Business owners and executives are becoming increasingly aware of the need to manage core business processes within a centralized and integrated system.
It’s evident in the staggering amount of annual business spend on Enterprise Resource Planning solutions.
In 2020, the estimated value of the global ERP software market was about $94.7 billion(1), up from $94.1 billion in 2019. App Runs The World estimates that this value will reach $95.4 billion in 2021, representing a 0.7 percent YoY growth rate.
The need for operational efficiency, transparency, and data-driven decision-making drives the demand for ERP software. Aberdeen Group found that 96 percent (2) of emerging businesses that excel in their respective industry implemented one.
This guide x-rays what an ERP is, the benefits to businesses, how to successfully implement one, and much more.
Come along, let’s explore them.
What is Enterprise Resource Planning?
Enterprise resource planning is a process whereby companies manage an integrated suite of core business processes like finance, personnel, production, e.t.c. It allows them to integrate the critical parts of their businesses into a single system.
Aside from the need for operational efficiency, companies are also facing an increasing need to merge data from different sources, easily share information, and work with the same information.
ERP solutions make these possible.
It integrates and automates all the inter and intra-departmental processes needed to run a business, making collaboration and productive use of resources seamless.
Wondering what makes a great ERP system? Let’s find out.
Features of an Enterprise Resource Planning System
An ERP is valuable to businesses but could be disastrous if deployed wrongly.
A typical system should be able to streamline business processes, unify data in a centralized database, generate insightful reports and, of course, do more.
Here, we’ll be looking at the major features to expect when buying an ERP application. Always check with the vendor to ensure their solution includes some of these modules.
Let’s get to it.
Human Resource Management
This module helps companies to streamline HR processes.
It connects employees’ information and records to all the ERP systems to give companies valuable insights into how personnel contributes to the bottom line.
The module also enables the HR department to manage payrolls, performance, hiring, and succession from one place without additional HR software.
This module makes accounting and financial management seamless.
It syncs with all the connected modules in the ERP to aggregate financial records to give companies a complete picture of their financial standing and forecasts potential revenue growth.
The module also automates invoicing, syncs with the HR module to manage employees’ payroll.
Tracking inventory with a pen, paper, and spreadsheets could be seriously damaging, especially to a company with large stocks.
ERP inventory module can automate warehouse and stockroom inventory management. The tool tracks orders to predict when an item will be out of stock and automatically reorder.
It also helps ensure accurate order fulfillment, improve efficiency and product flow.
Many businesses could attribute their successes to their ability to provide excellent customer experiences.
Integrating a customer relationship module into an ERP could help businesses manage and streamline sales-critical functions and provide immersive experiences to customers.
It’s also capable of collecting and storing important customer information and making them available to those that need them.
Collaboration and the ability to easily share information across teams are among the strong points of an ERP.
Most ERP systems come with instant messaging to support real-time communication. The tool also offers some action-based automated messaging. For instance, it could send order details to Inventory when a customer checks out online, notifies the sales team, and communicates with other relevant stakeholders.
The module also supports team-level and company-wide broadcasts.
Reporting and Analytics
The reporting dashboard allows individuals, teams, and companies to gain data-driven insights into their processes and performance. Most of the reports are available in real-time, giving them insights as they happen.
It also allows people to generate reports based on different parameters, visualize data, and benchmark performances.
The analytics tool integrates with the ERP system providing users with business intelligence, predictive analysis, data-mining, and other relevant analysis.
Outside of these core features, businesses can also request industry-specific modules. Some examples include:
- Task scheduling module for managing shifts
- eCommerce modules for online retail businesses
- Content management modules for publishing businesses
- Manufacturing modules
An Enterprise Resourcing Planning is a complex framework to deploy, and it comes at a high cost too. But its benefits are far more rewarding.
The Benefits of ERP Solutions
Siloing data is one of the common practices among businesses without an ERP solution.
This situation occurs when a department holds data, and it’s not quickly or thoroughly accessible by other departments. This practice is terrible because there are situations where a department could use the other’s data to solve an issue more efficiently.
Deploying ERP eliminates these bottlenecks, making businesses easily share data, work with the same information and save time on data entry. ERP also helps businesses entrench operational efficiency, promote transparency and improve their processes.
ERP helps businesses prepare for the future, retain a competitive edge, and meet customer demands. Here are some of its other benefits:
- It provides real-time reporting and performance appraisal of core business processes.
- ERP helps businesses save money in the long run by cutting operational costs and streamlining processes.
- ERP systems come with analytics and business intelligence capabilities that enable businesses to forecast and make informed data-driven decisions.
- Businesses can leverage its predictive capabilities to visualize data, forecast business trajectories and trends, and make decisions that’ll help them stay on course and beat the competition.
- Cloud-based ERP solutions come with collaboration functionalities that allow team members to work remotely, assign and complete tasks from anywhere.
- Enterprise Resource Planning solutions are scalable and highly customizable, making them adaptable as the business grows.
- ERP systems deliver a full suite of applications in a centralized interface so that businesses can eliminate costly integrations.
- By streamlining processes, ERP deployment frees up the time and resources needed to accelerate growth and drive innovation.
Examples of Successful ERP Implementation Use Cases
Some years back, business executives see enterprise resource planning software as a solution for just multinationals. But today, it’s becoming vital for both growing and large companies.
Here, we’ll look at some cases of successful ERP implementation.
Walmart is a multinational retail corporation operating chains of hypermarkets, discount department stores, and grocery stores. It’s one of the top ten most prominent companies in the U.S. by market capitalization and has an annual sales turnover of about half a trillion dollars.
The company’s massive deployment of I.T. solutions in its supply chain management is largely responsible for its behemoth successes.
- The ERP solution connects its internal and external resources and helps Walmart reduce supply chain inaccuracies.
- The solution uses artificial intelligence to enable Walmart to manage suppliers’ relationships.
- Walmart’s ERP software led to developing efficient supply chain channels, which increased revenue and customer satisfaction.
- ERP implementation led to the seamless sharing of information between Walmart and its channel partner P&G.
- Walmart has outlets spanning across the globe; the ERP system helps connect Walmart as one unit.
Fulton & Roark
Fulton & Roark is a retailer of award-winning men’s fragrance and grooming products.
The company’s ERP solution connects mission-critical inventory processes to accounting data. Before deploying ERP, Fulton & Roark tracked inventory data with spreadsheets and used desktop accounting software to manage financial data.
But as the business grew, the company moved from spreadsheets to inventory management solutions and tried a couple of other accounting software, but the limitations were still apparent.
To centralize and streamline their processes, Fulton & Roark deployed an enterprise resource planning solution, and within three weeks, they were able to:
- Catch a large number of bookkeeping errors related to inventory.
- Reduced reliance on external accountants.
- Manage accounting tasks in-house.
- Grew both unit and dollar volumes significantly with no extra headcount.
- Increase sales by about 50 percent year-on-year without increasing headcount.
Here’s what Allen Shafer, Co-founder of Fulton & Roark, had to say
“… We can more confidently approach large accounts. We have better visibility into our own margins and inventory, which is enabling our ecommerce business to take off.”
Green Rabbits initially started as Candy.com, a candy wholesale business, and the goal was to become the “corner candy store of the world.” The company was selling to retailers, event planners, and candy lovers until it ran into a problem.
Candy.com faced the challenge of shipping melt-prone chocolate bars during the summer months.
The company later developed a heat-sensitive supply chain.
With this breakthrough, the company rebranded as Green Rabbit, providing services as a perishable-goods supply chain logistics provider, with Candy.com as a subsidiary. Other food companies turned to them for supply chain help.
The company initially relied on Quickbook, Excel, and Email but deployed an ERP solution integrating accounting and order management modules to match its growth pace. Within three months, they were able to:
- Deliver tens of thousands of orders daily for its customers without errors and delay
- Automates their key business processes
- Experience double-digit growth annually
Green Rabbit’s CEO, Greg Balestrieri, believes that the company can triple its order volume without impacting its system.
The Market-Leading ERP Solution Vendors
A lot of ERP solutions abound in the market, so you’re never short of options. Here, we’ll take a quick look at some of the market-leading vendors.
This list is in no particular order.
SAP is an industry-leading ERP solution provider with over 40 years of experience. The solution is suitable for companies of any size, and it supports businesses in over 25 industries.
The product streamlines procurement, manufacturing, service, sales, finance, and HR processes. And according to SAP, over 50,000 customers use the solution.
Here’s a summary of some of the product features:
- Inventory and warehouse
- Sales and marketing
- Human resources
The solution also comes with an easy-to-read reporting dashboard and insightful analytical capabilities. It’s also highly customizable, allowing administrators to customize the solution to accommodate their unique processes.
SAP ERP also comes with users, roles, and access management functionality. It also supports multiple languages and currencies.
Oracle has more than 35 years of experience in business software development. The company has over 400,000 customers spanning 145 countries, including all the Fortune 100 companies.
Oracle’s Peoplesoft ERP solution helps organizations of all sizes to address complex business requirements, enabling them to increase productivity and streamline business processes at a lower cost of ownership.
Here’s a summary of some of the product features:
- Human resource management
- Inventory and logistics
- Training and eLearning
- Budgeting and forecasting
- Front and back offices
The solution has analytics tools that reveal important business metrics and track progress. It also comes with users, roles, and access management functionality supports multiple languages and currencies and is highly customizable.
Peoplesoft is also accessible from mobile devices.
Deltek Maconomy is an ERP solution for government contractors, professional services companies, and projects -based businesses. Deltek has over 40 years of experience building software solutions.
Over 30,000 businesses use the company’s ERP software, including some of the world’s biggest companies. Deltek designs its software to enable organizations to project profitability, reduce administrative costs, and speed collections of account receivables.
Here’s a summary of some of the product features:
- Inventory tracking
- Project management
- Sales and marketing
- Human resource
- Content management
- Budgeting and forecasting
The software is accessible through computers and mobile devices. It also provides reporting and analytics tools. Administrators can manage users, roles, and access.
It supports 11 languages, multiple currencies and is highly customizable.
Microsoft is a global leader in computer software and hardware development. Microsoft has over 45 years of experience. Its mission is to enable people and businesses worldwide to realize their full potential by creating technology that transforms the way people play, work, and communicate.
The Microsoft Dynamics 365 Business Central is an ERP cloud solution that connects the business’s functional parts to adapt faster and deliver results.
Some of the benefits of using Microsoft ERP solution includes:
- Helping businesses move to the cloud faster and with confidence
- Connect people, processes, and business insight to help them unlock productivity and make better decisions faster
- Helping businesses increase financial viability, improve forecasting and get real-time performance metrics.
- Takes care of the customers by managing the entire sales process and delivering excellent customer service outcomes
- Ensuring successful execution of projects within budget and on schedule
- Helps optimize inventory and supply chain management
Businesses can deploy Microsoft Dynamics on cloud or on-premises. It’s easily scalable and customizable.
Sage has over 35 years of experience providing software solutions for small and mid-sized businesses. The company has about six million customers worldwide, with half in the U.S. and Canada.
Sage delivers solutions that improve productivity and entrench operational efficiency.
The Sage Business Cloud X3 helps companies move beyond ERP. It centralized its core processes and takes control of the entire business from supply chain to sales. The solution provides powerful insights that enable executives to make informed decisions.
It also comes with advanced functionality that enables businesses to collaborate, manage workflows and personalize access to relevant data. The solution finds applications in the following industries:
- Food and beverages
- Process manufacturing
- Discrete manufacturing
Sage X3 is highly customizable and integrates easily with other powerful apps.
A Sage-commissioned report found that the overall ROI for Sage X3 is 213 percent, with an average investment payback period of six months.
SYSPRO is one of the global leaders in ERP solutions. It has over 40 years of experience and serves over 15,000 customers. The company provides industry-specific enterprise resource planning solutions for manufacturers and distributors.
The product ensures that businesses adapt to their unique requirements in several manufacturing environments. It also optimizes operations to ensure they stay current and in control.
SYSPRO’s ERP software can track raw materials through their entire life cycle, from their receipt to manufacturing and down to distribution. It also tracks expiration dates and certifications of quality.
Here are some of the benefits of using the SYSPRO ERP solution:
- The product delivers industry-specific functionalities and benefits to manufacturers and distributors.
- It empowers users with actionable insights, helping manufacturers and distributors make informed and data-driven decisions.
- The product enables business digitalization.
- It provides an engaging user experience.
- Users can customize and personalize their workspaces to meet their roles and needs.
- The system delivers long-term business value.
SYSPRO is scalable and easily accessible on the computer or while on the move.
Netsuite is one of the leading providers of cloud-based enterprise software solutions. Oracle acquired the company in 2016, the world’s first cloud company. Netsuite’s vision is to transform how businesses operate so they can achieve their business vision.
The company’s ERP solution streamlines mission-critical processes, allowing businesses to focus on what they do best and swiftly and confidently react to new market opportunities.
The ERP gets all parts of the company working together.
According to Netsuite, their solution is the world’s most deployed cloud ERP. Some of its features include:
- Financial planning and management
- Order management
- Production management
- Supply chain management
- Warehouse fulfillment
Netsuite’s ERP built-in business intelligence and data visualization provides meaningful and actionable insights to business executives and team members. The solution is customizable and scalable.
Today, over 24,000 businesses from more than 200 countries and territories use the software.
Successful Enterprise Resource Planning Implementation
ERP works for businesses of all sizes, verticals, and industries. But it’s only beneficial to companies when deployed correctly.
Here, we’ll be looking at the steps and checklists for successful ERP implementation. But first, let’s look at the plethora of deployment options that are available to you.
- Cloud-based deployment delivers ERP solutions via web-based interfaces and hosts the data on the cloud. Users can access the platform on the go.
- On-premises deployment implements the software on an onsite server. Users can access them via internal networks.
- Vendors host Saas ERP solutions centrally on their servers and license businesses to use them through subscription.
- Hybrid deployment combines both onsite hosting and cloud hosting.
- Hosted ERP solutions run on third-party servers in data centers.
Now, how do you implement a successful ERP deployment? Of course, continue reading.
Actionable Steps for Successful ERP Implementation
Finding an ERP system that’ll meet your requirements and deliver on ERP promises requires a structured approach. Here, we outlined some actionable and pain-free ways to go about this.
These steps can help businesses to implement ERP successfully.
- ERP is not like a typical product one can buy off the shelf. The first step in deploying an ERP solution is setting up a project management team consisting of departmental heads, senior executives, and IT.
- The next step is to define the functional requirements of the ERP system. Of course, this task requires a deep understanding of business processes and bottlenecks. The project team should also gather stakeholders’ wish lists before drawing up the requirements. Here, the team will also decide on the deployment option.
- The third step is to research vendors based on the outlined requirements and shortlists pre-qualified ones.
- The team should schedule a demo presentation with the shortlisted vendors and learn how their solutions could meet their requirements. The team will also go through the deployment options with vendors.
- The project team selects the vendor, negotiates the terms, including staff training, and signs the contract.
- The team should work with the vendors to ensure they deliver the project on schedule, within budget, and with all agreed requirements.
Now, how do you ensure the ERP implementation doesn’t fail? We’ve put together some checklists that’ll help mitigate that.
Successful ERP Implementation Checklists
Of course, no business wants to spend resources on ERP deployment only to see the project fail.
These checklists could help them ensure successful ERP implementation. We converted the checklists into a series of yes or no questions to make them pretty straightforward.
Providing answers to the questions will enable the business to gauge its readiness.
So, let’s dive in.
- Have you defined your business goal?
- How do you ensure data quality does not erode as the business aggregates, duplicates, and integrates various internal and external data sources?
- Are you clear on your staffing strength and weakness? And what efforts is the business making to address the issues of staff weaknesses?
- Are you using an implementation consultant or an internal project management team?
- Do employees know how the ERP deployment changes their job, and how is the company going about organizational change management?
Wrapping It Up
Automating and managing business processes comes with a lot of benefits. Organizations rely on HR solutions, accounting software, CRM, inventory management solutions, and other costly software solutions to manage and automate the various aspects of their operations.
An ERP solution streamlines and integrates these applications into a unified system, allowing team members to collaborate, work with the same information and perform tasks more efficiently and productively.
But deploying an ERP system could be challenging. That’s why this guide provides everything you’ll need to implement an ERP solution that’ll work for you.