What is ERP?
Whereas spreadsheets are a picture in time based on when the owner began their calculations, an ERP is a never-ending movie that allows authorized users to view any data point at any time. Would you like to see report data in real-time? Done. Want to view future scenes/scenarios? Predictive analytics can help you consider different endings to find your team’s best business outcome. Ready to find out what else an ERP can do?
Definition of ERP
ERP stands for enterprise resource planning. Based on the first word of ‘enterprise’ in ERP, you might assume that ERP software is only helpful for large organizations, such as IBM, Microsoft, and others. That is not the case. Suppose your company would like to manage and integrate all its essential business functions into one system, improving efficiency while reducing costs and increasing revenues. In that case, your company will likely be an excellent candidate to reap the benefits of installing an ERP system.
What can your organization do with an ERP system?
An ERP system is handy. You can use an ERP to manage all your business processes in one place, often in real-time. Company organization is enhanced, data silos are gone forever, and insights can be discovered faster with an ERP system.
ERP systems are an upgrade from spreadsheets. While spreadsheets provide historically accurate information dated to the time the analysis began, your ERP’s business intelligence will give a precise picture of the current conditions and trend insights. Using a car analogy, spreadsheets provide an excellent rearview mirror view, while an ERP provides both vivid dashboard and rear mirror views.
What does a working ERP look like for you and your users?
With an ERP, all your data is in one place. That doesn’t mean that each ERP user has the same window into the data or sees all the data. For instance, you probably wouldn’t want your sales assistant to see the same view as your chief executive officer, would you?
To your end users, a good ERP will provide a home page specific to their role in the organization, equipped with customizable widgets for the functions they perform regularly. Key performance indicators (KPIs), workflows, reminders, and reports are configured on the user’s dashboard. Role specificity typically equates to productivity increases as well as user satisfaction. And regardless of the user’s role and individual function in the organization, the underlying data remains the same.
To you, the ERP will also provide a tailored dashboard, all the capabilities of the other users, and real-time business intelligence that enhances your ability to pivot with changing economic and competitive conditions. A good ERP is for you if you value the predictive knowledge gained by performing ‘what if analysis, generating reports using real-time data, and closing consolidated books in minutes. The inevitable question is, what constitutes a ‘good ERP’ for your company? To better understand this topic, you will need to learn a little about the different ERP types.
ERP System Types: On-Premises, Hybrid, and Cloud
On-Premises ERP | Hybrid ERP | Cloud ERP
The original ERP systems were installed on a company’s data center servers. This on-premises model relies on a company’s IT department for maintenance, performance, licensing, and upgrades. This model is still appropriate for some industries whose large enterprises have heavy data volumes that can be transacted faster locally than through uploads and downloads from the cloud. Some Fortune 100 companies are good examples of this. Smaller companies may prefer this model if they need greater than cloud speed for high transaction counts. Grocery chains are an example here.
As the benefits of Cloud ERP became more evident, some companies elected to host their ERP software on shared, cloud-based data center servers. This allowed them to capture some of the advantages of the cloud. However, under this model, the client company is responsible for purchasing, owning, and upgrading the software. The client is also responsible for security. Last, because the software and hardware are not shared with other users, there are still substantial costs for system upgrades.
Cloud ERP systems are rapidly replacing on-premise, and hybrid solutions run in the cloud as a SaaS (Software as a Service). Of new ERP purchases, approximately 90% (1) are cloud ERP implementations. They work with a combination of technologies connected by high-speed internet networks. As modern technologies continue to increase internet data speeds, it is a sound prediction that cloud ERP systems will soon be an option for any organization. The cloud ERP is constantly online and accessible to Internet-enabled users on mobile devices or desktop computers. Because cloud ERP solutions empower users with access to information required to do their jobs anytime, anywhere, they are the ideal solution for today’s mobile workforce.
A cloud ERP makes it easier and more secure for businesses to manage their information. These systems are maintained by a company specializing in the upkeep of servers, databases, and security. Once installed, the cloud ERP’s costs are more predictable because the ERP vendor typically charges on a subscription model. A growing business can take advantage of this model instead of being hindered by server and software upgrade costs as it would with an on-premise solution. This service makes it easier to scale as your business grows.
What benefits will you see from a cloud ERP system?
Predictable operating costs through subscription pricing models – There is no need for extensive IT upgrade projects when business needs change.
Lower IT costs and reliance on in-house IT personnel. Your vendor is required to maintain your system instead of your IT personnel.
More flexible and adaptable solution – Instead of business changes dictating major IT upgrade projects, you can call the cloud vendor to adjust the technology if needed.
Real-time business intelligence – All your data is in one system that is always up to date.
Anytime, anywhere, 24/7 access empowers work-from-home users – As long as your employees have internet connections and browsers, they can access the information needed to do their jobs as if they were in the office.
Best for new business ventures and growing businesses – Costs are low compared to purchases of IT equipment necessary with on-premises solutions. Growing companies can scale up quickly with few, if any, changes in system costs.
Why NetSuite ERP? The original cloud system, NetSuite ERP, provides a solution that is never outdated and helps you manage every business department from within NetSuite itself. When you choose NetSuite ERP from Softype, you can say goodbye to multiple management systems, broken integrations, and costly IT maintenance costs.
For more information, please read Why NetSuite ERP.
References: (1) ERP Statistics, G2, January 22, 2021 by Rajendra Roul
