What Is Enterprise Resource Planning (ERP)?

Enterprise resource planning (ERP) is a process used by companies to manage and integrate the important parts of their businesses. It is a software system that helps you run your entire business, including processes in finance, human resources, manufacturing, supply chain,services, procurement, and more.

Why ERP is important?

ERP systems streamline and automate processes, creating a leaner, more accurate and efficient operation. ERP provides complete visibility into core business processes.

ERP Modules All the below-mentioned modules can be found in an ERP system :

01. Define your business requirements :

The very first step in selecting the appropriate ERP system for your business is evaluating your business processes and set your expectations from implementing an ERP system. Identify bottlenecks and pain points in your existing system and determine how ERP software can fit into your process to transform your operations and improve business performance.

02. Understand Your Business Ambitions and Growth Plan :

The 2ndstep shall be to understand the business ambitions and growth plans. ERP is always a long-term decision. You don’t change ERP software every now and then. ERP must be able to fulfil your current pain points as well as your future growth ambitions.

03. Establish an ERP vendor selection criteria :

Here is a list of factors to be considered for your ERP selection criteria- Deployment Option, Industry-specific functionalities, Scalability, Integrations, Flexibility and customizations, User-friendliness, Support for the latest technology trends and Reporting and analytics.

04. Price and Timescale :

Time for ERP implementations can range anywhere from a few months to even years, based on the size of the business, number of locations, and customization required. When working on the budget, you have to consider the potential hidden costs outside of purchasing the software as well including costs for maintenance, resources required, training cost, hardware in case of an on-premise deployment, and other utilities that may be required.

05. Search the market for ERP vendors that meet your selection criteria :

The next phase in the software selection process involves actually starting the search for new software. Your key stakeholders should be involved in the search for potential software vendors that might meet your evaluation criteria/requirements. Look for vendors that offer solutions that meet your requirements and that have the ability to solve the company’s identified problems.

06. Schedule ERP vendor demos :

When you have identified potential vendors, seek out more information and schedule product demos. Many of the vendors may send a representative to give you a demo in house and some vendors may even have online product demos and free trials.

07. Make your decision and agree on the final terms with the ERP vendor :

Make sure that you have a clear Statement of Work (SOW) with the vendor before you initiate the actual project. The SOW should identify scope, timelines, milestones and costs to avoid any ambiguity at a later date.