“Always plan ahead. It wasn’t raining when Noah built the ark.” – Richard Cushing
It goes without saying that planning is an important aspect of any enterprise. More than anything, it is an integrative approach, which when combined with other resources can help achieve optimum output. And when planning is accompanied by technology, you can be sure to get the best results. With this principal, ERP i.e. Enterprise Resource Planning softwares are increasingly in demand today. This software platform was traditionally used by huge enterprises and tech giants. However now, every enterprise, irrespective of its size finds the need to implement it for their business. If you are a business that is looking to find a suitable ERP for your enterprise, you are on the right page.
To help you better understand what exactly ERP is, what are its features, who & how it can be utilized, what are its benefits & costs, etc. We are going to go deep so that you will know what to look forward to and how to make your final ERP selection. So, let’s get started.
What is ERP software?
Enterprise Resource Planning softwares or ERP systems are software platforms that manage the various resources within an enterprise. It is a management system that enables enterprises to integrate, align, organize, manage and also automate the various business processes of their workflow. Thus, this integrated system compiles and manages various business processes including the Business Intelligence, Manufacturing, Accounting, eCommerce, Marketing Automation, Customer Relationship Management, Supply Chain, etc.
The concept is simple – to integrate the various functions and cover the complete base in a single place so as to improve the efficiency of the enterprise. This system/software thus comes with various complementary and interconnected modules/features that enables performance of the above mentioned functions and more.
Next, we’ll take a look at the modules & features of ERP systems in detail.
What are the core features of ERP software?
As mentioned earlier, an ERP System consists of various modules that addresses various aspects of the entire business process. The various features or modules of the ERP System includes –
- Procurement & Inventory Management
- Product Manufacturing
- Product Lifecycle Management
- Order and Warehouse Management
- Supply Chain Management
- Sales & Marketing
- Accounting & Financial Management
- Payroll Management
- Curtomer Relationship Management
- Reporting & Analytics
- Asset Management
- Risk Management
- Business Intelligence
Thus, an Enterprise Resource Planning System has the above mentioned core features and capabilities. It can hence help businesses to manage the complete product procurement, planning, development, and manufacturing processes. Also, it can integrate and keep track of the complete inventory, orders, warehouse, and supply chain. All the financial and account management processes including purchase orders, invoices, accounting, hiring & payrolls of the human resources, etc. along with all the tangible assets of the company are managed. Also, with technological advancement in artificial and business intelligence, it is able to collect, analyze, and manage data and also integrate it with other processes.
All these are the various features/modules/capabilities/functionalities of the ERP. Understand that not all companies will require all these features. And hence various ERP Systems come with varying features. Many of them are even overlapping and businesses can hence choose ERP System based on their need, budget, etc. Various vendors even provide customized ERP to suit the requirements of the clients. Speaking of clients, who exactly are the clients that demand for ERP?
Who uses ERP systems?
Well, this one is rather easy. If you are an enterprise – no matter be it a large enterprise, mid-sized enterprise, or a small enterprise – you’ll be making use of Enterprise Resource Planning systems. If you are looking for tools to integrate various business processes/functions and optimize the overall workflow and gain benefits, ERP systems are for you. So, if you are simply a small startup, you can still use ERP. Gone are the days when only tech giants used ERPs.
When we say that even small enterprises need ERP, there is one factor which is important and comes to the fore front – the cost of ERPs. Every enterprise will not only have a different set of requirements from ERP Softwares, but also have a different budget set for it.
How much does ERP software cost?
When it comes to the cost of an ERP software, you cannot only look at the price of the ERP System. You’ll also have to consider the cost of the various in-house costs for its IT & resources and also the support & maintenance cost that will be incurred.
There are a variety of ERP products available in a variety of categories. Due to this, the price of ERP Software has a wide range. Also, there are different types of ERP, and the costs vary accordingly. Thus, the SaaS ERP or the cloud-based ERP’s cost will vary from the traditional ERP Systems. Do note that cloud-based ERPs are more budget friendly and come as a good option for small businesses. Also, there are some ERP products which are available free of cost (but with limited features). For extra features, you’ll require to pay a subscription amount. Other than that, you may choose directly to get a perpetual license or you can go for a monthly subscription. When compared to a perpetual license, the subscription fees will cost about 20-30% of the licensing fee. Also, you’ll have to incur the maintenance and support cost which will further be around 10-20% of the licensing fee.
These all factors will determine the ultimate cost of the ERP system. If you are a small business, I suggest you optfor free & low-cost options available. And if need be, then you can always subscribe for a paid plan. Dolibarr ERP, MixERP, ERPNext, iDempiere, etc. are a few example of free ERP tools. Moany of them come with paid versions too. As mentioned earlier, the cost of the ERP will vary based on various factors – one of which is the type of ERP system. So, what are the various types of ERP? Let’s get into the details.
What are the different types of ERP?
* General ERP Systems: General ERP Systems are generalist platforms that work well for businesses who need a generalized approach. Thus, types of ERP Systems are not developed for a specific purpose or industry and are suitable for businesses belonging to all the niches. They will have a large number of features and modules, and thus will be bigger. They can be a good starting point, especially if you have in-house experts who can then customize the ERP System according to your need.
* Industry Specific ERP Systems: Industry Specific ERP Systems are those ERP Platforms that, unlike the generalized ones, are tailored specifically to suit the needs of a particular industry niche. They are also referred to as vertical ERPs. Thus, they will not include all the features/modules, making them comparatively smaller in size. The features included will be industry specific. If you don’t have an in-house expert or any coding knowledge to customize a General ERP System, Industry Specific ERP Systems will be your answer. However, do note that they are costlier in comparison
* Small Businesses ERP Systems: As the name suggests, these ERP Systems are developed specifically for smaller businesses. It goes without saying that small businesses, unlike large corporations will require ERPs for performing fewer functions. Thus ERP Systems for small businesses are limited platforms with limited features, and can fulfil limited needs. Reducing the features that are not required for small sized businesses, makes these ERP Systems a lot affordable. These are the best options for Small scale businesses due to their efficiency and cost effectiveness.
These are the various types of ERP Systems. Understanding these types, will make it easier for you to make your final choice of the ERP that you want for your business. Hope this makes it clear to you the basics about ERP Systems. However, if you are still confused and wondering whether you really need to invest in ERPs; you need to take a look at all the benefits they hold.
Benefits of ERP Software:
An ERP Software, as we have already discussed, is a tool that enables a user company to centralize its database information, automate its everyday tasks, and makes their complete process more simplified. Following are the various advantages associated with ERP Systems, that make them a must have for businesses –
* Reduced overall IT Costs: While it is true that ERP System/Software can be a large investment, it can still be rather cost effective. This is because, this single system is able to perform various functionalities and thus, instead of separately spending on various systems, you need to incur a singular, centralized IT cost. This will ultimately reduce our overall IT Costs.
* Reduces training requirements: As we said, ERP has various functionalities and it centralizes numerous systems. Hence, end-users will require training to use the ERP System only. The training for other systems will become redundant and thus will reduce training requirements, and costs too.
* Improves employee efficiency: ERP enables automation of routine tasks. Thus, the every-day tasks of employees are reduced. They can then focus more on other intuitive tasks that require more of their attention and improve their efficiency and performance.
* Better security: ERP System not only provides you streamlined data, but also enables data security. While you get centralized access to the data, to whom the data will be visible, and who can edit the data is controlled. Streamlining of various systems has chances of arising conflicts between the sources. However, ERP comes with a single repository i.e. you have a single input system and hence data security can be rather easily maintained. Not only that, you can get centralized backup of the sensitive and important data. When it comes to cloud-based ERP Systems, it can give companies more protected services, thereby ensuring security.
* Modular flexibility: ERPs have various modules/features many ERPs let you choose the modules that align with your requirements. Thus, ERP vendors offer ERPs with several applications/features that you can select from and use as stand alone or integrate together to form a large suite. You can work with the components that coincide with your needs, and remove those components that you don’t require.
* Third Party integration: Not only do ERPs let you align the functionalities based on your needs, but there are also some ERPs that also allow for third party integrations. Thus, you can integrate one or more third-party systems with it to create a wholesome and unified system that enables centralizing all the functionalities.
* Centralized data availability & access: This is one of the greatest advantages of ERPs. An ERP software can provide you all the data from every department at a unified place. Thus you can easily track all the interdepartmental processes to get the complete picture. It makes the complete workflow of your company more coherent and can thus help you to efficiently manage it.
* Increases reporting & planning efficiency: With centralized access to all the data of all the departments, you get better insights. Thus, ERP enables your organization to have a unified and single reporting system including each and every process within it. There won’t be numerous diversified reports – each requiring to be tallied with each other. Instead, you’ll have one single report, one single truth, and you’ll be saved from the hassles of multiple reporting, emailing, spreadsheets, etc. This will ultimately help in efficient planning for the company’s work process.
* Improves customer service quality: ERP enables streamlining of your customer data so that your sales and marketing team will have all the centralized information. Thus, you end-to-end tracking of customers is possible, which helps in customer acquisition. Also, you can improve on customer relationships and thus improve your customer retention rate too. You can better understand your customer, their need & behaviour & preferences and thus customer interaction will improve. Ultimately, your customer service will improve in quality.
These are some of the benefits associated with ERP. Now that you understand what ERP is, what are its core features, its costs, its benefits, etc. you surely are looking forward to getting one for your businesses. As an experienced and expert ERP software development company, to help you further, we have prepared our list of Top ERP Systems in 2021. Take a look and make your choice.
List of Top Enterprise Resource Planning (ERP) Systems 2021:
* Oracle: Oracle Netsuite and Oracle ERP Cloud are two featured Oracle systems. Oracle is a cloud-based ERP solution that can be used by business and industries of all sizes, but best suitable for small & medium-sized businesses i.e. SMBs. It is compatible with Windows, Mac, Android, iOS, and web-based platforms. Oracle Netsuite comprises 5 suites including ERP. It is an easy to customize and highly scalable solution that comes with built-in business intelligence.
* SAP: SAP offers products including SAP ERP and SAP S/4HANA. SAP is a flexibly deployed ERP solution that dominates the ERP market share. It is AI, advanced analytics and Machine Learning embedded ERP that is able to provide streamlined data display, real-time analytics, and faster reporting. SAP vendors also provide solutions that are specifically built according to the organization. This ERP is suitable for mid to large size businesses.
* Microsoft: Microsoft has developed Microsoft Dynamics 365 as an ERP and CRM Solutions. It’s winning feature is that it is able to provide a wide range of pre-configured processes/modules such as finance, sales & marketing, operations, field service,supply chain management, etc. It makes use of AI, Machine Learning and other tools to help businesses improve operations, find and manage leads, and boost sales.
* Epicor: Epicor ERP is best suited for all size manufacturers, service providers, wholesalers, distributors, retailers, etc. as it provides ERP as well as Retail solutions. Look & feel wise it is quite similar to Windows and can be deployed on-premise or in cloud. It enables integration so as to manage customer relations, eCommerce and Point of Sale (POS).
* Odoo: Odoo is an open-source CRM and ERP software suitable for business of all sizes. It can be deployed on-premises or through the cloud. This software can be used for free initially, and later on you can avail various apps such as Sales, CRM, Invoicing, etc. with minimum pricing per month. You can also avail extra integrations for more prices.
* Sage ERP: Sage is a cloud-based ERP best suited for SMBs. Its core functionalities are Accounting and finance. Other additional functionalities including purchasing modules, order management, inventory management, time & expense management, etc.that help to improve business productivity.
* Acumatica: Acumatica is a cloud-based ERP best suited for SMBs and comes with flexible deployment so that you can change to on-premises too. Its functionalities include Accounting, Financials, Reporting, CRM, and Business Intelligence. Acumatica has licensing plans that are flexible that lets you add users without having to buy more licenses. Thus, you only pay for the resources and not the users.
These are some of the top ERPs that you can consider for your selection. While selecting, remember to consider various factors such as the functionalities of the ERP, its cost, its deployment method, and how well can it be utilized by non-IT users, etc.