ERP Software Explained
29/04/2011 12:00 AM

Enterprise resource planning (ERP) allows you to have an overall approach to the way your business operates. Instead of having multiple applications to do different jobs, ERP Software will allow you to perform most business functions within the same program. If you are having difficulties with the flow of information in your business, ERP may be a solution.

The definition of ERP seems complex, but it is mostly a way of having all departments and systems able to access the same information in real time. This software can cover the following sections of a business:

  • Finance and Accounting
  • Human Resources
  • Manufacturing
  • Supply Chain Management
  • Project Management
  • Customer Relationship Management

As you can see, with all of these systems integrated into one, confusion between different areas of your business will be cleared up. It also makes it possible (at last!) for people working in different departments to understand the software used in another department. This can reduce training costs and allow your staff to maintain multiple roles within your organisation.

Standardise Your Software (look and feel)
If you have a standard look and feel to your business software then all systems become familiar to all of your staff. That means someone in accounts, who would previously have had to contact a salesperson about an order enquiry, could access this information themselves. The functionality of the software your business uses should aim to give you and your employees less headaches.

A Common Database
The most important aspect of an ERP is its use of a common database instead of individual databases for all the different software used in a business. This takes away the problem of manually entering data from one system into another which will reduce the chance of human error. This also saves time when placing orders, invoicing and managing inventory. With a common database your business records will be updated in real time, which will save you time.

Different Types of ERP
Depending on the size and structure of your organisation there are different types of software solutions to consider. While you may opt for a standardised setup covering your inventory, billing and ordering systems, there are custom solutions as well. If you are operating with a large number of employees it would be important to incorporate human resource management into your ERP.

Implementing ERP
Implementing new software and systems can be a costly and time consuming exercise, so it pays to do your homework and list the positives and negatives. While the above outlines positive uses of Enterprise Resource Planning there are things you need to consider during the implementation process:

Changes in Workplace Practice – Your employees will need to learn the new system.

Data Migration – You will need to have your old records transferred into the new system.

Time to Install and Configure – Any new system needs to be set up, and usually requires a consultant. The time to implement large changes is dependent on the size and structure of your company.

Despite the difficulty in changing over to a new system the improvements in integration within a business can be seen in the medium and long term. Always keep in mind the positives and the negatives when considering such a large change, and remember to allow room for any further extensions or customisations, as you may need them as your business grows.

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