise resource planning software for building the environment. Designed and developed by contractors for the specific needs of contractors, different software solutions run the entire company-wide collaboration and allow all stakeholders to construct the life-cycle for getting huge success. 

 

Reviews of BuildSmart – 15

Supported Platforms – Mac, Win, Linux

Deployments – Cloud 

Business Size – Small, Mid-Level, and Large Businesses

ePROMIS

It is a hybrid operations management system that offers different business management functionalities that covers HCM, ERP, and CRM. Business solutions 

encompass the whole spectrum of enterprise functionalities that includes distribution, finance, supply chain, inventory management, human resources and planning, and customer relations. Different service offerings are customized for a wide range of market verticals covering contracting, oil and gas, construction, trading, automobile, transportation, healthcare, retail, and supply chain and automobile. 

 

Reviews of ePROMIS- 142

Supported Platforms – Mac, Win, Linux

Deployments – Cloud and On-Premise

Business Size – Small, Mid-Level, and Large Businesses

Brightpearl Software

It is omnichannel-native and designed especially for the retail industry. It is created for reliably and gets handled peak trading that will integrate with the complete retail tech ecosystem that offers real-time trading insights—all it can get automated that you can keep in control and manage by exception. Also, the in-house team is available for installation purposes, tech support, and ongoing business consultancy. Brightpearl has been designed for use by merchants and not by the IT staff. Every single and new feature is similar to retail, and you must understand that everything is focused on retail. All of the retail merchants require a platform that can get handle the seasonal volume. Brightpearl offers different channels, financial and reporting, orders, SKUs are fit for the multi-million dollar merchants.

 

Reviews of Brightpearl – 131

Supported Platforms – Mac, Win, Linux

Deployments – Cloud 

Business Size – Small Size Businesses

xTuple

It is one of the top inventory management solutions for all the manufacturers who are aiming to boost their manufacturing business. xTuple will assist in manufacturing and inventory-oriented organizations that use the management software and make use of the best practices for growing their business in the most profitable way. It will save time as well as money and automate and integrate all types of manufacturing and back-office operations into the same business system. If you are thinking to take sales orders or want to maintain the inventory of shipping and receiving records, schedule production then makes sure that all the financial data is synced well. For all these causes, xTuple solutions have the potential to deliver enhancements for the betterment of your organization.

 

Reviews of xTuple – 116

Supported Platforms – Mac, Win, Linux

Deployments – Cloud and on-premise 

Business Size – Small, Mid-Size, and Large Businesses

WinTeam

It is a cloud-based ERP solution that will help janitorial and security contractors for managing the productivity of the employees and handle financial operations. A wide number of features that are offered are budgeting, real-time updates, attendance tracking reporting, and benefits planning. Supervisors are supposed to make use of the scheduling features for managing the upcoming tasks, work tickets, and tracking of the overtime scenarios. This software will allow the HR managers to record the employee details, configure benefit plans and tracking the absences or time-off, and managing of work tickets. With the help of mobile analytics, all the experienced people can see the performance using the charts and graphs for discovering various growth opportunities that are based on the budgets and revenue generation.

 

Reviews of WinTeam – 111

Supported Platforms – Mac, Win, Linux

Deployments – Cloud

Business Size – Small, Mid-Size, and Large Businesses

Microsoft Dynamics GP

It is one of the best financial accounting systems that is designed for meeting the needs of small and midsize businesses. Originally Microsoft Dynamics was created by North-based Great Plains Software and later in 2001 acquired by Microsoft. The software has different apps for managing finance, human resources, field service, collaboration, supply chain, and IT management. Also, there are different modules that can be bought separately with thousands of third-party apps from the individual software vendors that will get added to the system for getting it fit the extra requirements. 

 

Reviews of Microsoft Dynamics GP – 103

Supported Platforms – Mac, Win, Linux

Deployments – Cloud, On-Premise

Business Size – Small, Mid-Size, and Large Businesses

Acctivate

It is an ERP and inventory management system that has been developed especially for the use of small to medium size organizations. The important features cover purchasing, sales, warehousing, marketing, customer service, and shipping. The solution offers tailored services for different industries that include food and beverages, apparel, automotive parts, industrial supplies, and medical equipment. The inventory of Acctivate control assists all the organizations in handling the warehousing, acquisition, and distribution. Other different features cover picking, packing, matrix inventory, shipment tracking, kitting, barcoding, assemblies, and managing serial numbers. 

 

Reviews of Acctivate – 101

Supported Platforms – Win

Deployments – On-Premise

Business Size – Small Business Size

Skubana Software

Skubana software manages business intelligence, inventory operations, order fulfillment, business intelligence for brands and retailers looks for achieving a multichannel and multi-warehouse business model that focuses on monitoring and boosting profits.

 

Users synchronize data from each and every sales channel which they sell on that covers warehouses, marketplaces, POS systems, big-box retailers, and 3PLs. It has a deep interface but the motive is to gain simplicity. Skubana software helps businesses to consolidate different operations in one cloud-based tool. 

 

Major highlights of this software cover built-in FBA forecasting, automated purchasing, fast implementation times, powerful marketplace features, automated fulfillment logic, consolidated order management, and an open API.

 

Reviews of Skubana – 98

Supported Platforms – Mac, Win, Linux

Deployments – Cloud

Business Size – Small, Mid-size, and Large Businesses

Ellucian Software

Ellucian software is a cloud-based software that offers great help to the higher education institutions with expert solutions for building the connected campus. It is designed for the need of universities of all sizes and all the platforms that offer solutions for different departments like student services, finance, human resources, IT, admissions, and recruiting. 

 

The whole software contains different modules that include ERP that uses different products just like Banner, PowerCampus, Elevate, Quercus, and constituent relationship management that offers Integration and Analytics, Workflow, and Ellucian Analytics. 

 

Reviews of Ellucian – 95

Supported Platforms – Mac, Win, Linux

Deployments – Cloud

Business Size – Small, Mid-size, and Large Businesses