ERP, or enterprise resource planning, is a special software solution that enables your essential business processes to be managed and integrated in one centralized system. Such processes include finances, supply chains, human resources and manufacturing. ERP systems are like a treasure not only for large companies, but also for a lot of startups . And that is due to its easy implementation of such solutions, as well as the vast variety of ERP consulting, development and software services and apps available for the most prominent companies.
But now you may ask: why should we consider the implementation of enterprise resource planning specifically for our business? Well, what if we tell you that there is an untapped potential in the enterprise planning resources systems that you surely missed? In this article, we will dive into the realm of ERP to reveal the benefits of such systems, its variations to match exactly your business and the methods of successful implementation.
Historical Background
Some of you will be surprised by the fact that such systems had already appeared in the 1960s. One of the most effective one’s was MRP (material requirements planning) developed by Joseph Orlicky. The main tasks of such a solution were to arrange and distribute raw and working materials. And even despite its hard-wielding features and the slow pace of data processing, this version was actively used by companies until the release of MRP II in 1983. A new generation of software has made it possible to expand the list of tasks performed. MRP has acquired a modular character, which made it possible to include tasks such as specification, procurement, contract management and costs planning. At its core, MRP can be considered the grandfather of the modern ERP system.
How it’s made?
ERP systems offer companies powerful tools to achieve their goals quickly, efficiently, and reliably. But what specific tasks can these solutions handle, and how do they work their magic? Let’s explore.
Types of ERP systems (and their main strengths)
First things first – different companies require completely different ERP solutions. There are three different types of enterprise resource planning systems, and we will underline the most prominent one’s.
- On-premise ERP software is the solution that is implemented on site within the organization, which is its main characteristic. The organization that implements the ERP system has control over the functioning of the software through their own computers and servers. This type of ERP provides a high level of control over all the happening processes, security, and also eases regulatory burden. The solution also integrates perfectly with existing systems, and also allows such luxury as functioning without the Internet. This can also be an ultimate decision to implement on-premise ERP for startup companies, because in the short term it will turn out to be the cheapest ERP system.
- Cloud-based ERP software is a system, also known as Software as a Service (SaaS), where all data is stored and processed using a web-based platform, to which organizations can connect from any device with an Internet connection. Cloud-based ERP is distinguished by its flexibility and convenience in many aspects. These include a simplified process of software implementation in production (almost 24 hours and you are ready to go). This ERP also stands out for its user-friendly design and functionality, because the provider will take care of all the technical support, hosting and keeping the software up to date. As a result, employees will quickly adopt the new ERP solution in no time and the software provider will give the company a peace of mind. However, migrating existing company information and integrating the ERP system with other software like CRM, HR, and accounting tools requires significant effort. Therefore, it’s crucial to rely on software development expertise, whether from an in-house team or through outsourcing, to maintain and update the ERP system effectively.
- Custom ERP is pretty much a combination of all the features mentioned above. But users will have an opportunity to add even more of them to their personal ERP system. Or, if there are features they are unlikely to use, they can simply remove them. This type of enterprise resource planning is all about adaption. Companies can build their own solution for business just from scratch to exactly meet the requirements. Developing such software may gain some unique businesses a competitive advantage, because such extraordinary plans require extraordinary solutions. And if the strategy changes, owners can easily change and update the ERP system, thus perfecting it.
- Open source ERP is primarily a web application known for its remarkable flexibility. This solution enables business owners to customize it according to their specific needs. Still, implementing and adapting the solution to perfectly align with your current requirements can be time-consuming and requires a trained IT staff. It’s worth noting that the number of available enterprise resource planning systems is increasing. Therefore, if you have the budget and skilled individuals, opting for an Open Source ERP can be a favorable decision.
ERP Implementation step by step
The process of creating and implementing ERP systems can be time-consuming. Nevertheless, based on the experiences of numerous large companies, the adoption of enterprise resource planning solutions is undoubtedly worthwhile. To effectively address the unique demands of your business, many companies opt for custom ERP systems due to their flexibility and adaptability over time. In this guide, we will present a step-by-step approach to successfully and efficiently launch your own ERP system.
Step 1 – Track the exact match and create a plan
Your first step will be to find the most suitable solution for you. To do this, we recommend you to gather a team to effectively distribute roles for the implementation of your ERP. The following roles should be considered: project manager, executive sponsor, senior staff, and IT consultant (if required). One of the main workflows at this stage is the development of requirements related to the ERP, the current budget, and the analysis of implementation options. In most cases, the work during the initial stage of introducing an ERP system goes quite smoothly. However, those companies with prior experience in handling and implementing enterprise resource planning systems will pass this phase a little bit faster.
Step 2 – Observe and design
The next step is designing your ERP system. To ensure an effective design for your solution, it is beneficial for ERP developers to consider the strengths of the enterprise resource planning type you are going to use, as well as involving direct users. Additionally, having a back-up UX designer, as well as solution architect will definitely play in your favor. Setting out this strategy will help to identify shortcomings of the chosen variant of ERP solution at an early stage, as well as introduce new workflows that will be much more comfortable to work with.
Step 3 – Developing and testing
And now, the process of creation itself begins. With all the requirements, strengths and shortcomings taken into consideration, your developers team can finally begin to build your very own ERP system. Different solution’s options you have chosen will require different approaches for its further development. For instance, in the case of on-premise enterprise resource planning, an additional software for data transfer will be needed, while with cloud-based it will be sufficient to configure the available information for successful transfer. It is also worth testing the solution at this stage of development. This will help to identify the maximum performance of ERP software, some possible gaps and also check for the correctly transferred information.
Step 4 – It’s alive! Keep it that way
The last step to the final implementation of your custom ERP technology in your business. This can also be called a control test. At this stage, the operability is checked in the ERP system, as well as feedback from users is given for further steps to keep your fresh solution in shape. Your most important task in this phase will be identifying all the shortcomings, delivering feedback and maintaining communication with the developer of the solution for further updates. Gladly, when you choose cloud-based ERP, your developer will automatically keep your system up to date.
Factors to consider when searching for erp developers
For your wishes to come true, you will need a reliable team to realize your solution. There are many options and each ERP developer offers unique solutions for a variety of businesses. Only those who have already dealt with ERP systems can easily choose developers for their software. Therefore, we present to you some factors that you should pay attention to when choosing a developer and team:
- They clearly understand what you want. One of the most important factors when considering developer options for your solution. For such a close understanding, you should clearly and neatly determine what your business needs. It is also worth considering your demands from both a short-term and a long-term point of view.
- They have a relevant knowledge of data transferring. Despite the principle of operation of ERP systems on a common platform, it is necessary to consider firstly such developers who have good experience in data integration.
- They have feedback from other clients. And how are things going with other clients of this company? Are they satisfied with their user experience and do they have any problems when cooperating with their ERP developers? These are the questions you should ask yourself to find the suitable one.
- They communicate in a cutting-edge way. It is very important to keep in touch at all stages of development of your ERP system. Having an understanding of not only the software aspects but also the business workflows will help developers understand your needs much better.
Wrapping Up
Not everyone will be able to curb complex technologies like ERP systems. However, when entrusted to capable hands, these solutions can truly unleash their potential. Full automation of data acquiring and processing offers significant value to a wide range of companies. Moreover, businesses have the opportunity to create a completely unique system tailored to their unique needs. It is the true experts in the field who will help to bring both their own and your aspirations to life.