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Beginners Guide to ERP Software in 2019

WHAT IS A ERP SYSTEM?

Concept of ERP means Enterprise Resource Planning. An ERP system is often a modular system that facilitates the administration of a company. ERP system gives decision makers in the company the basis for important decisions that can otherwise be difficult and time-consuming to produce, while it is also intended to gather and streamline the company's processes for those who work in the company.
We can certainly agree that time-consuming manual processes are neither fun nor profitable. An ERP system solves this by automating flows while allowing the company to scale up or down in size without having to sacrifice quality assurance in what it does. It simply makes it easier to run a business, regardless of size.

An ERP system often consists of several components such as:

  • Integration Platform
  • Finance System
  • Reporting Tools
  • Project
  • Order Management(OMS)
  • Product Management(PIM)
  • Case Management
  • Document Management
  • Inventory Management
  • Purchases & Orders(SCM)
  • Sales Support (CRM)
Many companies often have their data spread over several different smaller tools. For example, there are fantastic CRM tools that help the organization in its sales work. Then there is no point in having a custom built module for this. The ERP system is therefore often the application where you store all data and integrate with.

WHY DO YOU NEED A ERP SYSTEM?

As a startup company, an entire ERP system can feel extremely large and complicated. When setting up their first E-commerce in WordPress with WooCommerce, the company may be running in a garage or a student corridor. However, when the company starts to develop, the need arises immediately. When e-commerce begins to grow towards more sales outlets, multiple markets, and several languages, an ERP system turns out to be a crucial part.
  • To do an E-commerce project with WooCommerce, we have seen many times give a lot more for the money than if you do with other systems. This is why WooCommerce is the most popular solution for E-commerce projects among the Open-Source options.
  • As with so much else, this modularity and speed mean that you must carefully consider the architecture of its solution. When it comes time to scale up an E-Commerce venture, regardless of system, one wants to carefully plan its "system puzzle" to avoid having to do as much manual job as possible and instead focus on scaling the business and marketing your products.
  • By having a good solution for order management and product information, your business can manage to work either with several brands or to have different websites targeted at different markets(so-called multishop solution).
  • With the help of the ERP system, you can collect all orders in one place, with PIM you can output product images and product information in different languages in a simple way and with a CRM you can easily manage all customer data and provide effective documentation of your sales and marketing work.
  • In the manufacturing industry, production management is very important. Process optimization and productivity improvement are important factors to help businesses meet market requirements in a timely manner, reduce production costs and inventory. 
  • ERP for manufacturing provides the necessary tools to forecast and plan production, planning material needs from time to time, managing the production process and calculating cost distribution, creating an effective tool to streamline the entire process of managing the entire production management process of an enterprise.

THE SYSTEMS ARE IN PLACE FOR MANY YEARS: CHOOSE A GOOD SUPPLIER

An ERP system is often an investment and will, therefore, have a lifetime of a few years. It is therefore extremely important that you put the time needed to procure a good system that suits the business and its requirements.
As with an e-commerce venture, it is therefore important to make good demands on the system and ensure that the supplier has experience. A poor implementation can mean increased costs instead of decreased, and if the system is rolled out too quickly without the right training efforts, the project can easily get collapsed.
Support will always be needed and it is, therefore, important to know which set times the support has and whether it is possible to reach them and get help if there is a pressing situation. If the ERP system does not work it will, of course, be more difficult to do business, therefore the company must have good support with good response times.
If further development is needed then this is also interesting to have mapped from the beginning. What can it cost to do different types of development? Some suppliers have low prices on the ERP system and then take extreme amounts for further development. Don't fall into that trap but make sure that further development can be done for a reasonable cost.

INTEGRATION OPPORTUNITIES PROVIDE FREEDOM

In order for a business to function in a good way, users need to be able to use the systems in a simple and intuitive way. This counteracts errors and increases the quality of the delivery. The fact that it makes it fun to work instead of frustrating is of course also extremely important. Good UX is therefore extremely important when working with the company's processes in order to quickly and easily implement what you want to do.
If the ERP system has good integration platform then it can be assumed that the users work with the standardized ERP system in order to then be able to be integrated with more specialized tools. This type of microservice architecture means that each part of the business can be improved separately without the disappearance of functionality.

MAKE SURE THERE ARE NO STRANGE RESTRICTIONS

Integration possibilities are A and O in an ERP system. Most ERP systems can be integrated, but different systems have different thresholds. Be sure to check that there are no strange restrictions.
A good manufacturing ERP should cope with many readings and writing at a very high pace, and this is something that one has to make sure that it is possible to scale the business efficiently. Larger systems generally handle very high loads as they have to cope with huge amounts of transactions and orders, while smaller ones can be more limited. Here it is important to understand the limitations that exist and think about whether you can live with them.

SECURITY & AVAILABILITY

ERP Software Security

One has to keep in mind is that some systems often have very high safety requirements. As such, they are therefore not open to the internet as most SaaS systems do, but require a considerably much more complicated IT environment. The threshold for integration with a self-regulated system can, therefore, be considerably much higher than for a SaaS system, and with this follows costs.
For companies that want to follow certain types of ISO certifications and who are on sensitive data, it is often no alternative to using SaaS, but the benefits can be great for those who do not have to think about these limitations.
The fact that the system is available from all the devices that you normally usually use is not always obvious.
MIGRATION & EDUCATION


ERP Migration
One thing that is easily forgotten is the cost of migrating and importing existing business data. First, the project must be implemented, but who can carry out such a project? This becomes a problem in itself to solve, and can easily be forgotten.
Another aspect that becomes important when it is time to get started with the system is what training initiatives are possible to get help with from the supplier's quarters, and what it is for costs associated with these efforts. Keep in mind that during the life of the ERP system you must probably train a number of people in it. Count on how high the staff turnover you have and add that cost to the running costs of the system.
WHAT DOES IT COST?
Different systems have different ways of paying. It can feel like comparing pears and apples sometimes and therefore it is ultimately the total cost of the system that is interesting in relation to what you get out of it. Counting in this way makes it easier to compare different options and constitutes a goat concept - "TCO", Total Cost of Ownership.
For self-hosted ERP systems, you often need to consider these aspects:
  • What does the license cost?
    • Per module
    • Per-user
  • Is it possible to switch up or down modules and users?
  • What is included in the implementation cost?
  • What additional services are needed?
    • Training
    • Migration
  • What does a support agreement cost?
  • What will be the cost of operation & technology management?
    • Upgrades
    • Hosting including SLA
    • Backup
  • What adjustments may be needed, and what does it cost to implement?
  • How much time do we have to spend ourselves on maintaining the system?
For SaaS ERP, it is almost the same thing to consider, but with the big difference that the supplier is responsible for the entire technology management of the platform itself.
  • What does the system cost each month?
    • Per module
    • Per-user
  • Is it possible to switch up or down modules and users and with what for binding time?
  • What is included in the implementation cost?
  • What additional services are needed?
    • Training
    • Migration
  • What does a support agreement cost?
  • What are the guarantees in operation & technology management?
  • what adjustments may be needed, and what does it cost to implement?
  • How much time do we have to spend ourselves on maintaining the system?

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