The first indicator that your company has gone from a simple mom and pop shop to a major power player is when you implement your first ERP system. ERP stands for Enterprise Resources Planning and essentially link in many back-office tasks and functions and allows you automate many of them.
While the terms and definitions of a true ERP system can vary wildly based on the industry and company you function within. However, there are certain standard features that outline just about all ERP systems. First and foremost, when considering a new ERP system, it must be an integrated system. Which means it could link together manufacturing systems with your Finance and HR functions. Items like invoicing become automated based on shipping receipts and things of that nature. Another important characteristic of an ERP system is that it works in real-time. Meaning your sales, deliveries, and shipments are updated as they come and go out the door. This is especially useful for large manufacturing companies that want to check their efficiencies on a daily, rather than monthly, basis. Consistency across the all the functions and modules is also a defining characteristic. If all the modules are structured in a similar format and functionality, then the training methods and usability are much easier for the entire organization.
Many companies often fall prey to complacency when it comes to existing ERP systems. The initial roll out and implementation of a new system can be costly and time consuming. However, if items such as master data aren’t maintained to the highest integrity it will result in the old “garbage in – garbage out” situation. These implementations can cost millions of dollars and it’s vital you get the most out of them. Training is another area where many companies can fall short. If you don’t have proper training from the get go then you most likely aren’t utilizing your Resource Planning system to its fullest potential. Usually the ERP systems creator will supply you with a training team that will help your organization for the initial launch phase. After a certain contractual period of time it is up to the receiving organization to take responsibility for their in-house training and hire staff trainers and a helpdesk that can assist with ongoing issues.
In today’s age of globalization you simply cannot get by without a comprehensive and integrative Enterprise Resource Planning tool. Both your vendors and your customers will come to expect this, and often times they will want to integrate their systems with yours in order to better manage inventory and deliveries.
