Questions About ERP Software

Get answers to FAQs about ERP, explore questions to ask software vendors, and learn what’s unique about business solutions for manufacturers and distributors.

ERP is an acronym that stands for Enterprise Resource Planning. But what does that really mean? ERP software is designed to help companies manage their business operations, providing visibility into available resources, whether financial, labor, time, materials or other aspects needed. Organizations use ERP software to streamline the complexity of business processes such as taking orders, scheduling plant activity, tracking raw materials and compliance reporting. Virtually every organization with more than a few employees uses some form of ERP. It’s a competitive disadvantage if a company isn’t leveraging ERP effectively.

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Many companies adopt ERP for the first time when they realize their entry-level accounting software lacks core functionality, scalability and just isn’t giving them the visibility they need. But ERP software systems help you manage much more than financials. An ERP system like SYSPRO’s is developed in a modular way, with applications covering such diverse areas as manufacturing management, distribution logistics, CRM, order management, e-commerce, product lifecycle and engineering control, scheduling, inventory and warehouse management.

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When it comes to change, pain is a great motivator. Maybe it’s taking longer every month to reconcile your financials or you’re increasingly basing forecasts on guesswork. You have no real idea how much stock you have on hand, so it’s hard to be demand-driven. Increasing compliance regulations are tying you in knots.

Here are five common signs we see from companies ready to consider a new ERP software system:

1. Decision time has doubled. Time spent looking for information has increased dramatically.
2. Working capital has increased. Too much money is tied up in inventory and inefficient processes.
3. Redundant, disconnected software programs. You need to reduce IT complexity and unify your various front- and back-end systems with a single database – and get to one version of the truth.
4. Customer experience is suffering. If you can’t deliver what customers want, as fast as they want, to the right locations, you could lose to competitors. The right ERP system can provide visibility and agility to be more customer responsive and reduce errors.
5. Growth and expansion. If your current system can’t scale up, handle global needs, or support new business lines, it’s time to consider a change.

Making the right choice may seem daunting. But it doesn’t have to be. If you need help developing a list of requirements, find a vendor that knows your industry and market and has customers similar to your business. Once you have a list of requirements, you can then gather responses and start the comparison process.

To help you select the right ERP solutions for your business and business needs, SYSPRO offers a preliminary assessment and modeled blueprint of your business based on evaluating your current and future strategic objectives, current business processes, IT maturity of your organization, people and roles involved in ERP and your information needs.

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The answer of course is – it depends. The requirements of process and discrete manufacturing are different. A small business needs different functionality than a complex, multinational operation. Your industry may have specific compliance demands. And then you need to consider general IT issues such as ease of use, total cost of ownership, vendor stability, technology flexibility and ease of implementation. It is important to ask your proposed vendor these questions to ensure they address your unique requirements.

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For many companies, moving their IT infrastructure and software to the cloud reduces the need for in-house support structure and saves the cost of server hardware. Cloud-based ERP can be easier to scale functionality and users either up or down as required. And, it can often make it easier to share information across regions or locations. However, for some companies, you might not be ready to cede security to a third party and prefer an on-premise solution, and that’s okay with us, too. We’re one of the few software providers that offers flexibility for our customers and still provides on-premise ERP solutions. We help you choose based on your unique organizational requirements.

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Before the introduction of ERP, Material Requirements Planning (MRP) software was developed to help manufacturers keep track of what parts and components were needed to complete orders, and make sure those raw materials were on hand to support production demands. MRP expanded and evolved into ERP with the addition of applications to connect other areas of the business such as financial, sales and production operations. By integrating MRP into an end-to-end business management software solution, companies improve visibility and collaboration across the organization.

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Success of course depends on the goals you want to achieve. Many companies measure return on investment in terms of cost and time savings achieved when automating manual work, and gaining visibility into potential bottlenecks. Some look at the value of reduced risks and improved corporate governance. The potential ROI can be seen in a wide variety of departments and processes. Check out our Solutions page to explore the ROI of ERP for yourself.

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Some businesses find the best IT strategy involves maintaining more than one ERP software solution. While it may seem counterintuitive to some, the upside benefits can be significant. Say your business already has a large-scale enterprise ERP solution, perhaps managed by your corporate IT department. But it lacks core functionality to handle specific manufacturing or distribution requirements – or the cost is too high to expand or customize it to your needs. With a two-tier model, companies implement a second ERP solution for specific divisions or plants, perhaps located in different parts of the globe. And with EDI and cloud technologies, the two systems can usually share data. A two-tier ERP strategy can thus save money and provide greater agility.

Read more here: Products > What is ERP