A complete guide to everything about ERP

The Enterprise Resource Planner is a system that integrates all the processes that take place in an organization in one enterprise system. This way, it is easier to manage and update everything from one place.

ERP is a database management system that can include the following activities,

  • Risk Management
  • Procurement
  • Accounting
  • Supply chain
  • Manufacturing
  • Human Resource
  • Task Scheduling

ERP software aggregates all the data from required entities and then automatically updates them when any changes are made. This way, it removes the hassle of updating various goods or services every time a change is made.

The ERP software brings order to chaos by collecting full availability of different entities, and instead of updating each entity spreadsheet individually, ERP automatically updates those values at once. So, the tedious work of monitoring them and updating them one by one is eliminated by the use of ERP systems.

Benefits and Business values Of ERP

In today’s world, where information management is vital, the need for a unified planning system is essential more than ever. As enterprise data goes through an ERP system, all the different departments and systems get aligned, and this results in a significant saving of resources.

Examples of business benefits by implementing an ERP system

  • Improves business efficiency by generating reports based on real-time information.
  • It lowers the risks of losing data or any type of miscalculation as all the processes are automated.
  • Availability of consistent data all the different services are updated as soon as any changes are made.
  • Enhances the productivity of employees by cutting down tedious tasks using automation.
  • Suits your specific needs as ERP systems are made as per an organization’s requirements.
  • Reduces risks by giving financial control and improving data integrity.
  • Collaboration can be smoother as users can access contracts, purchase documents, and requisition forms from one place.
  • Minimizes cost for operating and managing several different departments, as automation is a crucial feature of an ERP system.

Types of ERP

Mainly there are three types of ERP systems

Cloud-based ERP system

Cloud-Based ERP system is a type of Software as a Service (SaaS); it allows the user to access service via the internet. One of the top benefits that cloud-based ERP system provides is that the business administrator can access all the data from anywhere in the world at any time.

Also, using internet cloud storage reduces the company’s cost compared to storing data in physical storage. The company can take cloud storage on lease for a fixed duration, and if they don’t like the services of the provider, they can even choose to switch providers as soon as the contract terminates.

On-Premise ERP system

An on-premise ERP system, unlike a cloud-based ERP system, isn’t virtual. It is implemented in a physical office space and maintained in the duration of its operation. Like the cloud-based ERP system, the on-premise ERP system can be accessed through mobile and different handheld devices.

However, the on-premise system incurs the cost for maintenance and implementation after a certain amount of period. But with the on-premise system, you have the control and ownership of the whole system once it is implemented. The dependency on the vendor is less in the case of an on-premise ERP system. Also, it offers more security compared to the cloud-based system.

Hybrid ERP system

A hybrid ERP system gives you the best of both the above methods without any compromises. While it costs less than an on-premise ERP system, a hybrid ERP system also gives all the benefits of a cloud-based ERP system.

Loose coupling among modules is allowed by the Hybrid ERP system, so it is considered more flexible compared to the other two methods. Less amount of training is required to provide to the employees in case of the hybrid ERP system. As a result, the expenses will be lower. Hybrid ERP offers a more realistic and contemporary idea like cloud-based solutions that could be combined with on-premise solutions like financials and manufacturing.

What are the best practices for implementation?

The implementation of an ERP system is a crucial task for any organization. There are many aspects like costs for implementation, available physical space, the availability of proper cloud-based service, and more such things that need to be taken into consideration. Here are some vital points that you should consider while implementing an ERP system for your company.

Be realistic when it comes to ERP implementation

ERP system is indeed a potent tool; it streamlines your goals and eliminates all the tedious work to increase efficiency- but this process takes time. As ERP systems encompass processes like manufacturing and accounting, it takes time to integrate these entities properly. If all the required variables are adequately set, then only the seamless product experience, all the organizations are looking for, can be delivered.

It can take upto 2-3 months to implement the system. In order to boost this timeline, make sure that you have scoped the project properly. Also, consider taking hiring an experienced and knowledgeable ERP expert who can take care of issues arisen while setting up your system.

Choose the best type of ERP for your needs

While picking your ERP system, it is essential to think about your future requirements as well. There are a lot of ERP options to choose from; you can even build an ERP system on your own. But building a system this much complex can take much time, cost, and other essential aspects of your company.

Organizations should keep in mind to choose ERP systems like NetSuite that are easy to update in the foreseeable future. Two out of every three mid-size organizations have kept the old ERP systems still in use. The reason is that updating the whole policy could result in losing necessary customizations and integrations. So try to choose a cloud-based system as they are easy to upgrade and can preserve your custom integrations.

Prioritize your key entities to manage

Before you start implementing the ERP system, keep in mind that your fundamental variables, like staff resources and resource management are in place to achieve the desired results. This seems as something a company should not miss, but deploying without checking these prerequisites results in unhappy employees and non-optimal ERP installation.

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