So you need an Enterprise Resource Planning (ERP) solution, but where to begin? ERP software is so broad – encompassing a lot of both front and back-office functions, such as accounting and financial, HR, supply chain management (SCM), customer relationship management (CRM), project management, and more.
The process of searching, evaluating, purchasing, and deploying an ERP solution is not as simple as it once was. There’s no such thing as a one-size-fits-all approach when it comes to ERP software. Although you may need other ERP components, at the minimum, your system should have these five. And just as importantly, make sure that the components they offer have all of the features your business needs. Without doing the proper research, you’ll end up searching for a new ERP way sooner than you’d like.
The financial management component within your ERP system stores, monitors and analyzes all of your financial data, including accounts payable, accounts receivable, costs, budgets and forecasts. It helps reveal insights into your spending, so you can discover profit trends and times of unusually high spending. You can then put that data to good use by changing whatever processes are causing lower profits or high spend, so you can maximize your profits while reducing costs.
The financial managemnet component can help improve cash flow, lower costs, and increase profitability while maintaining accurate reporting. ERP software with a strong financial feature should ensure companies meet financial reporting and tax requirements with a single accounting, banking and payment system. Keep in mind: it needs to allow for enhancements in financial performance with real-time information on expenses and revenue contribution.
Business Intelligence (BI)
Considering how many businesses today are attempting to create data-driven decision-making processes, BI has quickly become one of the standard ERP components. The BI component of your ERP software collects and analyzes data, providing you with actionable insights related to your business processes. BI in ERP systems can be your organization’s eyes and ears, allowing you to monitor your chosen key performance indicators (KPIs) and make changes when those KPIs aren’t where they should be.
Customer Relationship Management (CRM)
Your ERP system should help bring together data that better enables salespeople and marketing planners alike to better address customer needs, preferences and buying patterns. A CRM component allows you to do this by keeping track of all of your customer and sales data within your ERP solution. The insights you can gain from a CRM component helps optimize your marketing and sales efforts. It should also better manage invoicing activities, provide relevant and real-time information for the best prepared proposals and monitor the overall status of contracts to help you gain a better understanding and be kept informed at all times.
A big benefit from CRM is tracking the buyer histories of your customers. With this data in hand, you can suggest additional purchases through cross-selling or upselling, or try to sell them a relevant product/service when they’re otherwise not as likely to buy.
Employees are the number one priority in any organization, because without them, your business wouldn’t exist. The HR component within your ERP system should be able to handle the full scope of employee management, from onboarding to offboarding, and from compensation management to timekeeping. The biggest feature you need from a HR component is payroll software. Submitting payroll and issuing direct deposits by hand is incredibly time-consuming. An HR component automates payments, including tax and benefits deductions, which saves you time to focus on more important tasks.
Supply Chain Management
As ERP solutions mainly cater to manufacturing and distribution companies, your ERP system should absolutely be able to monitor demand, supply, manufacturing status, logistics and distribution in record time. The SCM component of an ERP system is one of the most crucial for this reason. You need the best SCM features to be able to optimize your supply chain, and that starts by collecting real-time data. Real-time data allows you to keep tabs on your supply chain, so you can find and fix issues as they happen, rather than waiting until you receive the data a day or more after the fact.
Failing to find information, such as the location of a product’s key components, and promptly share this information with supply partners, can have a significant impact on a company’s supply chain. The SCM component, with the aid of real-time data, can help with demand planning, so you can create an up-to-the-minute accurate production plan that meets demand, but doesn’t exceed it.
Looking for more? Download our ERP buyers guide for free and compare the top-24 products available on the market with full page vendor profiles. The guide includes four key capabilities to look for in an ERP solution, plus five questions to ask yourself and five questions to ask the software provider before purchasing. It’s the perfect resource for anyone looking to find right ERP for their business/organization.
Latest posts by Elizabeth Quirk (see all)
- The ERP Software Guide and How to Choose The Best One - March 5, 2020
- 3 Security Features to Protect Your ERP Data - March 4, 2020
- How to Manage ERP Customizations - March 2, 2020