Enterprise Resource Planning (ERP) software suppliers come in all shapes and sizes, with the vital business process software available as a client server application, a hosted ERP service or even via a web-based portal.
What is ERP software?
ERP software has its roots in the Nineties manufacturing industry, where earlier forms of the applications were used for manufacturing resource planning (MRP) and computer integrated manufacturing (CIM).
However, ERP has grown to cover all core functions of a business, regardless of its industry sector. As a result, both private and public sector organisations now use ERP systems in some form or other.
ERP applications tend to be modular in nature, sharing vital business information which is held on a central database repository, or repositories.
What does ERP software do?
ERP systems typically carry out financial and business planning functions, which might formerly have been carried out by many smaller standalone applications.
Examples of ERP system modules include: product lifecycle management, supply chain management (for example purchasing, manufacturing and distribution), warehouse management, customer relationship management (CRM), sales order processing, online sales, financials, human resources, and decision support system.
Why use ERP software?
One major benefit of having a single modular ERP system is that it can unite and link together multiple processes and parts of the business, making the business run more efficiently.
By automating various functions, you can also benefit from having, for example, good order tracking, from acceptance through to fulfilment. In terms of the revenue cycle, you can track invoices through to cash receipts.
ERP systems also centralise the data in one place, which can eliminate the problem of synchronising changes between multiple systems, and allows business managers to get a more accurate view of the business’s information.
Having a single data repository can also lower the risk of losing sensitive data, if you use appropriate data security and authorisation.
What are the drawbacks of ERP systems?
ERP systems can prove to be complex and difficult to customise, keeping in mind the actual complexities and idiosyncrasies of each individual business itself.
Many firms fail to adequately invest in ongoing training for the involved IT personnel, and there is often a lack of corporate policy to protect the integrity of the data in the ERP systems and the ways in which it is used.
Business processes frequently have to be re-engineered to fit the new ERP system, and this can lead to problems with processes and staff.
Also, ERP systems can be very expensive. This has led to a newer breed of simpler ERP systems for smaller enterprises which carry a lower cost, and many established ERP vendors now offer managed ERP services, offered over the web.
Finally, the fact that ERP systems centralise the data in one place can increase the risk of loss of sensitive information in the event of a security breach.
Popular ERP Vendors
- Microsoft Dynamics
The Microsoft Dynamics ERP suite includes Microsoft Dynamics AX, an accounting and finance, HR and CRM tool; Microsoft Dynamics GP, a mid-market accounting suite; and Microsoft Dynamics NAV and Microsoft Dynamics SL, both SME ERP platform.
- Oracle e-Business Suite
A modular ERP platform, the Oracle e-Business Suite has many elements including Oracle CRM, Oracle Financials, Oracle Logistics, Oracle Order Management and Oracle Warehouse Management Systems. The software makes use of the Oracle database.
Sage Line 500 and Sage 1000 are the cornerstone ERP solutions for thousands of UK businesses. Developed for the UK mid-market from day one, the Sage Line 500 and Sage 1000 Suites offer customers a broad range of capabilities including CRM, HR, Payroll and Business Intelligence.
- SAP Business One
Aimed at SMEs, SAP Business One contains over a dozen core modules, such as Financials, Sales Opportunities, Purchasing Banking, Human Resources, E-commerce and WebCRM.
- Infor Global Solutions
Infor is a large business software provider which has several ERP suites, such as Infor ERP LN, Infor ERP SyteLine, Infor ERP VISUAL, Infor ERP Adage and Infor ERP LX. They are built on an open, flexible, service-oriented architecture (SOA) with web-based user interfaces.
- NetERP from NetSuite
NetSuite supplies on-demand, integrated business management software suites aimed at mid-market enterprises and divisions of large companies. It offers hosted accounting, CRM, ERP, e-commerce and web site development software.
- Lawson Software
Lawson merged with business software firm Intentia International in 2006, to offer mid-market business an alternative to larger ERP vendors. The vendor’s ERP packages are Lawson S3 (broadly for service firms) and Lawson M3 (broadly for manufacturers and distributors.