Enterprise Resource Planning (ERP): A Couple of Frequently Asked Questions

Among the many questions we get from clients and potential customers who are searching for an ERP solution, there are three we can count on hearing every time:

Is there a difference between ERP and accounting software?

Generally speaking, accounting software handles only business functions relating to the financial operations of a company, whereas an Enterprise Resource Planning (ERP) package is used to manage the entire range of business functions of within an organization.  An ERP system is a fully integrated business management system covering functional areas like Finance, Supply Chain, Human Resources, Sales, etc. ERP systems are made for organizing and integrating operational processes and information flows to make the most efficient use of resources such as people, materials and equipment.

A good ERP system should enhances a manufacturer’s ability to accurately schedule production, fully utilize capacity, reduce inventory, and meet promised delivery dates.  Project-based companies, such as consulting or construction firms, might have additional needs around cost tracking and/or regulatory reporting.

What steps are involved in a full ERP Implementation lifecycle?

Accountnet recommends starting every project by:

(a)   assessing the potential solutions and

(b)   coming up with a shortlist of products for testing.

Preparing for the venture involves:

(c)    conducting a gap analysis and

(d)   thinking about any required business process reengineering that might need to be completed prior to

(e)   designing the system

Once a basic plan has been mapped out, it’s advisable to:

(f)     bring in the team that will provide in-house guidance for the vendor. Stakeholders should include the lower level employees who will be using the system on a daily basis as well as any responsible managers.

(g)    Preparing the employees to use the new ERP is vital to its success.

How can ERP systems improve company’s performance?

ERP Software | Accountnet | New York, NYThe idea behind ERP is to consolidate all business data in a central repository where each department or staffer can see and access the information that is important to them in their role.  When a salesperson receives an order from a customer, he or she should have all the necessary information to complete the order. When the department responsible for fulfilling the order has finished their work, the order is automatically routed via the ERP system to the next department for the next process. In this fashion, the order process operates smoothly with the fulfillment process, so customers get their orders faster and with fewer errors. ERP extends this particular application to the other major business processes, such as employee benefits and financial reporting.

In a nutshell:

  • ERP facilitates company-wide, integrated information sharing covering all operations areas of a business such as manufacturing, sales and distribution, accounting, human resources and inventory. Business process automation and information sharing happen in real-time, increasing productivity and improving customer service.
  • ERP bridges information gaps across a company and focuses on key issues such as productivity enhancement, customer service, cash management, inventory, quality control and prompt delivery.
  • ERP can improve project management, and can provide for information sharing not only across departments, but also across companies under the same management.
  • ERP can include business intelligence tools like data-mining, early-warning systems and robust reporting, enabling people to make better decisions and improve business processes.
  • ERP addresses not only the current requirements of a company, but can also provide insights and opportunities for improvement and refinement of business processes on a continual basis.

To learn more contact us for a free phone consultation.