ERP: What Is It? What is it for?
How can you improve your business management? What is an ERP? And why implement it? What are the benefits for the company? Which ERP software should I choose? What is the definition of an ERP solution?
We'll answer these questions and then focus on ERP and its functionalities, what kind of information it can provide and how it can help in the decision-making process.
Bonus at the end: a system that puts the user at the centre.
ERP software: what is it?
What does ERP mean?
In good Portuguese, we use the term enterprise resource planning, or SIG, integrated business management system. ERP is the international acronym for Enterprise Resource Planning. Implementing ERP software consists of installing and configuring an information system whose particularity is to unify all your company's information: everything is centralised and the same information is shared with the other teams.
The available database is therefore unique. All information shared, modified or inserted is updated in real time. This IT system separates activities and processes by means of separate business modules, facilitating control and organisation within the system, reflecting the day-to-day reality of the company.
A question of Enterprise Resource Planning
If ERP software improves information exchange, control and quality, it also speeds up coordination and synchronisation between teams, directly impacting productivity. Various processes are consequently facilitated: the notion of integrated management throughout the company provides a global vision.
You have a decision-making tool that allows you to make better choices at any time. The ability and time to analyse and audit ERP software is of paramount importance: data is 100% traceable, making it very easy to trace the origin of this or that piece of information.
Essential features
What is an ERP for?
Just one word: organise. An ERP provides a single database where all (or part, at your discretion) of the information and flow (processes) of your business can be found. Added to the fact that ERP can integrate with other systems, in practice it saves time, reduces errors, automates tasks, provides reports and analyses that positively affect any decision-making. Overall, if applied well, it makes the company more organised and more efficient.
Depending on your needs and the diversity of your company, you can choose to use (or install) all the existing modules or implement only the modules necessary for your activity. Important: splitting modules across different solutions (from different suppliers) can have a negative impact on the purpose of an ERP. Also, bear in mind the system's ability to evolve (or scale). Your company's needs will change over time.
What are the requirements for an ERP system?
Imagine the impact of sharing - in real time - the same database across all your processes and areas. In order to give you a broad analytical view, let's analyse business management as a whole.
The ERP must be able to support you in decision-making and productive support at various levels:
- stock and inventory;
- supply chain
- resource management;
- production
- purchasing;
- sales and customer relations;
- tasks and projects;
- human resources,
- finance and accounting.
Why is ERP software modular?
The main idea is to reflect what the business is in practice. Just as in a company there are several areas, departments or processes, which are responsible for different activities, ERP has modules.
However, not every company has all the areas or processes, it varies according to the size of the company, the market in which it operates (for example, if you don't have any products or raw materials, why are you interested in inventory or stock management?) ERP developers have therefore created modules that can be integrated with each other as required.
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ERP and its terms
Over the decades, various terms have been used: some are no longer relevant, others want to express a different key concept. Let's qualify the key notions.
MIS
The Integrated Business Management System (IBMMS):
- uses common data to connect all functions and activities;
- assimilates and demonstrates its transactional data into usable information,
- standardises your data and standardises your processes.
You're right: we've just given you a different definition of ERP, because ERP or MIS, it doesn't matter, it's the same thing! It's just a question of language.
Open source
If you've heard of OpenERP, it's an open source ERP package: this means that the source code is open to developers. They can build modules based on this source code. OpenERP can be free to a certain extent, but, as is normal with open source solutions, support, maintenance and so on are not free!
Think before you decide: your operation and potentially your bottom line depends on it! What happens when open source is developed in foreign countries? Who guarantees fiscal and tax updates and certifies compliance?
Modular
Management software is good, integrated management software is even better: the modularity of an ERP means that it offers the possibility of activating only those modules that correspond to your needs. A good solution should be able to offer a range of modules to meet the expectations of small and large companies, but also be able to adapt to growth.
Generalist vs. by activity
Two segments: specialised ERP and generalist ERP. Faced with users' demand for constant adaptability, developers have created business management systems in order to be able to respond to all these demands, whether they are business-specific or not. A matter of common sense and logic: each company is concerned with its own management and needs.
Vertical
Vertical ERP software is a specific ERP solution for certain activities. The user has a pre-configured system to provide the right answers to difficult questions relating to a specific sector of activity. Reminder: some still don't cover all the functionalities of an ERP.
Which ERP to choose?
Budget and needs, as well as ease of use are criteria that filter the choices. The good news is that not only is technology evolving, but there are also several solutions from different suppliers. One thing is certain: it's becoming increasingly common for companies, even large ones, to adopt cloud-based ERPs.
Below we describe more relevant criteria to consider in your choice.
A functional, user-orientated ERP
The machine should serve man, not the other way round. When applying this principle, it is important that the system is easy and user-friendly; the implementation and adherence of an ERP within the day-to-day running of the company is fundamental to its success.
Modular
The ability to choose which modules you need and, consequently, will pay for, can make the difference in your choice. At the same time, if an ERP already has several modules, even if you don't use them now, it doesn't mean you won't need them in the future. In the end, whether or not to modularise can be a subjective choice, but also one of cost.
Unrestricted integration
The ability of a solution to communicate with others, whether through an API or even with export functionalities that other systems can understand, is crucial. There are currently tools that fulfil the role of integration only, which can be a solution if the ERP of your choice is not strong in this regard.
Business intelligence at the service of your business
Intelligence and business? A good ERP should provide important information, but also make it easier to analyse this information. Whether through pre-existing indicators, reports and graphs, or the ability to customise it in any way you like.
Bonus: 3 ERP systems for your company
If you've made it this far, congratulations. We've mentioned one, but we're going to show you 3 ERPs to get to know.
NetSuite, the #1 ERP in the cloud
NetSuite acquired by Oracle, a multinational with decades of experience in software development, NetSuite was one of the first companies to "work in the cloud" in the world. All this is to say that it is a tool that has excellent development behind it.
NetSuite is positioned as a solution for any size of company and in all sectors, due to its flexibility. NetSuite can help with
- Financial management;
- Financial planning
- Order management
- Production management
- Supply chain management;
- Purchasing;
- Inventory and logistics.
NetSuite
NuvemERP, complete and accessible
NuvemERP is focused on micro and small businesses. NuvemERP is a 100% online solution, meaning that all your data is secure and accessible from any device, time and place (as long as you have internet access).
With more than 3,000 companies registered, NuvemERP is certainly a tool that can help your business, complete and simple to use.
We've listed some of NuvemERP's functionalities:
- Stock control;
- Finance, accounts payable, receivable, cash flow, etc.
- Purchasing management;
- NF-e issuing, with SEFAZ integration;
- Reports to help you analyse;
- Sales;
- Shop/PDV module.
NuvemERP
ON.ERP, to bring results
ON.ERP has several modules. Management software that meets the requirements described in this article, to centralise (and integrate) all your company's critical information.
ONCLICK ERP stands out for its integration, so if you work with e-commerce, this may be the ideal solution for you. For example, the software has integration with the Post Office and Mercado Libre.
Some of the modules in the system:
- Purchasing;
- Stock;
- Financial;
- Sales
- Tax;
- Cashiering;
- Dispatch;
- CRM;
- Services.
Developed over many years and adapted to the most diverse requirements.
ON.ERP
After all, is it worth investing in an ERP?
Yes, an ERP system can make all the difference when it comes to managing and planning company resources. The potential to organise information and thus provide clear and accurate data is fundamental. Knowing what's going on inside your company, shop or enterprise is a matter of survival! It really is an investment and not a cost, because it will definitely pay you back.
Article translated from Portuguese