Organizations from a variety of industries use Enterprise Resource Planning (ERP) software. There are types of businesses that see more benefits of ERP. Some key trends suggest when it’s time for a business to implement or upgrade their ERP system, which includes:
- Times of growth: The organization is growing, has grown, or is planning to grow significantly
- Issues with operations: The organization needs enterprise software to better manage processes
- Mergers or acquisitions: For example, the parent organization needs to streamline systems across companies
- Old legacy systems: The organization’s current system is outdated and not available for upgrades, or no longer serve the business and users adequately
- Strategic roadmap: Organizations with forward-thinking executives have outlined a business technology roadmap that includes a new enterprise solution
While many factors indicate the need for implementing an ERP system, companies in certain industries stand to gain the most from making the move.
Benefits of ERP for your business
Specifically, key business benefits of ERP software are:
- Enhanced Business Reporting:
- Better reporting tools with real-time information
- A single source of truth – one integrated database for all business processes
- Better customer service:
- Better access to customer information
- Faster response times
- Improved on-time delivery
- Improved order accuracy
- Improved Inventory Costs:
- Only carry as much inventory as needed, avoid these common issues
- Too much inventory, and higher overhead costs
- Too little inventory, and longer customer fulfillment times
- Only carry as much inventory as needed, avoid these common issues
- Boosted Cash Flow:
- Better invoicing and better collections tools to bring cash in faster
- Faster cash means more cash-on-hand for the business
- Cost Savings:
- Improved inventory planning
- Better procurement management
- Better customer service
- Improved vendor relationship management
- Better Data & Cloud Security:
- Dedicated security resources
- Avoid installing malicious software
- Data distributed across multiple servers
- Business Process Improvements:
- Automate manual or routine tasks
- Implement smarter workflows
- Gain efficiency
- Supply Chain Management:
- Effective demand forecasting and lean inventory
- Reduce production bottlenecks
- Transparency through the business
Cons of ERP – Important Factors & Challenges
- Costs of an ERP Software
- Third-party software add-ins
- Implementation costs
- Maintenance
- Initial and continuous training
- Complex Data Conversion
- Developing a solid data conversion strategy can be difficult
- You have to define, examine and analyze data sources
- Bad data conversion will cause delays and increased costs
- Requires thorough training
- Training needs to cover all of the ERP system’s features.
- ERP training sessions need to be in line with business processes
- IT users need to be trained for the technical aspects of the ERP System
Pros of Odoo ERP –
- Costs of an Odoo ERP Software is very less
- Third-party software add-ins are not as costly as other ERPs
- Implementation costs is very less compared to other ERPs
- Maintenance cost is also less compared to other ERPs
- Initial training is enough as Odoo has an easy & intuitive user interface
- Data Conversion is comparatively easy in Odoo
- Developing a solid data conversion strategy is easy with Odoo
- During Odoo implementation data sources are defined, examined, and analyzed in advance
- Easy and accurate data conversion helps in timely delivery on projects and reduced the cost of implementation
- Initial training is enough for Odoo ERP
- Odoo Training covers all of the ERP system’s features.
- Odoo ERP training sessions are in line with business processes
- IT users are trained for the technical aspects of the Odoo ERP System
ERP projects are an investment of time and money. Among many other things, successful ERP implementations require:
- Alignment between the business and IT
- Executive sponsorship and support
- Internal team leaders
- Trusted external partners (consulting and software vendors)
ERP software is like any business technology – the tool on its own doesn’t cause failure or success. The business environment, leadership, and end-users determine the ROI of an ERP system – along with the project planning, methodology, and implementation.
Key areas that can cause ERP implementation failure are:
- Data conversion – One of the biggest issues during an ERP project is data conversion – moving data from the old system and mapping it into the new ERP.
- Integrations – Early in the project, you need to start thinking about what other systems need to integrate with your ERP system and have a solid plan for integrations.
- People – an executive needs to be involved in the ERP project, and other key business leaders need to be included. Having a communication plan is also key.
- Training – training needs to be an integral part of the ERP project. Internal teams and end-users have to be comfortable with the new software.
- Project planning – planning is crucial to ERP implementation success. Following a methodology is also fundamental to avoiding failure.
Will an ERP System Work For Your Business Needs?
New research shows that ERP projects today are much more successful than in the past. Coupled with the fact that cloud ERP software options available on the market today are easier to implement, and keeping in mind the benefits listed above, there’s a real business case for ERP. Timing is also an important aspect to consider. In addition to the trends we mentioned at the beginning of this article, you can start by reviewing the five questions below to see if it’s time to start considering ERP software for your business.
- How accurate is your business data?
- Implementing comprehensive ERP software not only provides access to important data, but ERP also enables a better process for collecting and analyzing data
- Are your business systems connected?
- Moving to one company-wide ERP solution can help improve internal processes – one common platform fosters better internal communication
- Better processes and communication leads to increased efficiency and enhanced company performance
- Is your company growing?
- As companies increase in size it’s easy to quickly outgrow existing processes and technology. Growing pains are a good problem to have, but like all other business challenges, these issues need to be addressed to continue the path towards future progress. A comprehensive ERP solution can help.
- How satisfied are your customers?
- Disruptions internally – growing pains, problems between production and sales, or the inability to access important data – affect the customer experience. Modern ERP solutions help you save time and meet customer expectations.
- Do you need to reduce costs?
- ERP software enables you to be more cost-effective through gained efficiencies in these areas (and more):
- Faster financial close
- Improved inventory planning and accuracy
- Accurate forecasting
- Reduced days sales outstanding
- Shop floor optimization
- Reduced purchasing spend
- Reduced freight spend
The types of businesses that benefit the most from ERP
What are the types of businesses that see the most benefits of ERP systems? The versatile nature of ERP software allows companies across industries to implement solutions based on their business needs. Major industries that use ERP include:
- Manufacturing
- Distribution
- Professional Services
- Construction
- Industrial Services
- Service Business
- Healthcare
- And more
One manufacturing executive we’ve worked with said implementing ERP (in their case, Oracle JD Edwards) gave the company a “robust platform” to manage and control their manufacturing processes. “The tools and information available in the system will allow us to better manage our distribution and manufacturing businesses.”
Professional services is another industry where ERP is often used and sees copious benefits of ERP software. The needs of these organizations differ from manufacturing and distribution. Businesses in this industry are often project-based and need tools for project planning and execution, managing project costs, strong customer relationship management, and more.
The CIO of a project-based company we recently worked with to implement a cloud ERP system commented: “By moving our project management process to the cloud, we can keep up with our business growth and continue to serve our clients to the best of our ability.”
How does ERP software improve business processes?
ERP systems solve many problems you may be facing, including a need for:
- One source of truth as one master system of record for all important company data
- Automating manual processes, such as invoice creation, routine communications, financial report generation, product and service delivery, and material requirements planning
- Better visibility into all aspects of the supply chain increased efficiencies and improved productivity
- Improved business data security, whether stored on-premise or in the cloud.
ERP software selection: next steps
ERP selection and implementation processes are not for the faint of heart. Choosing the right Enterprise Resource Planning system can be complicated, and often there is a lot at stake. You want to make the best possible choice for your business. But there are ways to make it easier for yourself and your team. There are many factors to consider, below are some of the top factors recommended for anyone thinking about a new ERP.
- Define why you are doing the project.
- Determine who will be involved.
- Find an Odoo ERP partner who you trust.