As required by the era of digitalization and automation, if companies want to succeed, regardless of their size, they should provide accurate planning and real-time control of processes and resources, which can hardly be completed without digital technologies. For this reason, companies develop and integrate special software solutions — ERP systems — that quickly perform these critical tasks and greatly improve business performance.
In this article, we will provide the ERP definition, explain what benefits it can bring to your business and how you can create such a solution.
What Are ERP Systems?
ERP stands for enterprise resource planning — the process of integration of various business parts in a single system and their efficient management. Specialized large-scale software designed for this process is called an ERP system.
In a report by Market Research Future on the global ERP software market, there is a prediction that the market will grow from $32 billion in 2017 to $49 billion in 2023, at a CAGR of 7%. North America is expected to dominate this segment.
The researchers also name the main drivers for the growth of this market:
- The desire of organizations to increase their processes transparency and operational efficiency
- The high adoption of the cloud-based deployment model
Typically, enterprise resource planning software has a modular architecture, meaning that workers can access only those modules of the system that concern their duties, while top management can both review data and make changes within the entire system. By keeping to a modular approach, companies enhance security and get more accurate data at all levels.
Does ERP include CRM? Yes, it does. Customer relationship management is one of the basic modules comprising the system, along with supply chain management, HR management, financial resource management, manufacturing resource planning modules.
This scheme is only a basic example, and for your business, you will probably add other modules.
ERP Software Functions
- Order processing
- Tracking of resources (workers, raw materials, cash)
- Control of production processes
- Financial management (payroll, purchasing, overhead)
- Data collection and analysis
- Making reports
ERP Software Benefits
How can ERP help a business? This question should come to the director of every company who decides whether to implement new software. Here are the key benefits of enterprise resource planning:
- Business processes automation due to the fact that all departments are interconnected and the information flows are seamlessly transmitted between them
- Improved internal communication
- Improved customer service due to automated order processing and a better understanding of customer needs
- Reduced time needed for the performance of this or that task
- Continuous analytics that simplifies decision-making, facilitate planning and optimization of resources
- A real-time picture of all of the company’s operations
ERP Software Drawbacks
Among a few drawbacks that come with the migration to enterprise resource planning are:
- The high cost of implementation and maintenance (the more modules are needed, the more expensive the system will be)
- A complicated integration process that requires a compatible business environment and full engagement of all the teams
Simply put, an ERP project is a significant investment of time and money, and if you manage it right, it’s worth it.
Industries That Need ERP Software
If you look at most industries, their general working processes are similar and connected with supply chain, customer relationships, internal communication, accounting and finance control, marketing and production. Consequently, any industry can be managed by a typical software solution with a portion of customization.
There are integrated enterprise resource planning applications available in the market for almost all kinds of industries. The most involved are:
- Retail and eCommerce
- Transportation and logistics
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Best ERP Applications
There are hundreds of ERP software providers available in the market, and you may get confused and lost in such a variety of offerings. Remember that it’s only the requirements and the needs of your company that should dictate the terms of choosing a solution. We’ve selected five good examples of enterprise resource planning systems JFYI.
1. Netsuite ERP
The high quality of this product and unconditional customer loyalty it receives are guaranteed at least by the fact that it’s from Oracle — one of the largest software makers in the world.
Cloud-based Netsuite handles the full range of office procedures, including order processing, inventory management, financial operations, etc. More than 40,000 companies globally from various industries prefer Netsuite.
This platform can perfectly handle manufacturing, distribution and logistics processes, as it was designed specifically for these industries. Comprehensive features and a range of robust tools places SYSPRO on a par with the leading ERP vendors.
Its efficient scheduling tools quickly create accurate production plans, which is extremely important for manufacturers, while built-in fraud detection and compliance tools protect sensitive information from internal and external threats.
Another significant feature of the platform is AI and machine learning integration for better analytics.
3. SAP ERP
This powerful platform comprises tools and solutions for practically all business processes. With SAP — a pioneer of enterprise resource planning systems — you get end-to-end support for all activities that your business is doing.
You can deploy an SAP suite either on-premises or in the cloud — both options are able to pay off.
4. Microsoft Dynamics GP
The platform from Microsoft is built on the principles of simplicity and functionality, that’s why its interface is easy to learn and use. Dynamics GP offers a wide range of customization options and sets a high level of security.
Quick configuration of the solution and easy migration of data from third-party sources are handled by the RapidStart Services feature. Moreover, MS Office apps and SQL databases serve as the basement for Dynamics GP, providing smart reporting and business intelligence features.
5. Oracle ERP Cloud
This is another comprehensive solution by Oracle. Its core strength is in robust financial functionalities which deliver advanced analytics and reporting. Companies that use these insightful analytics in addition to the Intelligent Procurement Cloud tool get a chance to efficiently control and reduce their expenses.
Businesses of all sizes can also benefit from scalability ensured by Oracle’s cloud deployment model. Moreover, using the Risk Management tool integrated with AI-powered algorithms, companies are able to take control of practically all risks.
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How to Create an ERP Application
Having come to a firm conclusion that your enterprise needs ERP software, you inevitably face a dilemma of how to acquire this software.
As you can see, the above-mentioned offerings are ready-made solutions that any company can purchase, customize and start using within its infrastructure. This option is, undoubtedly, a time-saver, which can be a significant benefit for many businesses. Another advantage is cost-effectiveness because the initial expenses of purchasing a ready product are lower than those of developing a product from scratch.
The biggest disadvantage of boxed apps is their inability to satisfy all the specific requirements and to seamlessly integrate with all the functionalities of the company. If this is critical for you, and none of the available solutions fully suits your business, think about creating your own system.
Custom ERP System Development
The process of developing your own enterprise resource planning system is rather complicated but worth it. You will get the core privilege — ideal compatibility with your company’s processes, which will definitely pay off.
We would like to provide a brief roadmap of how to build an in-house project.
1. Defining goals
The client should clearly understand what they want to get in the outcome and should explain this vision to the developers. At this stage, the client and the executor come to an agreement regarding the features and functions of the end product (while in development, some changes are certainly possible).
2. Blueprint creation
A blueprint is a document with detailed information regarding the project structure, its timeframes and needed resources. The document should be compiled by the development team, client’s representatives and even end-users working together.
At this stage, technical decisions should be made regarding:
- Hosting (local or cloud)
- Database (MySQL, Oracle SQL, PostgreSQL are the most popular)
- Tools and languages (Java, Python, .NET are highly used for ERP creation)
This is when the system is evolving. But it’s not the end.
You can’t do without the testing stage, as it’s critical to check the system’s compliance with the initial requirements and its correct functioning before the full launch.
The quality assurance process may include functional, performance, integration and security testing.
5. Timeframe and costs
We always highlight that precise figures regarding time and cost of development can be provided only when the project is done and only to the involved parties.
That’s why in the blog post, we speak about average data without specifications, just to give you an idea.
Well, it may take:
- For a small business — 3 months and $25-50K
- For a medium business — 6-9 months and $50-100K
- For a large-scale business — 1+ year and $300-500K
SaM Solutions and ERP
The essence of enterprise resource planning systems is in breaking barriers between company departments for more efficient performance. This philosophy is actively adopted by organizations, so we can find this type of software practically in any industry.
SaM Solutions’ experience includes a range of projects for which our developers worked with ERP systems:
- Our team created a website for a new hotel in Europe belonging to a large international hotel chain and integrated the admin part with the hotel ERP system.
- Another project encompassed the development of a web app based on Microsoft .NET technologies and a mobile application for iPad. The integration with the client’s external systems, including ERP, was performed.
- SaM Solutions’ experts developed a highly customizable online shop for a hardware reseller that was integrated with MS Navision ERP.
Contact us to learn how an ERP system can become a source of competitive advantage for your business. We are looking forward to new challenges!