There are a tons of definitions we can come across online telling you

What is ERP?

Yet I am amused it is one of the most frequently asked questions we have to answer every time

So in this post..

I’m going to show you exactly what is ERP and how your, yes your organization can benefit from it.

And all that in the easiest way possible

As we know

By a 2016 study by Panorama Consulting Solutions which indicates that organizations implement ERP for the following reasons:

• To replace out-of-date ERP software (49%)
• To replace homegrown systems (16%)
• To replace accounting software (15%)
• To replace other non-ERP systems / had no system (20%)

So it is the best for all

If we understand what an ERP is

As we also know that

In a study by The Robbins-Gioia Survey in 2001

51 % viewed their ERP implementation as unsuccessful.

And one of the top reasons being

Poor Planning and Poor Management

So it is very clear that we shall address this topic here in easiest way possible and without delaying any further here we go

Lets begin..

When it comes to business management applications, we know your organization uses a few management tools.

For managing your inventory or

For managing your customers or

Handling your accounts for instance.

(Gone are the days we can manage our load of work with Excel sheets)

And usually all these applications works independent of each other.

Yes Ofcourse..

your Gmails do not populate your CRM automatically (in most of the cases)

Neither does your CRM lets you know if it is time to Order for supplies.

Each of your Business Application works wonderfully.. no doubts in that but they all work individually and independently.

So all boils down again to the question

What is ERP?  And how is it going to do any good to your business?

Let’s begin with decoding the acronym first,

ERP stands for “Enterprise Resource Planning”

so it means that an

ERP is a software solution for enterprises to better plan their resources,

I know it probably does not seem to mean anything to you

and I promised we will be dealing it all this in easy language today so basically

Without getting any fancy

It is when you use a business management software that has a number of business apps each for different aspects of your business and all these applications are connected to each other through a single thread.

if any activity in any one application should have a effect on any other application in the ERP,

it will all be done automatically (no big surprise here..just because of a single data center shared by each of the application.)

easy isn’t it ?

so this means in an ERP we use all applications individually and independently but we use a common area to store all the data so they work as in one big unit which we call the ERP

because of this

we don’t have to do the data entry again and again as we go from one application to the other.

Let’s make it more a lot more simpler

And compare it to your I-phones  (or your Android Phones )

It means that if an ERP would be an OS like Android or Ios and you are using all the apps necessary for your day to day operations

The new advantage now you will have is that unlike as in Android or Ios all the apps will be centrally connected.

So you create a Customer in your CRM and it is available in Sales, Accounting and Marketing Dept, without having to do anything else.

Your Sales Rep raises an Invoice and it is available to the Accounting dept in real time.

Your Logistics Dept delivers something and your inventory is adjusted itself.

Hmm , Interesting ..

To make things more clear.

Let’s see the before and after effects of an ERP in an Organization.

Before ERP Implementation

Let’s say all your organizations uses applications but not seamlessly connected to each other.

A customer approaches your Sales Rep to buy something out.

Your Sales rep then confirms the Warehouse Manager if the Inventory/stock is available or not.

In case not, the Warehouse Manager approaches the Purchase Manager to raise the PO for the same.

The Financial Accounting dept is informed separately (in many cases separate permissions are required form Account Dept)

Then the Inventory arrives.

Your Warehouse department updates the Purchase and Sales Department,

The Sales Dept reached the Accounts Department which then raises the Invoice to be sent to customer by the Sales Dept.

Then the customer is approached by Sales Representative.

And then your warehouse manager is asked by the Sales Rep deliver and delivery could finally happen.

This was a regular case scenario

But let’s say the customer is in urgency this time and has to decide between yours and a other vendor as well.

Your Sales Rep takes time as he needs to reach the Warehouse manager and in case the stock is not available on the spot, a total chaos takes place.

And BAM..!

The other vendor gets the Order.

Loss of revenue.

Loss of a Lifetime (Possibly) Customer.

Doesn’t sound like a good approach to me.

And this was the simplest example I could take,

Involve Manufacturing, Production Planning, Labor and Payroll Management in this and you can see situation becomes more complex at a whole another level.

Let’s take an After ERP Implementation case as well

After ERP Implementation

First of all a well round ERP Implementation means

A well connected organization.

So each department also has a limited allowed access to other departments (as per the organization’s work culture)

Now this time

A client approaches your Sales Rep to buy something out on an urgent basis

The sales team has real-time information access to the products inventory which is updated by itself on Delivery to any Customer by the Warehouse Dept as well as if Inventory arrives on Purchases.

So not only much time is utilized, it is done with least number of resources involved.

Within the conversation the deal can be fixed

And BAM.. the Sale is made.

And you just got an Edge over your competition.

Now just imagine this is just one example how an ERP may benefit your operations.

Sales Forecast, Automatic Purchase Orders, Automatic Email Feedback from Leads, Automatic Accounting due to all other accountable operations and what not, there is no end how much we can do with so less resources involved

Another major Advantage for CEOs and Organization’s Management (and I know this one is important to them) is availability of all this on their Mobile Devices as well. (Not just I-pads, Mobiles also)

Most of the ERPs these days are becoming Responsive as well.

So wherever you goes you get a real time information of all that is happening in your Organization (Even if you are in some other part of the world)

So coming to an end

Overall there can be “N” number of benefits of implementing an ERP, and this “N” isn’t a small number, so many that we can write another Blog Post about it.

We can literally go on and on about it

But we do not want to overwhelm you here.

We wrote an article covering 101 benefits of a CRM (or an ERP system) in detail (we are going to overwhelm you there).

Is ERP a fit for your Industry? Will ERP fit into your own business?

Another frequently asked question if ERP can fit into your industry or if an ERP can be built as per your industry work Culture?

To come to an answer to this, without taking any time further I would like to say …

Drum Rolls ….

YES

It’s a

Gone are the days (literally) when you have to adjust as per the software, if the system works in a certain way, you have to do it that way.

Now,

It is a generation of Customized ERP solutions.

Not only an ERP System can be built for you from scratch (not a great option to pick in many cases)

In today’s Era almost all the ERP systems can be Tailor made to fit your industry, fit your Organization and to make the transition from your Old Legacy system (or set of individual applications) as comfortable as it can be and this applies to almost all of them.

Only difference comes to the ROI for your investment.

Some of them gets customized with a huge investment

..coughs.. SAP..coughs..

And some might get customized in a more Pocket friendly way like Odoo, OpenBravo ect. (welcome to the Open Source Era)

Check out Latest Odoo’s features here.

So it is a big YES. ERP software fit your industry (no matter which industry you are in).

How to implement ERP for your industry?

As you know by now, What ERP is, and how it can benefit your organization the only question arises now is How to get it implemented for your business.

So to end this I would like to say

We created another resource about it, in detail, step by step at 12 steps to Implement an ERP.

Here is the 12 step approach

• Define Scope of Implementation and End Objectives
• Select an ERP System
• Create the Project plan
• Define phases of Implementation
• Make urgent but achievable Schedule
• Make a Communication Plan
• Arrange mid-way Approvals
• Plan your Testing
• Migrate Business Data
• Prepare for the change
• Plan your Go-Live
• Support and Maintenance

Details here.

We also covered the top reasons to why not all ERP Implementation succeeds and Steps you should never take while implementing an ERP.

Don’t forget to go through it. Enjoy

Here’s what to do next

Now if you have understood what an ERP is and you want to make the most out of its benefit,

Implement ERP in your Organization

Make sure to go download our Step by Step ERP Implementation guide. Its free and happening.

We tried an Out of the Blue approach to this topic What ERP is, Let us know your opinion about it in the comment box, so we can do more of this and don’t forget to share the love.