Business Automation and Software Blog

Is Enterprise Resource Planning (ERP) Outdated?

Posted by Robert Baran on Wed, Aug 15, 2018 @ 11:00 AM

With so many changes in technology that occur every single day—remember when your phone only made phone calls? —you might be surprised to learn that what you thought was a newer software solution in fact had its birth more than 50 years ago. Enterprise resource planning (ERP) software solutions may have come from early Material Requirements Planning software developed in the 1960s, but that doesn’t mean the modern ERP is outdated.

How can ERP improve a company’s business performance?

ERP takes a customer order and provides a software road map for automating the different steps along the path to fulfilling it. When one department finishes with the order, it is automatically routed via the ERP system to the next department. The order process moves through the organization, and customers get their orders faster and with fewer errors than before. ERP can even apply that same magic to the other major business processes, such as employee benefits or financial reporting. 

ERP serves the unique purpose of keeping information transparent across the company. Information is no longer siloed with dollars relegated to finance and inventory only available to the warehouse staff. ERP integration allows sales to see the notes from a customer service call and follow up with an account. Online carts can reflect inventory, so a customer knows if the product they’re browsing is in stock and can adjust their purchase plans accordingly. Purchasing can manage the influx of stock to meet growing or shrinking demands, and the c-suite can easily see if the company is delivering on its shipping promises.

The software is less important than the changes companies make in the ways they do business. If you use ERP to improve the ways your people take orders, manufacture goods, ship them, and bill for them, you will see value from the software.

What will ERP fix in my business?

There are five major reasons why companies implement an ERP.

  1. Integrate financial information: Funneling dollar amounts through your ERP ensures that financial information is limited to a single version of truth. Finance sees immediate updates based on new inputs from sales and executives have clarity into the entire financial history of whatever timeframe they need.
  2. Integrate customer order information: ERP systems can become the place where the customer order lives from the time a customer service representative receives it until the loading dock ships the merchandise and finance sends an invoice. By having this information in one software system, companies can keep track of orders more easily and coordinate manufacturing, inventory and shipping among many different locations at the same time.
  3. Standardize and speed up manufacturing processes: Manufacturing companies—especially those with an appetite for mergers and acquisitions—often find that multiple business units across the company make the same widget using different methods and computer systems. ERP systems come with standard methods for automating some of the steps of a manufacturing process. Standardizing those processes and using a single, integrated computer system can save time and increase productivity.
  4. Reduce inventory: ERP helps the manufacturing process flow more smoothly and improves visibility of the order fulfillment process inside the company. This can result in reduced inventory of the material(s) required to make products, improved customer delivery processes, and more accurate finished goods inventory at the warehouses and shipping docks. To improve your inventory even further, consider pairing a supply chain software along with your ERP.
  5. Standardize HR information: Especially in companies with multiple business units, HR may not have a unified, simple method for tracking employees’ time and communicating with them about benefits and services. Your ERP can fix that.

No matter what line of business your company is in, there is an ERP designed for you. From manufacturing to construction to real estate to food industry, specially tailored ERP solutions exist to take care of each segment’s needs. ERPs are also further customizable to form to the specific and unique needs of your particular company, ensuring that you have the best experience and outcome possible from your ERP solution.

Will ERP fit the ways I do business?

Moving to an ERP is a huge endeavor, including decisions on providers and whether it will be hosted on premise or in the cloud via software as a service (SaaS). First-time ERP users will also want to contract training and testing to ensure the ERP is properly integrated and used. The right ERP system can improve collaborative planning, enhance your supply chain strategies, and help you meet the growing demands of your customer base. No matter how you do business, there is an ERP designed to fit you.

Ready to consider your first ERP? You don’t have to do it alone. Find out how PositiveVision can help you get everything you need from your new ERP solution.