By Dan Bennett, Executive Director, Efficiency Leaders
If you’re looking to scale your business, or you’re undergoing rapid growth, investing in Enterprise Resource Planning (ERP) software may be the logical next step. An ERP will enable you to manage multiple sites from one centralised database, with rigorous and streamlined systems and processes to support increased sales and business activity.
What is an ERP?
An ERP is a suite of business management software applications built to integrate with each other and work together to provide a holistic enterprise solution.
As such, it is made up of various modules that may include finance, procurement and inventory management, asset management, customer relationship management, project management, human resource management, e-commerce, marketing automation, and more. Companies choose the ERP that meets their needs, with many options in the market from generic enterprise solutions to industry-specific offerings.
The value of an ERP is that it brings together all operational information from across the firm in one platform, providing data insights to inform decision making. It also helps companies run more efficiently with in-built workflows optimised and automated to get the best results for the business.
Benefits of having an ERP
For many companies, an ERP may be the first step they take in their digital transformation. And indeed, an ERP can be a game-changer. An ERP supports growth while protecting staff from burn-out caused by ineffective business practices. When a business expands, ineffective processes and procedures are quickly exposed, with staff constantly having to ‘fight fires’ to keep things running.
Alongside supporting business growth, a key benefit of an ERP is that they also help drive profitability. They do this in several ways: As data flows between all connected applications in the suite, this allows many business processes to be automated with one workflow triggering the next. Automated data exchange is significantly more efficient than manually keying data into the system – work that is slow, error-ridden, and expensive for the company.
Automation increases efficiency while lowering operating costs, helping to boost profits. It frees staff from mundane, low-value tasks to take on more productive cost-saving or revenue-generating work. It also allows staff to focus on their core roles; salespeople, for example, can be out selling rather than doing supporting paperwork, and managers can use real-time data to make informed decisions and manage risk proactively.
With staff equipped with the tools that they need to succeed in their jobs, an ERP may also improve employee satisfaction and engagement, contributing to more productive workdays and better results for the company.
What to look for in an ERP?
An ERP should meet your current needs, while being adaptable enough to accommodate future requirements. It’s worth remembering that in being an enterprise solution, ERPs may not be able to execute any one function as well as specialist software can.
For example, while most ERPs may have invoice processing workflows, they may not be able to equal the results an end-to-end accounts payable automation solution. Therefore, an ERP built to allow easy integration of third-party applications may extend the solution’s utility over the long term, enabling better value for money and a higher return on investment.
The first thing a company needs to do is work out what their requirements are. From this point, they can conduct initial market research, reach out to vendors, set up software demonstrations, and review proposals to work out if the package offers the value they require. Beyond the ERP’s ability to meet business requirements, other things to consider include:
- Price – How is the package priced? Is the solution affordable to the company and does it represent good value for money?
- Implementation time – Will there be disruption to your business or possible downtime? How will this impact your return on investment?
- Track record – Does the vendor have significant experience and expertise, as well as customers who will vouch for it?
- Technical support – What technical support is available? Is this local and available when required? Are there easy-to-access resources online, such as ‘how-to’ libraries and community support forums?
- Data security – What measures are in place to protect company data? How and where is the ERP hosted?
- Web-enablement – Is the ERP web enabled to support off-site work? Are some functions mobile-compatible, supporting field work?
- Flexibility – Does the ERP offer a range of modules? Can these be added in phased implementations to reduce the upfront impact on the business? Can third-party applications be easily integrated to enhance the solution’s functionality?
- User-interface – Is the ERP attractive and easy to use? Does it deliver a satisfying user experience? It is likely to get the usage and results you require in your business? Will users require extensive training?
What to look for in third-party applications?
When you have your enterprise software solution in place, you may want to enhance it by adding third-party applications. For integration to be as effective as possible and deliver clear efficiency gains, look for applications that have the following to offer:
- Configuration – ‘Out the box’ solutions that are configurable to business requirements are highly cost effective and quick to deploy, with less building, system integration testing, user acceptance testing, and support required.
- Integration – Applications should support several integration protocols to allow data exchange between software components that have differing architectures and ways of delivering information.
- Automation – Automated data exchange limits manual handling, ensuring data accuracy, quicker processes, greater productivity, and lower costs. With data shared across each connected software components, data silos are eliminated.
- Data security – Several layers of security, including granular access controls, provide the best protection to ensure data cannot be lost, leaked, compromised, or accessed by cybercriminals.
- User interface – A well designed interface and a simple and intuitive workflow enable a straightforward, time-efficient and satisfying user experience.
- Web-enablement – The ability to access the application and its data online, via any currently supported browser or device, enables off-site work and supports greater productivity and employee satisfaction.
- Business intelligence – In built query and reporting tools enable companies to mine data for analysis, informing decision making and providing an additional layer of reporting to the ERP.
- Technical support and maintenance – Local support, available when required.
An ERP may provide the IT platform from which you can scale your business, supporting users in doing their jobs more efficiently and effectively, while providing data insights for more informed decision making and better risk management.
However, an ERP may not be able to adequately meet your every need. Therefore, it may be advisable to choose a flexible solution, designed to integrate third-party applications. This architecture may extend the longevity of your solution, delivering you better value for money and a higher return on investment.
Choosing business software is a significant investment; therefore, it’s important to look for the right features to make sure you’re getting the best possible outcomes for your firm and setting yourselves up for long-term success.
Dan is the Executive Director of Efficiency Leaders, a company that provides accounts payable automation software.