Key features of an ERP

Before considering the core capabilities of an Enterprise Resource Planning system, its first worth thinking about the core activities of a business – any business – before focussing on the specific requirements of an individual company and whether a particular ERP would suit.

Every business needs to undertake five core processes to one degree or another, with these processes being:

1. Telling potential customers about your offer
2. Convincing a customer that they need your goods or services in preference to a competitor
3. Actually delivering that good or service
4. Providing help and support with the product if the customer experiences any problems
5. Managing all of the financial aspects of these processes

These five processes are better known in business as marketing, sales, production, customer service and finance. Every company needs to do them, and every company needs to manage them effectively in order to prosper and grow.

Interlude - a brief history of ERP

As the core processes we’ve outlined so far are pretty much universal across all businesses, business owners came to realise that managing these processes effectively was essential to the success of an organisation. Initially, Materials Resource Planning (MRP) emerged within manufacturing in order to manage, control and improve the complex manufacturing processes involved. When this proved a success, people asked whether this kind of management process could be applied to all the other aspects of a business. Enterprise Resource Planning (ERP) was born, evolving rapidly in the 90s and coming of age in the noughties with the advent of ever-increasing computer power and the emergence of cloud computing.

Do all ERPs offer these core capabilities?

Back to those five core capabilities that we mentioned earlier. And whilst all those processes are applicable to pretty much all businesses, when it comes to production there are some caveats.

Production means different things to different organisations and we’re not even sure we should call it ‘production’. Instead let’s call it stuff that the company has to do to deliver the product or service that they offer.

When it comes to manufacturing, the stuff they have to do is pretty complicated – from buying raw materials, to creating the components, to bolting those components all together to achieve a finished product. Some ERP systems will excel at managing and automating a lot of that complexity and detail. Now consider light manufacturing. The stuff that you need to do to assemble products from bought-in components is more straight forward than manufacturing from scratch. Let’s consider a company that doesn’t even touch manufacturing – a wholesaler must manage the goods in and the goods out of their business and isn’t concerned with creating the product.

Now consider a services industry like consultancy and you don’t even have the complication of materials handling, but you do need to measure the time you spend on the stuff you do to provide your service.

That’s a long-winded way of saying that an ERP system is not all things to all companies. In fact, some ERP software works in multiple sectors, while some are only suitable for just one. It all really comes down to the vertical market in which you operate, together with the maturity of your own business.

How do I match the right ERP to the capabilities that I require?

There are many capable ERP software systems available on the market, but the most important question you must ask yourself when considering those capabilities is “are they right for my business?”

It’s unlikely that ERP software will work straight ‘out of the box’ as no two companies are ever the same – and so the ERP software will need to be customised for your individual business requirements. What is important is that you choose the best fit software for your company and, probably more importantly, that you choose the right partner to implement it for you.

To ensure that you get the right ERP software with the right capabilities for your business, you’ll need to develop a specification document.

We always recommend that our clients think of their business as the journey of the money through it. As the initial lead turns into a final invoice, you need to map all of the processes that your business goes through to make that journey possible. At the end of this process – which can take significant time and resources to get right – you’ll end up with a wish list from which you can develop an RFI with which to approach prospective partners.

A good partner will be able to integrate the ERP system into your business correctly and extend it with additional, bespoke functionality if required. They should also offer sufficient aftercare support for your business so that the ERP system can evolve as your business does.

We always advise our clients that a mediocre product installed well is better than a good product that is installed badly. It is therefore paramount that you have complete confidence in the partner that you choose.

ERP Experts has been the ERP partner for dozens of businesses since 2005. We are an accredited NetSuite Solution Provider. If you are interested in finding the right partner for your ERP implementation, please contact us to start the conversation.