At its heart, the enterprise is a collection of resources: human resources, technology resources, intellectual property. And the larger the organization grows, the more difficult it is to manage and track those resources, let alone optimize them for the most profitable return.
This is why many organizations have turned to Enterprise Resource Planning (ERP). More than just an organizational tool, ERP gives the enterprise an unprecedented ability to streamline the business model by coordinating resources and processes in ways that are not possible under previously segregated data ecosystems. In other words, ERP is the primary means of eliminating the data silos that hamper productivity and drive up costs.
Top ERP Picks
Acumatica Cloud ERP
Microsoft Dynamics 365 ERP
Priority Software ERP
Top ERP Systems Comparison Chart
Best ERP Software Buying Guide
What is ERP?
Cost of ERP
Types of ERP
Importance of ERP Software
Built on Acumatica’s cloud-based xRP platform, the company’s ERP solution oversees finances, manufacturing, distribution and other roles, allowing users to focus on higher-level strategic activities. The system offers pre-integration with multiple third-party products under a flexible, all-inclusive licensing model that is calculated according to resources consumed, not users.
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Deltek offers a suite of products designed for key work environments. Its CostPoint system, for example, covers accounting, financial, HR and other tasks, while the Vision system automates project scheduling, budgeting and forecasting. Overall, the platform provides a centralized management system that is both intuitive and multi-functional.
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Microsoft rolled its Dynamics AX ERP solution into Dynamics 365 in 2017, where it became the Finance and Operations module. The platform aims to synchronize cost structures, logistics and other functions with both human and technological resources in order to streamline processes and improve results.
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ECount is user customizable for things like transaction types and input and output types, and features a usage optimization tool that manages statements and authorization. It also provides multi-location management and settings for individual countries to accommodate different languages and regulatory requirements. As a full cloud solution, no installation is necessary.
Infor offers ERP services under its CloudSuite bundles, which are tailored to key industry verticals like manufacturing, retail and health care. The company claims it provides deep understanding of each industry’s needs, so there is no need for further customization. The services are hosted on AWS, which enables rapid deployment, while Infor provides 24-7 support via voice, email, chat and social media.
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EnterpriseOne provides a full suite of modular, pre-integrated applications designed for specific vertical industries such as manufacturing and consumer products. The web-based software provides full integration with databases, web servers, reporting tools and other third-party solutions, including operating systems.
As a cloud solution, NetSuite is designed for scale and adaptability. The platform offers advanced financial management and planning tools, as well as order processing, production, warehousing and procurement capabilities. Its built-in intelligence engine combines raw data with visual analytics to provide easily digestible reports on current conditions and emerging opportunities.
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Odoo is an open source solution that features a collection of more than 10,000 community-developed applications, such as inventory management, financial tracking and project organization. In this way, new services and capabilities can be added without complex integration challenges, providing a fully scalable solution that evolves according to user needs.
Jonar bills its cloud-based ParagonERP as full-featured, easy to use and easy to deploy. It follows a simple pricing model for all features and updates, with no hidden costs and no commitments. Modules include financing, manufacturing, logistics and purchasing, and it includes a flexible, configurable interface to accommodate individual preferences.
PeopleSoft is a comprehensive business solution designed to increase productivity and accelerate activity under a low-TCO framework. The system features a flexible UI that caters to casual and in-depth users, as well as a high-performance analytics engine that can be customized to a wide range of user requirements. It also provides code-free configuration options with streamlined navigation and activity processes.
Priority’s portfolio consists of multiple modules offering financial, supply chain, customer service and other functions, and it recently added a mobile application generator that allows organizations to craft their own tools that synchronize to core systems. The platform is designed to integrate with existing enterprise software assets.
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S4/HANA is built on SAP’s HANA in-memory platform to digitize and optimize finance, supply chain and other processes. The system provides visibility across resources and processes and leverages machine learning and other tools to continuously improve logistics, asset management and other functions. It also provides GDPR-compliant data protection and integrates with the SAP NetWeaver platform for user-managed access and authentication.
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Sage ERP comprises a number of cloud and on-premises solutions, some of which are tailored to specific roles like accounting and business management. As well, the company has devised vertical solutions catering to construction, manufacturing and other industries. All solutions provide an integrated knowledge base that can be applied to the full process chain, from procurement and development to sales and service.
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Syspro is a modular solution that can be deployed on-premises or in the cloud and can be accessed via mobile device. Application offerings include manufacturing, distribution and finance management, and feature advanced reporting, planning and workflow automation capabilities that can be tailored to novice, intermediate or advanced users.
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The best ERP systems feature everything from open and cloud-based solutions to highly tailored systems for key vertical industries. Their purviews extend to everything from product development and delivery to finances, strategic planning and human resources. In virtually every case, the goal is to assume many of the rote, predictable functions under an automation scheme, allowing knowledge workers to concentrate on creative planning and higher-level activities.
One of the more significant challenges in selecting an ERP solution is identifying their cost structures. While some products use a flat fee or per user/per month approach, many employ a variety of pricing options depending on the depth of service required. A standard package, for instance, can be augmented with multiple modules overseeing accounting, warehousing and shipping, all of which can be mixed and matched to hit a price point that fits the enterprise budget. And even this rate can vary from month to month if the platform is being consumed as a service.
As with most forms of software these days, ERP is also benefiting from machine learning and other forms of artificial intelligence. This affords them an even greater ability to parse complex data sets and gain deep visibility and understanding of business processes and the resources they utilize. Ultimately, this is expected to elevate ERP beyond a mere tool to become a full contributor to the business model, capable of finding opportunities that were previously hidden and making recommendations as to future courses of action.
Enterprise Resource Planning has quickly grown from a luxury item available only to the largest and most complex organizations to a necessity for even the most rudimentary data environment. Along the way, however, it has also evolved from a relatively simple means of managing the growth of systems and platforms to a highly integrated solution encompassing physical, virtual and cloud deployments, as well as multiple software stacks, product development, logistics and even the knowledge workforce.
Given all of these moving parts, it has become difficult to ascertain what is crucial in any given ERP deployment and what can be considered superfluous. And perhaps even more challenging is the need to integrate ERP into legacy environments rather than rebuild the functional core of the business model in order to implement someone else’s vision of efficiency and productivity.
The first question to ask when evaluating any ERP solution is: What is this technology supposed to do? In a nutshell, ERP is intended to bring order to the business process by aligning key objectives with any and all resources at the enterprise’s disposal: the tighter the integration, the more efficient the process and, hopefully, the more productive the enterprise.
The reality can be quite different, however. Even small operations, such as a doctor’s office or a parts supplier, can have complex operational burdens, everything from multiple partner/client relationships to multi-layer regulatory frameworks. In most cases, the individual processes governing these functions have evolved organically to suit highly targeted objectives, while at the same time they exist in distinct spheres with little to no concern over how they affect other processes or overall functionality as a whole. Most knowledge workers, meanwhile, have grown accustomed to this state of affairs, even overlooking times when their own workflows are more complicated or cumbersome in order to accommodate the needs of others.
Learn More: What Are the Key ERP System Modules?
To overcome this inertia, therefore, the enterprise needs a clear strategy that stresses the eventual integration of multiple processes without too much disruption to the business model. Any change of this magnitude will disrupt something, of course, so the challenge will be to foster a gradual implementation that begins with measurable improvements in targeted areas, such as finance or supply-chain management. Ideally, this should produce a more streamlined workflow for employees that also results in a positive outcome on the backend – something like a noticeable cost reduction or faster time to completion.
From there, the system can be expanded to other areas, with a typical roll-out encompassing back-office functions at first so that the enterprise builds up a sizeable knowledge base of what works and what doesn’t before attempting to alter core functions like sales and marketing. Along the way, of course, executives will have to make a number of hard decisions, many of which will please some knowledge workers while disappointing others. Change is difficult, after all, and while attempts to streamline operations will ultimately deliver greater worker productivity, some will invariably view it as a means to cut labor.
From a platform perspective, ERP is evolving along multiple tracks, offering a variety of deployment models, features and integration choices. Gartner analyst Chris Pang notes that the ERP sector generated $31 billion in sales last year, and 11 percent growth, and that $34 billion is not out of the question for 2018. Much of the recent activity is due to scaled up SaaS deployments, which are now close to overtaking traditional license and maintenance revenue models.
Going forward, it seems unlikely that many ERP deployments will not incorporate some level of cloud support using public, private or hybrid resources. The top challenge here is to determine whether a given solution is optimized for the cloud or is simply a hosted version of a traditionally licensed platform. Cloud resources are consumed differently from those found in the traditional data center, so even though a repurposed solution may function perfectly well in the cloud, it might not be operating at an optimal cost/resource level.
Even with a cloud-native solution, nailing down the full cost can be difficult. Many solutions feature variable pricing models depending on the complexity of the deployment. Basic packages may require a flat fee or a per user/month calculation, but these can be augmented by various tools and modules targeting specific processes, like accounting. While this makes it easier to foster a gradual deployment scheme as described above, it leads to the very real possibility that final costs will not be known until the transition is complete, and even then it will likely fluctuate over time as business activity ebbs and flows.
Other platform considerations include whether to go with a proprietary solution or an open-source system, and whether a general-purpose offering will provide superior service than the growing number of vertical releases hitting the channel.
The open vs. proprietary debate is the same as it has always been: If you have the skills to manage and integrate software on your own, an open solution might be cheaper; if not, it’s probably best to partner with a good provider.
The jury is still out on the GP vs. vertical question. No doubt, vertical solutions have their champions, but most of these platforms are still too new to make any informed decisions as to whether they provide an intrinsic value for a given process. Billing is billing, after all, regardless of whether the product is sneakers, oil or a life-saving medical device.
Despite its complexity, ERP is likely to remain a key business asset going forward simply because today’s digital marketplace is merciless when it comes to driving out waste and inefficiency. Organizations that lose time, money and overall cohesiveness in the hand-off of workflows from one process to another will quickly find themselves out-performed by those who can craft a more streamlined operation. The individual gain from any given improvement may be miniscule, but replication over time in an increasingly scaled-out environment can deliver a substantial competitive advantage.
At the same time, a more integrated series of processes also makes it easier to incorporate new workflows designed around new products, new markets and even entirely new business models. So putting an effective ERP solution in place is not only smart business for today but can help propel the enterprise into the economy of tomorrow as well.
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