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Answered November 05 2019
Enterprise resource planning (ERP) software helps companies manage all their business-related procedures and processes more efficiently. An ERP system can help an organization stay on top of a myriad of details, share information across divisions, and operate more productively.
ERP software is an integrated set of technologies and systems that help medium- to large-sized companies manage business operations and automate processes. A centralized computer system holds company-wide and division-specific information, so it can be accessed and used by all the team members who need it.
An ERP system essentially collects company-wide information, automates workflows that require a high degree of manual labor, and provides the resulting data in real-time across divisions. This increases transparency to both management and team members, facilitating better decision-making, as well as increased productivity.
Over the last few decades, ERP has evolved to become a critical management tool for modern business. It not only provides management, organization, and automation of financial details, but also helps with logistics, reporting and other aspects of a successful organization.
One important component of an ERP system is the accounting and financial portion. These capabilities help the finance and accounting departments of a company to track costs, and subsequently, find ways to lower them. Since the financial component is integrated into the entire ERP system, this can be done in a business-focused way and aligned with overall company objectives.
Since ERP is all about integration, it can make a huge impact on a business’ ability to manage logistics. For example, product and item numbers can be scanned and the flow of items can be easily tracked from ordering through final usage. Shortfalls, backorders, transportation problems, and other logistics issues can be identified, communicated and dealt with in real-time, helping management may faster decisions.
ERP automates menial, repetitive tasks that conventionally had to be completed by individuals. This helps companies not only reduce the costs of these tasks, but also allows organizations to shift the human workload to higher-level, higher-paying, more rewarding activities.
Since an ERP system holds a wealth of data, it can generate helpful, analytical reports that can help management make better-informed business decisions. Reports can be generated on a daily, weekly, monthly or annual basis and provide up-to-the-moment data, so that decisions can be relevant to the current business landscape.
Every company works somewhat differently, and having a computer system that allows you to customize how it is used is critical to it serving all your needs. ERP systems allow complete customization because it is usually sold in modules. That means you can implement the most critical components first and add additional modules that can be easily integrated as you grow.
In today’s competitive marketplace, meeting customers’ growing and demanding expectations is critical to a company’s success. Because ERP is all about integrated data, this helps your customer service department develop superior service. Your representatives can easily see into your company processes, order and shipment status, and production lines to understand exactly what is going on. This information can then be communicated with customers and used to mitigate potential customer service issues.
Along with sharing critical data across an entire organization comes the importance of keeping that information secure. Because an ERP system allows streamlining of data entry, high levels of security controls can be consistently applied to all company data.
Everyone hates corporate silos and the inefficiencies that tend to come with them. Because ERP focuses on integrating data from all departments and then delivering this information back in a usable form to those same departments, it is key to help break down silos. This increases collaboration between divisions, helping everyone do their jobs more effectively and efficiently. It can also improve company morale as a result.
Since ERP systems are so complex, it can be difficult to classify them in helpful terms. Let’s consider a few possible categories to help you understand the different organizational structures as well as market segments.
Cloud ERP is the most recent offering of this technology, which has been made possible by high-speed internet and other technological developments. This is the most flexible and best type of ERP system.
Before high-speed internet, most companies had to use an on-premise system. This ERP system must be installed, maintained and upgraded within the walls of an individual business. It is often slower, less efficient, and more costly to run because of all the infrastructure management a company must have and maintain.
In this case, ERP is offered and hosted by a SaaS vendor or provider who handles all the upgrades, security issues, and data management. The SaaS offers a fully formed software offering compared with only the infrastructure available through cloud computing.
Both cloud-based and on-premise systems can be general in nature. This means they can be customized across different industries. These solutions must be very flexible to provide integration within highly varying circumstances.
This is a rare type of ERP, which allows the continuous development of unique apps that can provide a high-level of customization.
Some smaller ERP vendors offer hyper-specialized solutions designed to meet the intricate needs of one particular industry.
These ERP solutions are designed for small businesses who don’t need all the capabilities of the larger players. More affordable and easier to implement, these off-the-shelf solutions focus on only the critical, basic offerings of an ERP system.
With the advent of high-speed internet and the accompanying technologies, cloud ERP solutions have become the best and smartest way to implement ERP. Cloud-based systems deliver a host of benefits to companies including lower costs, faster upgrades, and better security, clearly outperforming on-premise systems.
Because cloud-based systems are developed and managed by a third-party, costs are significantly lower for client businesses. ERP is the bread-and-butter for the cloud ERP providers, which allows them to develop better products at a lower cost for the companies using the system.
Upgrades can be costly not only in terms of development but also in deployment and implementation. Companies who use on-premise ERP systems simply cannot afford frequent upgrades that may disrupt other priorities. Cloud-based ERP solutions, however, can develop and test upgrades for all client customers and make deployment much easier across client companies.
In the same vein, the initial deployment of an ERP system is much faster with a cloud-based system. Companies don’t have to worry about hardware, software and other structural issues; an ERP provider manages those.
Because cloud-based ERP systems are managed by an expert, your company can focus on its own growth and business goals. Your chosen cloud ERP system should be able to easily grow with your organization, regardless of that pace.
Data security is critical to maintaining a competitive advantage and safeguarding company processes and procedures. Cloud-based ERP companies make it a top priority to protect client data. Since cloud-based systems are consistent and streamlined, it’s easier to create and update security offerings and protocols.
If you’re looking for a maintenance solution, you have several options. If you are a larger organization or already have an ERP system implemented, you may be able to manage your maintenance requests as part of your existing system. However, if you’re a smaller organization or have heavy maintenance-related needs, you may be better off investing in a CMMS system. Plus, this route may allow you to integrate with your ERP later.
Both ERP and CMMS simplify work requests by providing a central location for the collection, management, and tracking of needed maintenance work.
Once work orders are entered into a CMMS or ERP, you can manage associated information such as parts, materials, and labor. In addition, these systems provide a portal for anyone with access to track progress of particular work orders.
For many companies, keeping track of assets, where they are located, which technician is using them, and when they require maintenance can be a significant challenge. Both ERP and CMMS solutions can help manage this activity more effectively.
By employing an ERP or CMMS solution, your company can automatically create a preventive maintenance schedule on a regular basis. That relieves the burden from the maintenance staff yet ensures that needed work gets accomplished on schedule.
It’s worth stepping back and taking a look at your organization and its current needs before deciding whether now is the time to invest in an ERP. A few possible indicators involve your current efficiency level, growth rate, and use of other technologies.
If you find that you still are relying on employees to complete repetitive, menial tasks, it may be a good time to consider investing in an ERP. Remember that one of the biggest benefits of an ERP is its ability to automate repetitive tasks. Use the opportunity to drop your costs and retrain your team for higher-level, higher-paying, and more challenging work.
When you look around at your processes, take stock of how many inefficiencies currently exist. If you were able to eliminate those inefficiencies, consider how much faster you could deliver product to customers or meet order requirements. When you consider how much improving your efficiency could affect your bottom line, you may see that an ERP is worth the investment.
Success and growth is a goal for all companies, and if your current processes are holding you back from these possibilities, you may want to consider an ERP. Cloud-based systems are ready to scale as quickly as your company requires, helping you to gain efficiencies every step of the way.
If you’re currently maxing out the capabilities of your CMMS, it may be time to either make the switch to an ERP or integrate your current CMMS into a larger ERP system with more abilities and options. The data you’ve collected in your CMMS solution can provide a great foundation for a cloud-based ERP system.
Whether you’re ready for a full-blown ERP system or are looking for a simple CMMS solution, taking this step will certainly help you improve efficiency, boost productivity, and reduce costs. Check out UpKeep for free if you’re looking for a mobile-first CMMS that can easily be integrated into a cloud-based ERP down the road.