Enterprise Resource
Planning (ERP) software is any of a number of software platforms that bring
together customer relationship management, accounting, core HR, and supply
chain management features together in a single software. Because of the
complexity and number of features available through ERP software, it has been
traditionally adopted by large enterprise corporations, but recent years have
proved that ERP software is useful even for small and medium-sized businesses
(SMBs).
This overview
contains high-level information on what you can expect when searching and
implementing ERP software. For more detailed information, please refer to the ERP Software Buyer’s Guide, or use our Product Selection Tool at the top of this page
to receive tailored software recommendations
Choosing an ERP Software Solution
The ERP buying
process is complex, filled with customization requests and uncertainty about
vendor capabilities. Seeking out third-party help for implementation is common,
and in the case of enterprise vendors, usually necessary.
Employing similar
help makes sense for product research as well. TechnologyAdvice is a market
leader in connecting software buyers to the solutions your business actually
needs. Our resources include unbiased, in-depth examinations of technology
markets, and we have an entire staff of knowledgeable product experts who will
help you narrow down your search to the best options for you.
Contact a Tech
Advisor today or use our Product Selection Tool at the top of the page to
filter solutions based on your needs.
Common Types of ERP Software
ERP software varies widely between systems,
industry focuses, and offered features, however, most systems will offer several
of these modules:
- Humanresources
- CRM
- Finance/Accounting
- IT Helpdesk
- eCommerce
- Supply ChainManagement
- Order Processing
- Inventory and Procurement
In addition to department specific modules like
those listed above, many ERP platforms are specifically designed for particular
industries like manufacturing, field service, or technology.
Industry-focused ERP systems package helpful features
together, and may offer a useful starting point for those new to ERP software.
Benefits of ERP
Reduced Software Overhead
ERP software allows teams to consolidate their
tools into one unified system. Instead of paying for separate subscriptions for
a supply chain management, core HR, CRM, shipping, and inventory software,
teams pay for a single platform that handles each of these tasks in a
centralized system. Depending on the company’s size and complexity, reducing
the number of software system subscriptions can significantly cut the monthly
overhead.
Increased Communication
When all sectors of the company gather in a single
software to plan and track business events, all of the business data can then
be made available for team review. Many modern ERP systems invest heavily in
analysis tools and visualizations that let team members create reports that
show progress, indicate inventory levels, and notify colleagues of wins. ERP
software then acts as the single source of truth for stakeholders to compare
successes and prepare for bumps in the road.
Silo Reduction
While still useful for storing grain, business
silos–where teams work independent of one another to everyone’s detriment–are a
luxury no one can afford. An ERP helps to bring business goals and planning out
into the light of day where teams can share effortlessly with one another. This
allows teams to compare notes across departments, helping everyone move toward
those big business goals.
Standardization of manufacturing
processes
For large manufacturing corporations with several
facilities, sharing manufacturing plans and best practices can be vital for
product and process standardization. ERP systems allow manufacturing teams to
store manuals, blueprints, regulatory information, and vital statistics for
each process in a single, searchable location. This allows processes to be
replicated across county and country lines without sacrificing quality or
speed.
Inventory reduction
Whether it’s the number of widgets or the humans
that install them, it’s costly to keep more resources on hand than you need.
ERP solutions provide inventory tracking and analysis that allows companies to
run leaner. Using technology like RFID tags, geofencing, and biometric data,
ERP systems can track assets through their entire lifecycle from supply to
sale, and many ERP systems will suggest inventory improvements over time.
With reduced inventories, companies can repurpose storage space and cut
down on their payroll costs.
Standardization of human resources
information
Many ERP solutions provide Core HR products like
payroll, scheduling, time clock, and benefits management. These were a logical
extension of the types of software that connected the front of house,
warehouse, and c-suite. With Core HR features, an ERP system can use the time
clock software to calculate payroll and benefits, and managers can access
employee information when building schedules. Because humans are often a
company’s most expensive and valuable resource, it’s vital to connect the
software that manages them with the rest of the enterprise’s data.
Expect from ERP Software
Onboarding and time to market
ERP software is best characterized as a
category of categories: each instance of the software can be made up of varying
features and modules that best suit the needs of the purchasing company. That
being said, onboarding can take anywhere from a couple of weeks to several
years depending on the size and complexity of the purchasing company. Pay
careful attention to features that are included, any integrations you can make
to existing software not covered by those features, and the price of any custom
or add-on features. You should also ask any ERP vendor up-front whether they
have dedicated onboarding teams to assist you in those first several months and
whether they charge an onboarding fee for any and all initial services.
Pricing overview
The ERP software market has exploded in the last 25
years, providing companies with lots of options for both single license and
subscription SaaS products with varying price ranges. Depending on the features
your company needs, an ERP software can range from a couple dollars a month per
user at the SMB level to many thousands of dollars a month for an enterprise
corporation. Refer to individual vendors on the Products page for more detailed
information.
Potential pitfalls
Any ERP software purchase should be carefully
considered, not only because it can be so pricy, but also because of the amount
of data each of these systems potentially manage. You want to make sure you’ve
chosen the right software before you start porting over all your databases. To
ease your transition, ask your ERP partner if they provide onboarding support
like data upload and integrations to other systems. You’ll also want to check
that your ERP lets you own your data with easy exporting.
Enterprise Companies
Enterprise companies often gain familiarity with
ERP systems early out of sheer necessity, but sometimes rapid growth leaves
little time for software enhancement. Enterprises that are new to Enterprise
Resource Planning should pay special attention that the software covers as many
aspects of the business as possible. ERP software for Enterprise corporations
can come at a steep price, so make it worth the cost and calculate the ROI
early. In your research process, calculate the cost and time for onboarding for
each location, branch, or building, and consider whether some branches may need
a less robust regional ERP in addition to the umbrella company’s software.
Finally, factor in that the introduction of a company-wide system like an ERP
will need sufficient training across departments. Ask vendors what they provide
in the way of online and in-person training sessions, or whether they can
suggest training consultants they trust.
Comparison of SAP, Oracle, Microsoft Dynamics
SMBs
Small and medium-sized businesses can benefit
greatly from ERP software that streamlines processes from supply to sale and
reduces overall software overhead, but like many things in the SMB market, it’s
important that these businesses weigh pricing models against offered features
and potential ROI. It’s more common to find cloud-based subscription ERPs
across the market, which is great news for SMBs who can’t justify the one-time
expense of a standalone software license. SMBs would be wise to ensure that an
ERP system they contract with is as useful (and user-friendly) for as many
departments as possible, but may not need as widespread coverage as those in
larger Enterprise corporations. As lighter ERP models may also come with less
onboarding and in-person training, look for platforms that provide ample
support and documentation.
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