What DNS can do for you ERP Systems
Part One: What Is ERP?
A look at the concept of ERP and advice on the issues facing businesses considering ERP implementation.
Part Two: How ERP Can Help Your Business
The specific benefits an ERP can bring to a small or medium-sized company
Part Three: Selecting the Right Solution & Supplier
Steps you should take and questions you should ask when selecting an ERP solution.
What is ERP?
Enterprise resource planning (ERP) refers to a management system that is used integrate the various departments and functions of business into a unified system.
The single system is composed of various software modules and components that handle all the different processes of each department, from manufacturing operations to finance and human resources.
An ERP system will generally require both hardware and software components. The system is most likely to have a single data warehouse (a central database). While ERP systems originated from the need for manufacturing planning systems, they are now enterprise-wide in their functionality.
ERP suites come in many forms and many are scalable to the requirements of a medium-sized business.
Many people still think of ERP as a back-office solution, newer versions come with inbuilt CRM functionality.
The original ERP systems were integrated monolithic packages, but newer ERP systems are more flexible and can be installed as separate components.
This is a much better solution for medium-sized companies.
This means you can install the ERP modules incrementally, as needs or costs dictate. You will not have to worry about interoperability as you expand your ERP solution.
The aim of ERP is to aid interaction between departments and allow all the different business functions access to vital information.
This can lead to concerns about data integrity and security. A company likes yours must handle this issue carefully. Plan appropriate dissemination of data in collaboration with your ERP consultant.
You will hear talk about huge and expensive ERP implementation failures. To avoid finding yourself in a similar situation, it is essential that you take ownership of the ERP implementation.
Even a well-planned ERP implementation will lead to a great deal of upheaval in your business, and will change the way your business functions. You need to focus efforts on employee retraining and formulating new work processes to make it a success. Your ERP supplier or consultants can help you in this area.
While ERP is introduced into an organization as a software solution, it is really a work methodology that requires a great deal of business process analysis and system re-engineering beyond the software.
In choosing to implement ERP, you are also committing to a complete change of business processes. The good news is that this will lead to business benefits and cost savings in the end.
How ERP can help Your Business
Enterprise resource planning (ERP) systems are typically used to replace a disparate set of individual
systems strung together in a complex and clumsy manner. These isolated systems often operate on different
software and hardware, and utilize separate data warehouses.
Managing the interfaces between the various systems is a task in itself. Thankfully, ERP packages offer a solution to this while bringing specific and tangible business benefits.
- ERP systems make it much easier to integrate systems across multiple locations.
Most ERP systems run on a single database, which means there is only one data warehouse to manage and maintain. This single database system also means here are fewer points of failure in your system as a whole.
- The processes that go into fulfilling a customer order are automated and enhanced by a successful ERP system. It creates a software flow chart for each step in the process to give direction to the whole.
- • Every employee in the chain sees the bigger picture and becomes more accountable for their role In order fulfillment.
- As all department systems are connected by the ERP solution, they can gain access to essential Inter departmental information. Thus, any employee can see the information required to fulfill an order. This leads to better levels of customer service because employees have complete information in front of them. This means that they are better able to answer questions and take decisions on the spot.
- ERP systems can speed up the manufacturing process through automation in areas such as procurement and production planning. This can help reduce the costs of carrying inventory and increase inventory turnover.
- This additional automation of processes means that fewer employees are needed to run the business. This means the company can save money by having a leaner structure. Simplified supply chain operations mean you gain more responsiveness in terms of both quality control and timeliness.
- ERP systems enable you to remain competitive by taking advantage of the latest technologies in your market segment.
Selecting the Right Solution & Supplier
Steps you should take and questions you should ask when selecting an ERP solution.
You will probably find the task of choosing ERP solutions that fit your business requirements somewhat daunting. That is why so many small and medium-sized businesses opt for professional advice. In addition, there are plenty of consulting organizations that have an in-depth understanding of the available
solutions and their functionality.
However, before you go to them for help, you need to consider the solution from three broad perspectives:
Organizational
You need to consider the size and structure of your organization. Map out your strategic goals. Then carefully choose the level of automation you desire to achieve them. However, make sure this fits within your budget.
Functional
ERP software is modular in nature. It generally splits into functions such as accounting, manufacturing, HR and CRM. Within this, each module can have sub-modules with hundreds of reports, forms and functions. During the selection process, evaluate the software functions with sample historical data to find the best match. It is vital to identify the functions and features in the new ERP system that will provide meaningful and quick access to data.
Technology and Vendor Selection
Other than the usual due diligence activities for vendor selection, keep in mind the system requirements and underlying technologies that power the product, your vendor provides. These may have significant bearing on your future organizational objectives.
Ask questions like these:
• Does the product depends largely on proprietary hardware and software back-end technologies and is it likely to increase staff training and overall cost of ownership?
• A vital step in choosing an ERP system is the selection of a project manager. The project manager acts as a liaison with vendors, coordinates internal needs assessments and creates a selection team, which should
represent all the business units in your organization.