The IT world is improving at a rapid pace, providing various extensions and solutions. ERP aims to become an ideal tool that carries all the business processes in one system. It is made for convenient use and the possibility to scale the company through its development.
ERP systems have evolved and are now trying to embrace as many niches as possible, starting with finance applications and ending with HR management. There is a diversity of different ERP systems. That’s why it can be difficult for entrepreneurs to choose the best option for their specific needs. Let’s consider the main features, advantages, and characteristics that you need to know before choosing an ERP system, and see some enterprise resource planning system examples.
Characteristics of an ERP System
Using an ERP properly, you can improve and optimize the majority of your business processes, since it can be implemented in various spheres of the company’s work. You can set it up according to your organization’s needs and personal preferences. Since the ERP is not a holistic system it has different models, which control the following aspects:
- Order processing;
- Employees & staff;
- Project management;
- Budget forecasts;
- Enterprise resource planning.
The most valuable advantage is the elimination of manual processes, or business automation. It reduces the risk of human error and helps to perform operations faster and easier.
ERP destroys virtual walls between departments since everyone on the staff uses one platform. Your employees will not be isolated anymore: the system will provide an interface with the important tasks and data and facilitate co-workers to cooperate.
Regardless of the size of your company, ERP is available for anyone nowadays. The cost of such applications is reduced since there is no need for local equipment. All your information is kept and saved in the cloud, which provides regular updates and data security.
ERP Modules: Traditional Types
An ERP system is a modular application that contains various tools for different business processes. Let’s see the most important ERP system modules:
- Supply chain management (SCM). It helps employees to control all the processes related to chain supply. For example, there is always a need to plan the amount of material and calculate the commission;
- Product lifecycle management (PLM). This module may be helpful for companies that have their own production. Starting with the control of the project’s design and its quality, ending with the costs and spends, it optimizes the consumption of the components and materials;
- Supplier relationship management (SRM). The unfortunate reality is that suppliers can sometimes be unscrupulous or forgetful. The SRM allows scheduling business meetings, calculating the budget, and billing the suppliers;
- Customer relationship management (CRM). This module is one of the most important functions, since it establishes the connection between your marketing specialists and the customers;
- Human resources. If you have a medium-size company, a huge enterprise, or one that you plan to grow, this module will help your HR department. In such companies, it is difficult to keep every staff member in mind. The module contains a database with all the contact and salary information, employee’s attendance and engagement;
- Finance module. A machine is much more accurate than a person, which makes it the best tool for assets management, including any types of arrears. It also gathers all the financial data from the other modules and departments, analyses the information, and creates reports.
As you can see, the ERP system is a vital tool for your company’s growth. It processes many operations such as supply, delivery, finance, and much more. You may find the platform helpful at each step of the product’s lifecycle, from its production to its sale.
Now let’s take a closer look at ERP architectures.
Types of ERP Architecture
The two main ERP software architecture categories are the monolithic system and the postmodern system. It is already clear from the name which of the types is the newer one. But newer does not necessarily mean better. What are the differences between the systems?
Monolithic architecture of ERP system
- The monolithic type of ERP systems has a single technology stack and supplier design;
- To improve the system, you will have to update it;
- It is not flexible and cannot be scaled with business growth.
Postmodern architecture of ERP system
- The system is oriented on customers since it is convenient to use;
- The set of products also includes social media and a cloud;
- The postmodern type is flexible and simplified. It does not have tables or other complex things that were used for scaling in previous ERP products.
The postmodern option is easier to use and is much more customer-oriented.
ERP System Examples
What if you have never seen or used such a platform? Well, it is likely that you have tried it at least once. Let’s see some examples of ERP systems:
- Acumatica. This cloud ERP is perfect for small companies that require basic accounting services for less than 10 users;
- Oracle NetSuite. This solution provides business data visibility for reasonably small prices. Besides, it is oriented on long term relationships, since you can scale it with your company growth;
- Sage. This ERP offers several products for small businesses. Their aim is to run the finances, automate your main manual processes, and cut the time that you spend on tasks. The application manages the credit and debit aspects as well as salaries according to USA tax requirements;
- Microsoft Dynamics. This ERP allows you to develop and set up some of its aspects according to your companies’ capabilities, audience, and monthly budget. It also has various partnership products to integrate for a wider functionality;
- Epicor. On this platform, you will find a lot of different modules for your business operations;
- Infor CloudSuite. The main advantage of this ERP is its flexibility. It is a great option for fast-growing companies that need to predict changes and meet requirements;
- QAD. This is an easy cloud ERP solution that will not cost you a fortune. With QAD, small companies can count on an ERP entry point for fast business development;
- Oracle. It specializes in the creation of corporate software products and mostly offers database management systems. It is a great option not only for huge enterprises but also for startups, since regulation of the information can save your employees’ time;
- PeopleSoft. The company provides human resources, production, finance, and customer relationship management. It is a must-have tool for every niche and organization.
Advantages of ERP: Is It Worth Developing New Software?
What do companies find ERP systems useful? There are many areas that need ERP implementation. In other words, such an application simplifies your business by protecting your information, automating some processes, and creating reports. Thus, day-to-day operations and planning become more efficient and easy to perform. Let’s take a closer look at the most valuable ERP advantages: IT costs reduction. Although the platform requires expensive investments, it can reduce your IT costs and increase its efficiency. Instead of spending such resources as employees, support, and money for licenses on different systems, you can focus all the expenses on a holistic ERP platform. Besides, your staff will no longer have to learn how to use a wide range of various tools or functions. The platform contains modules that control each area of your business.
Better visibility. ERP provides access to all business processes not only for every department but also for you and the company’s managers. At any time, you can see the work results, the stocks, the sales, and the employees’ efficiency. It will help you to keep your staff alert and control each business aspect. The employees will be able to get a consistent workflow, establish easier communication, and quickly make decisions.
No more manual reports. With better visibility, you get improved reporting and planning. ERP provides each department with a unified reporting system for each process. With a single source of reliable information, the application can create useful reports and analyze the data. It helps to compare different departments’ functions and efficiency without spreadsheets and emails. For example, all of the necessary finance reports will be generated without IT intervention.
Flexible modules. One of the most important ERP advantages is its structure. Most engineers suggest implementing multiple system parts together to meet all the company’s needs. Each module is developed for autonomous operation or following larger package integration. Thus, you can choose only those parts which fit your business processes.
Improved efficiency. Day to day activities will no longer take so much time and effort. By implementing ERP, you can get rid of repetitive manual processes and lessen your staff’s load. Thus, they will be able to focus on other important tasks that increase your income. Besides, the system helps to coordinate all the company activities. You will be able to control such processes as demand forecast, order creation, and product tracking from production to delivery stage.
Interaction with clients. Your customers will also feel the difference after the ERP implementation. Your team will see the centrally collected and structured information about all the clients. They will be able to focus on establishing and maintaining relationships instead of spending time on trying to find the consumer’s name, order, and other data in the system. Thanks to the platform’s analysis, you can improve your interaction with the customers and increase their loyalty.
Data security. As was previously mentioned, the safety of your information is one of the most valuable ERP advantages. It is important because the system is full of various confidential information, from customers’ orders to finance reports. The best feature is that you can control access to the data. By selecting a circle of persons who can see or edit the information, you raise its security level. Besides, the data is kept and saved in the cloud, which makes it difficult for hackers to steal.
Key Benefits of ERP Implementation
The aim of the ERP software is to optimize processes, improve the communication between departments and their efficiency. But the main reason entrepreneurs choose these solutions is an opportunity to save their time and money while making a profit and growing. ERP applications can cost higher than you expected, but it is worth every single cent. Let’s see the benefits you can get by implementing ERP.
Operating costs reduction
ERP helps to unite all the business processes in a holistic system. It leads to the improvement of coordination and raises the company’s efficiency. After the implementation, you will be able to see the crucial difference. The employees will have more time to devote to other tasks, or you will even be able to cut the staff because some manual processes will be fully or partly automated. You will be able to reduce the cost of marketing and production as well as the cost of office maintaining.
Facilitation of day-to-day management
The application provides better corporate planning and easier data access. It helps the employees to make decisions based on the available information. ERP can also control the actual operations’ costs and calculate the spendings.
Strategic planning support
Such processes determine the goals, tasks, needs, assets, and results that entrepreneurs use for analysis. It helps to plan the company’s opportunities and future actions.
Which Types of ERP Software are the Best for Your Business?
Now that we have considered all the ERP types and have seen some successful examples, the only reason why you may still have doubts is the cost. An ERP solution does not come cheap, but it is worth its price.
If you have technical questions or are not sure what type of EPR to choose, Diceus is always ready to consult you. Our team has over 250 experienced people who are ready to up your project to master level. We work in Ukraine, Denmark, UAE, KSA, and Lithuania. For more information, you can visit our website. Let’s give your business a boost together!
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