Enterprise Resource Planning

What is ERP and why do you need it?

ERP is an acronym that stands for enterprise resource planning (ERP). It’s business process management
software that manages and integrates a company’s financials, supply chain, operations, reporting,
manufacturing, and human resource activities. Most companies have some form of finance and
operational system in place but most of the software that’s out there can’t go beyond everyday business
processes or help with future business growth.

As company’s needs change and they expand, their systems should keep up with them. We’ll define
what ERP is and why it’s smart to have software in place that keeps up with your business needs.

What is enterprise resource planning? Yesterday and today.

In the past, businesses had some sort of accounting, finance, or HR process but the software systems
they had often worked separately and didn’t talk or work with one another. What makes modern ERP
software different is that it brings all these different processes to the table to collaborate and create one
fluid system.

Current solutions also allow each department to see what the other is doing. The result is that
accounting and HR can easily collaborate with sales and customer relationships.

Benefits of Enterprise Resource Planning Software

Organizations need to be well aware of the various advantages of enterprise resource planning
software before deciding to invest in a world-class solution. Here are some major advantages of modern
ERP tools that can bring about a world of positive change in business firms:

 Increases Productivity
ERP systems enhance overall efficiency by integrating all vital business functions. Accounts, supply chain
management, marketing, and human resource processes can all be managed by a single portal. It
automates routine day-to-day tasks and is able to display data through analytical reports. Visual
dashboards allow managers to have a quick glance at parameters and take better decisions.

 Promotes A Culture of Collaboration

ERP is a useful system that breaks down the walls between various company departments. It promotes
the smooth flow of information between departments and helps teams work together in an atmosphere
of collaboration. This boosts innovation and also aids in keeping the work culture healthy and
harmonious.
  Stringent Data Protection
One of the best aspects of enterprise resource planning software is that it does not compromise data
security. Most modern ERP tools have a number of in-built regulatory features that protect data from
unauthorized access. It has the flexibility to detect suspicious activity and lock out users that are not
authorized to view sensitive information. This makes sure that there are no fraudulent activities and
data remains protected from miscreants or hackers.

 Enhances Compliance
ERP solutions make sure that companies adhere to mandatory regulations and do not default on any
taxation or financial issues. They follow all essential protocols and ensure that business organizations do
not get penalized for wrongful actions. ERP platforms are indeed a smart way to escalate industry
compliance and regulation of all legal issues.

 Accurate Business Forecasting

Advanced databases and analytical abilities make it possible for ERP systems to give accurate business
forecasts. They can throw light on strategic key areas such as expected sales, revenues or cash flows.
ERP software is an intelligent tool that facilitates organizations to remain more proactive and gain a
competitive edge in the market.

Why some businesses are afraid to embrace ERP implementation

Despite all the options out there, some companies are still hesitant about ERP. There could be many
reasons why, but where there’s a fear, there’s a solution.

FEAR: How do I know I’m choosing the right ERP solution for my business?

You don’t have to find the perfect software solution to fix everything. ERP should actually be able to
take the best of the business processes you’re using now and bring them together under one system,
while letting everyone in your organization view the same information. This is where your choice of at
technology partner is important.

FEAR: We can’t afford a major ERP overhaul.

A solution doesn’t have to be an all or nothing implementation proposition. Software solution modules
can be purchased separately depending on your business needs. This will help your team ease into the
implementation piece of ERP and it’ll save having to invest in a major software renovation without
knowing whether or not the functions you’re adding will pay off.
FEAR: We don’t want to lose the systems we have in place now.

As we mentioned, any ERP solution you choose should work with what you’re using now but also include
features that can help in your future growth. For instance, if the software you have mostly handles the
financial, supply chain, and manufacturing sides of your business, you may want to look for a solution
that brings in a strong business intelligence component.

Various ERP System Modules

Most enterprise resource planning systems have a number of sophisticated modules. These modules
handle a vast and diverse range of organizational functions. They are scalable in nature, meaning that
organizations can always add more or additional modules as they grow in size or operations.

It is essential for organizations to be well aware of their organizational needs so that they can select the
modules most suited for their workflow. Here are some of the important ERP modules:
  Sales and Marketing
Managing the entire sales cycle and automating marketing processes is an important part of ERP
systems. It stores essential sales data such as customer inquiries, quotations, orders, and invoices.
Pending sales orders can be tracked and the information can be relayed through alerts or notifications
to team members. Advanced ERP system modules related to sales also have the ability to integrate sales
tax rules and shipping trackers. Typical sales processes are automated and this largely reduces the
workload of the company sales teams.

ERP solutions also store and track marketing campaign data. They can measure client engagement,
email campaign success rate, and search engine optimization statistics. This enables organizations to
invest in marketing initiatives that will pay off well in the long run. Sales and marketing are one of the
most successful and useful ERP system modules. It escalates lead generation and optimizes the sales
cycles, thereby pushing up profitability to the highest possible levels.

 Customer Relationship Management

Customer is kind and keeping customers satisfied is very important in the current dynamic business
environment. This is precisely the reason that CRM is one of the most popular and widely subscribed
amongst all ERP modules. The major object of the CRM module is to increase sales performance by
providing customer support and holistic experience to clients. It stores vital details of customers in a
structured manager such as name, call history, purchase preferences, demographic details, and contact
details. CRM modules of enterprise resource planning software ensure that this client information is
easily accessible to all employees who are in contact with the customer.

CRM modules is a great support to organizations and enable team members to give quality service to
loyal customers. It allows sales or marketing professional to develop a better relationship with clients by
giving them personalized attention. Most ERP systems can integrate the CRM module with the sales
module to speed up conversion rate and capture maximum opportunities in the long run.

 Financial Management
One of the most important ERP system modules, financial management helps to manage all cash inflows
and outflows. It covers all the regular financial and accounting functions such as ledger management,
balance sheets, expenditures, and bank reconciliation. One of the most essential functions of the
financial management modules to handle taxation and ensure that it is in accordance with current
government regulations.
Advanced financial reporting is a critical function of the financial management or accounting module. It
is able to display all important statistics so that managers can get a quick idea about financial status. ERP
systems also have analytical abilities that facilitate real-time monitoring or tracking of all accounting
activity. One useful benefit about the financial management module of ERP software is that reduces
manual calculations and automates the accounting function, thereby largely reducing the workload of
the department.

 Manufacturing
Enterprise resource planning systems are commonly used in the manufacturing industry. The
manufacturing module is tailor-made for manufacturing firms and one of the most well-designed ERP
modules. It handles the flow of engineering at all stages and ensures material management, quality
control, and expenditures. ERP tools optimize the production planning process. It ensures that all
resources are well utilized and the manufacturing capacity of the organization is functioning in an
optimum manner.
The manufacturing module is an automated solution that monitors the day-to-day production activities.
Some vital functionalities include shop floor control, plant maintenance, distribution planning, and
materials sourcing. Harnessing the power of ERP systems greatly reduces extra costs associated with
manufacturing by enhancing operational efficiency and task flow management.

 Human Resource Management

People management has gained tremendous importance in the business world. Organizations have now
realized the immense value of the human resource management ERP module as it can handle all HR
related activities seamless. This module includes tools such as time tracker, attendance sheets, skills
matrix, and performance management systems. HRM module of ERP software also manages a
comprehensive and updated database of all employee records. This enables managers to have complete
employee data at their fingertips, and make sure that the right person is put on the right job.
Another function that makes the HRM modules one of the most widely used ERP system modules is
payroll management. It handles the entire range of activities related to employee salaries, travel
expenses, reimbursements, and gratuity or other deductions. It automates all lengthy manual tasks,
bringing about speed and efficiency to the payroll function.

 Supply Chain Management

One of the most popular ERP modules is supply chain management. It handles the flow of all items/raw
materials from the manufacturer to retailer and then the final customer. This is the reason that
enterprise resource planning systems are used by most stockists, distributors, retailers, and
manufacturers. The supply chain management module ensures that there is always adequate stock and
inventory so that no shortage arises due to which production may be halted.

Enterprise resource planning solutions also facilitate process automation. This streamlines all major
activities involved in the supply, inventory, transport, and distribution of materials or finished products.
Supply chain management module makes sure that the complete chain of tasks involved with delivering
a finished product is managed from beginning to end. It makes an organization proactive and responsive
to sudden market shifts.
  Purchasing
As the name suggests, the purchasing module manages all the tasks related to the procurement of raw
materials and items. Some main functionalities of the purchasing module include supplier-item linking,
sending quotation requests and tracking purchased items. It also enables managers to send or receive
quotations, prepare purchase orders and goods receipts notes (GRN’s).

The purchase module of ERP software works in integration with the inventory or the supply chain
module. It ensures that all data related to the movement and purchase of new materials are stored in a
unified manner. All the data is accessible to purchasing managers, and they can view various reports
based on the purchase requirements of the organization.

 Project Management
Managing projects of any scale are super simple for organizations nowadays especially if they have an
ERP solution. The project management module enables managers to track all activities related to
projects and ensures that they do not exceed the expected timeline. It monitors resource allocation and
adjusts the workflow pace for maximum productivity. ERP systems can actually track real-time costs as
the project moves along, and provides comparisons of future expected expenditures.

Timing and billing of project hours can be handled through time tracking function in the project
management module. This ensures that clients are billed the right amount, and are not overcharged for
project services. Easy access to information allows team members to view the project status, and take
corrective action if required. This makes sure that projects are delivered on time to keep clients satisfied
and build a good brand reputation.

ERP Industry Applications

Improsys offers the broadest range of ERP solutions, addressing all key business functions. Improsys's
ERP clients include organizations in a number of industry segments like

Engineering.
Manufacturing.
Automobile / Automotive.
Die Casting.
Plot Developers / Builders.
Construction.
Retail.
Food and Beverage
What are the potential issues with ERP software?
1. One-size-fits-all doesn’t cut it.
Plug-and-play, off-the-shelf ERP solutions work well with small businesses with straightforward
processes. But for large corporations with subsidiaries in different places, a uniform system quickly runs
into bumps in a diverse environment. Variations in factors like culture, policies and regulations make it
difficult to implement an overarching infrastructure. The result is either the ERP suffers low user
adoption or an expensive system is left in an abandoned company warehouse.

Many large enterprises today are trying a two-tier ERP approach to address their organizational
complexities. A corporate ERP is used by headquarters, while another ERP system is used by the
subsidiaries.

2. Unsupported applications.
If your business is using dozens of productivity apps, introducing a plug-and-play ERP won’t be that
smooth. The more existing applications you have in place, the narrower your options to find a fully
integrated quick-install ERP solution.

Unless you plan to discard existing applications, you need to assess ERP integration for each of these
apps. It’s time-consuming and, even if you’re lucky, you’ll find the best ERP falling one or two apps short
in compatibility space. In such case, getting an ERP with an open API ensures your developer can tweak
the system to integrate your current apps.

3. Security risks.
ERP aspires to cover the whole nine yards of operational and financial tasks. This overarching
infrastructure, in fact, lends to ERP its strengths: shared files, integrated and automated processes,
central database and a collaborative platform. They drive efficiency and lower costs.

However, the same single architecture is its source of weakness. the classic all-eggs-in-one-basket risk.
The wider the scope of ERP, the more access points it has. This means there are more chances of
internal data breach. Although firewalls and encryption mitigate this risk, the fact is all your data is
attached to this system superhighway.

Poorly designed ERPs heighten even more the security risk. Incompatible applications can lead to
crashes. Limited reporting tools force users to import external files, leading to a firewall break.
Moreover, a disgruntled tech employee can wreak large-scale havoc. Delayed updates or old system
version also exposes all your data to hacks.

The good news is, ERP vendors are fully capable of putting up security checks and controls. After all, any
breach is a death kiss to their business.
4. Lack of compliance.
Most ERP solutions are designed for financial compliance, so the problem is less of a technical
shortcoming and more of how the ERP is implemented. When an accountant is not part of the ERP
project, it’s easy to gloss over financial compliance. The CEO or CIO is focused on streamlining processes
to drive efficiency.

Without the auditing and regulatory knowledge of a CPA, financial regulations can easily be
overstepped, including GAAP requirements and Sarbanes-Oxley Act (SOX) protocols for US-based public
companies.

The issue can easily be addressed by including a certified accountant in your ERP project team. She can
verify if the configuration, controls and processes are compliant and recommend audit controls, where
necessary.

As the product of an industry leader, SAP ERP offers features that are continuously being improved to
eliminate the abovementioned risks.
What are examples of ERP software?
To help you get a better idea of what a good ERP tool is, we have listed down some of the leading
software solutions on the market along with a short description of what they can do. These platforms
are known for their fully integrated interfaces, comprehensive feature sets, scalability, and easily
configurable systems, so you can be sure that these are truly the best of the best when it comes to ERP
software. Of course, these are not the only platforms that you can consider.

1. NetSuite ERP
A fully integrated ERP targeted built for fast-growing companies, NetSuite ERP offers a scalable
interface equipped with everything you need from financial management and inventory
management to payment processing and vendor management. It is capable of automating a
wide range of front- and back-office processes so that streamlining operations is much more
simple. Moreover, it gives users robust reporting tools that offer actionable insights on your
performance.

2. Sage Intacct
Another popular cloud accounting solution is Sage Intacct. Created for small and medium
businesses, this platform features ERP capabilities via integration, such as, financial
management, wholesale distribution, and retail management. In addition, it also comes with
workflow management options that let you perform bank reconciliation, automated journal
entries, and trial balance. What’s more, is that Sage Intacct comes with a no-fuss interface that
both novice and professional users can get the hang of in little to no time.

3. SYSPRO
Designed specifically for companies in the manufacturing industry, SYSPRO has been providing
ERP solutions to companies for over 40 years. It comes with robust tools for accounting,
document planning, work order management, project management, as well as inventory control
so that it is easier to keep all the data in one place and manage all processes from one platform.
It is also known for its use of BOT agents that are in charge of automating redundant processes
and giving you fast support for all aspects of your operations.
 4. Odoo
Among our examples of ERP software, Odoo is unique because of its open-sourced, modular
architecture. It provides you with best-in-class sales and project management functionalities to
start and as your business grows, you can choose to extend the platform’s capabilities by
choosing from their extensive selection of applications. They offer a variety of applications for
MRP, POS, accounting, e-commerce and other business processes. Moreover, the system is
capable of seamlessly integrating with third-party applications so you can use your existing
systems.

5. Oracle ERP Cloud

An end-to-end business management platform, Oracle ERP Cloud provides users with an
integrated system for large businesses ranging from telecommunication and sales firms to
pharmaceutical and manufacturing companies. It comes with financial planning features, risk
management tools, project execution capabilities, as well as compliance monitoring options. In
addition, Oracle ERP Cloud also offers users a performance management module to help you
gauge productivity within your enterprise and pinpoint how to improve overall operations.

What are the latest ERP trends?

The hype around Internet-of-Things and artificial intelligence notwithstanding, ERP trends revolve
around predictable tech developments. This niche is playing catch up to other SaaS solutions, possibly
due to the more complex setup of ERP. Here, we have a compiled a list of trends that are gaining
traction among ERP vendors, both legacy and startups:

1. SaaS and On-Premise Hybrid

ERP, because of its complexity, has a lot of grey shades in between SaaS and on-premise. There
are companies that prefer a hybrid approach, integrating cloud inventory management into
their on-premise accounting-centric ERP or a cloud payroll into a local HR-focused ERP. From a
cost and process perspective, this strategy makes sense, driving vendors both legacy and
startups to offer hybrid ERP. For example, Oracle isn’t replacing its on-premise licensing, but co-
opting it with cloud solutions. Similarly, Salesforce, a pioneer enterprise cloud platform, offers
integration with legacy on-premise solutions like SAP and Siebel.
 2. Two-tier ERP
Large multinational companies are favoring a two-tier ERP approach. In this setup, two ERP
systems are in place, tier 1 at the corporate level and tier 2 at the subsidiary level. This strategy
is borne out of the limitations realized by big corporations in building an overarching ERP system
across a multi-country organization replete with stark regulatory, cultural, geopolitical and
market differences.

3. Social ERP
Billed as ERP 2.0, social ERP adds social media data like Twitter and Facebook profiles and posts
into the system. The integration is mainly a CRM initiative as businesses leverage online
customer engagement, brand mentions, public data, friend network, and likes and shares to
gain tacit customer knowledge. A SYSPRO study pointed out how social ERP can increase
customer engagement and, eventually, improve conversion rates.

4. Mobile ERP
Some ERP solutions now offer native apps for iOS, Android, and Windows. Most of these,
however, are pared-down versions featuring only the most important KPIs like sales, leads, and
web traffic. Still, this means you can remain connected and productive outside of the office. But
mobile access can be a double-edged sword. Security risk is heightened when sensitive data is
accessed anywhere and via a device not issued by the company. A good mobile ERP allows a
separate user permission to help you manage who can access company data on their phones.

Conclusion
Enterprise resource planning software can make a business more efficient than ever by managing a wide
range of business functions. It is a highly cross-functional solution that has impressive and innovative
modules. Each module is tailor-made for a specific business function. The various ERP system modules
help organizational departments undertake their respective tasks and maintain smooth collaboration in
all processes.

There are many vendors in the market who are providing cloud-based ERP platforms. Most service
providers customize personalized packages for organizations that suit their business needs. The best
aspect about enterprise resource planning software is that it is scalable, hence it can easily expand and
grow to accommodate organizational requirements. Installing an ERP system is simple and quick – it
hardly takes any time and does not have any complex hardware requirements. ERP tools are very user-
friendly and have navigable dashboards that display all important real-time information. They do not
require any technical know-how, and employees across the organization generally easily adapt to this
intuitive solution.
Enterprise resource planning software acts as a single unified platform despite having a wide array of
ERP system modules. It is a novel unique solution that has a centralized database that remains
accessible to all departments for better task efficiency and collaboration. It facilitates seamless
management of large volumes of data by enhancing visibility, ultimately leading to better decision
making. ERP tools can handle production, inventory, invoices, shipments, marketing and accounting
functions in organizations. They save a tremendous amount of time, money and effort by automating
routine tasks.

Enterprise resource planning tools are the future of technology. Investing in a world-class ERP software
is a sure shot way to gain a strong competitive edge and increase all your bottom line results instantly.