Understanding what ERP is and how it can drive your business forward is key in preparing yourself for the digital future. We spoke with David James, an ERP expert with 20 years’ experience of ERP and digital technology. With a varied background in IT, manufacturing, and digital media, David has an MBA, a 1st class honours degree in IT & Electronics and has grown and exited three successful businesses - giving him a wealth of experience. We sat down with David and asked him all things ERP.
What is your understanding of an ERP system?
Enterprise Resource Planning (ERP) can probably be more accurately described as a ‘business management solution’. At the most basic level, ERP systems integrate the various functions of an organisation - sales, purchasing, accounts, operations, inventory, and human resources - into a single software solution.
What are the benefits of using ERP?
Many organisations operate in a ‘functional silo’ model, with separate departments operating and reporting in isolation. This means that departments will often maintain their own databases and spreadsheets, which leads to the duplication of data entry and multiple versions of the truth. ERP systems centralise information from across the organisation into a single database, which speeds up the decision-making process and encourages more collaborative working. Businesses adopt ERP at various stages of their life cycle – some use ERP systems to facilitate and manage growth, others to standardise processes during a merger/acquisition, or for succession planning.
What kind of industries are using an ERP system?
Historically, ERP systems have been heavily associated with manufacturing & inventory management, but modern systems are used by a wide range of organisations and industry sectors. Cloud ERP has allowed smaller organisations to take advantage of the kind of efficiency savings normally only associated with larger, more expensive, ‘on-premise’ ERP systems.
What is the difference between ERP and Cloud computing?
Quite simply, ERP is the software system itself, and ‘Cloud’ is the delivery method. Cloud ERP systems remove the need for expensive on-site servers and place the responsibility for security, data backups and maintenance, into the hands of the solution provider. Software-as-a-Service (SaaS) is a commercial model adopted by some Cloud ERP providers, and this introduces a subscription-based payment model, which often includes support and ongoing system updates.
What is the future of ERP software?
In my view, there will be a number of themes that will define the future of ERP. The most exciting is Artificial Intelligence (AI) and machine learning, which will open up almost limitless opportunities for organisations to run more efficiently and analyse their performance in even more detail. Continued expansion of ERP systems into the wider environment will also open up more opportunities to analyse data. This will inevitably be via deeper integration with 3rd party software and hardware, but centralised into a single point of focus. For example, this could allow businesses to automate pricing based on the weather, or to calculate and place orders for stock based on the interaction with a product on social media.
Why is having an ERP system so important for SMEs?
An ERP system isn’t suitable for all businesses, but for those who have ‘outgrown’ their current infrastructure and find that it is difficult to get an instant overview of performance, ERP can create a competitive advantage for SMEs. An ERP system can empower staff to make faster, more informed decisions; and to improve the service they provide to customers. Rather than wasting time on reconciling information from across the business, organisations can go from “I’ll check” to “complete” in seconds with an ERP system.
How do I know that a particular ERP system is right for me?
Most ERP providers promise to improve efficiency or increase visibility, but it is important to analyse your individual requirements against the solutions on offer. ERP is about standardisation, and any successful ERP implementation relies on acceptance from internal stakeholders, which may also require changes to established processes in order to provide the best outcome. It is also important to consider scalability and whether the system you need today will match the system you need in 5 years’ time. For this reason, Advanced offer updates for life with our Business Cloud Essentials ERP software, and a full project management and consultancy service to ensure your implementation meets your requirements, for both today and the future.
To find out more about ERP systems and how it can help you click here and contact us.