What is an ERP and what are some features you expect to find from an ERP?
Firstly what is an ERP? Well the fancy name is Enterprise Resource Planning system. In today’s simple terms it is a single system that binds different departmental units together as one. Traditionally an ERP is used by large scale businesses however in the age of the cloud I have seen business with as little as 1 employee with a cloud based ERP system in use. When looking at the industries we have seen all types of industries utilizing the system from manufacturing, import and distribution, gift and home-wear right through to service based industries.
The idea behind ERP software is to “Build a system to run business not a department”
What type of companies provide ERPs? At the large end of the scale the typical ERP providers have been IBM, Oracle, SAP, JD Edwards who have been working with joining large corporate operations together. In today’s environment we also have providers who offer cloud based ERP solutions. One of our key findings with large systems was costly integration and maintenance with big companies taking too long to make small changes. This week we visited Netsuite to learn more about Netsuite’s offering. Did you know that Netsuite was one of the first cloud companies dating back to 1998! Watch Netsuite in the ERP space very cutting edge technology.
Features you could expect to find in a fully comprehensive ERP solution include:
Inventory: The ability to see and control your inventory levels across the business. This could be stock available, stock in store even stock that needs to be forecast for particular seasonality. Automated Purchasing and supply level indicators are also helpful with the business inventory systems.
Customer detail management: Knowing as much about your customers is critical. A good ERP will easily be able to handle your customers particulars from past order history, address right through to birthday and buying patterns. Smart ERP systems have the ability to integrate loyalty based applications to help companies leverage additional revenue opportunity.
Single back end: We still see customers with fragmented back ends where the data is housed on separate systems and is too hard to integrate. Having a single platform binds the business together and makes it easier to streamline the operation.
Mobile connectivity and responsive: Today we are very mobile, not just on our telephones our tablet gadgets and other devices are an essential part of our lives. When I look around our boardroom everyone is anxiously waiting to jump back on their devices to stay connected. Drives me nuts however this is now part of day to day life.
Multiple front ends: With multiple different ways to sell items these days from your website, from sales reps, Amazon, eBay and other marketplaces an important tool to help retailers manage multiple sales and front ends with a single data source is a key element for success.
Quality Control & Costing: In fast paced organisations stock movement takes place rapidly. When there are quality checks in place a good ERP system in place will help business to ensure the correct return, refund and feedback mechanisms are neatly coupled into the main system. The tracking of damaged, returned or overstock items can be messy and sometimes overlooked if a system is not in place to transparently manage the process. Reconciliation and compliance is a key element of a well structured ERP.
Financial Statements with P&L: Your CFO or finance manage will definitively need access to a variety of performance measurement reports to assist with the financial management of the company. From departmental budgets, country budgets, and different entity based comparison and compliance reports. Having quick access to reporting is extremely beneficial to all areas of the business and stakeholders including shareholders. Both account payable and accounts receivable should be built into the planning. A general ledger is also expected in the reporting capabilities of a decent platform.
Multiple currency: Keeping up emerging markets and expanding into new territories is a key task of most business. Having the ability to scale into regions by having the correct currency attributes is a key feature of any ERP system.
Detailed Job Costing: When looking to implement an ERP do you need to consider Job costing? designed to accommodate the whole life cycle of a job or project from quote and budget through to profitability analysis and variance reporting.Production Scheduling of materials, tools & labor: Running a project and having the correct project details, events and time logs can be useful for many types of verticals. This also runs into activity such as project based management ( Time logging). In addition to production scheduling sales forecasting and seasonal planning can be part of your analytic system.
Shipping Logistics and Order fulfillment: Distribution is one of the final miles of contact between you and your customer or store. The ability to assign the correct product to the right carrier or service is essential. Some systems offer complimentary services such as cartonization and route assignment. Cartonization is the ability to bundle several products into a single box for distribution. Other systems have the ability to provide split shipment functionality. Shipping and receiving control must be an element to research in your planning stages.Estimating, Pricing & Quotes in proforma and invoicing: Simple quoting and invoicing tools are needed from within.
Supplier Database and management: Easy access to supplier details, events, trading terms are a key part of business. Some ERPs have the ability to rate, measure, control, contact and apply relevant notes. It is also key to have multiple contacts within your supplier database ranging from your account executive, accounts, and decision makers. It may even be useful to have suppliers delivery options loaded into your system with key contact information available. It is imperative to have a well organised contacts, calendar, tasks & events.
Payment Gateway and Payment solutions: there are hundreds of different payment gateways and providers around the globe. There are now even payment aggregaters providing invoicing solutions. Having the ability to pay by all types of payment methods from credit, cod, direct deposit and more. Payroll may be another extension added to the system. Bank reconciliation is also needed to keep track of accounts receivable and payable movements.
Real time POS integration or Point of sale connection: Providing visibility across storefronts and departments realtime transparency can be very useful for maintaining correct stock levels and control over the organisation.
Duties, tax and cross border compliance: Apart from the governments nobody likes tax ! In different countries tax rates, sales tax and other elements can be completely different. Having a module that can handle correct tax compliance and assists you with reporting the tax correctly can be a welcome relief.
Customer Relationship Management (CRM) A section of your business that can help you to manage your customer data. Salesforce is a good example of an enterprise CRM. Some ERP’s have CRM components or have the ability to hold an extension or integrate with the CRM system.
Tiered security access: The ability to provide role based login either providing more or less information based on the assignment. In many cases there is even a completely different view logic set up. Some systems even let the user customize the view settings by a drop and drag functionality.
Most successful ERP projects provide a single access point to capture the data. fully web-based you can access it from anywhere in the world all you need is an internet connection. You don’t need an expensive server or implementation project just use your favorite browser and device is available on both PC and Mac using Chrome, Firefox and Safari browsers). The other big advantage of having a cloud-based solution is that it allows you to grow as big and quickly as you’re able from a single user to large organizations with thousands of users. Good ERP solutions consolidate the view level and include tools to bind together logistics, fulfillment, accounting and financials, company payroll and accounting. A good system integrator will provide ERP solutions that address critical business processes and in turn streamline the business operations.
When sourcing an ERP solution for your business, be sure that the proposed solution delivers the functionality you need. Cutting back on features that pay off in future inefficiencies can limit you’re your companies flexibility. Further, existing processes must adapt to the new solution. helped many businesses, from small to enterprise, solve their inventory management problems, allowing businesses to focus on what they do best, stay in control of their inventory, and best of all the potential to save money. There is also a cost associated with employee inefficiencies. Employee efficiency can greatly increase the overall health of your company.
Organize your inventory: Without organized inventory management, did you know that you are paying your staff to dig through legacy style files, constantly sending spreadsheets to one another, run out to the dispatch section each time there is a question about what’s in store, or hand write reports on a daily basis. Instead of paying them for these manual silly tasks, you could eliminate the manual processes them by implementing a good cloud based inventory management system.
Make your staff happier: Your staff will be happy that they focus on more meaningful tasks as nobody likes to do repetitive unnecessary workloads, and you will be happy because everything you need to know about your business will be easily accessible via the cloud. Did you know that some businesses with multiple warehouses or distribution points suffer when their employees have to keep calling each other to find that one piece of stock, or to confirm that the item is really there. Accurate inventory management will eliminate any issues with inventory location, including being unable to track down that one item a customer wants. Inaccurate inventory management can lead to lost sales. There are plenty of ways things can go wrong, such as a staff member telling a customer an item is out of stock, only to discover it is in stock moments later. Or in other cases a customer is told to go to a different store that has the item when they do not, this increases the chance of abandonment.
— June 17, 2015