Learning guide

Beginner’s guide: What is ERP software?

At its core, Enterprise Resources Planning (ERP) refers to a type of software and integrated suite of applications that organizations use to manage and automate core business processes and functions across different departments and/or sites. We call ERP the beating heart of the business because the software system provides the functions, intelligence, and automation to efficiently run all day-to-day business operations. Typically, ERP software covers areas such as finance, human resources, manufacturing, supply chain management, customer relationship management (CRM), and inventory management.

What are the overall benefits of ERP software?

Basically, the purpose of ERP software is to help organizations improve productivity, make data-driven decisions, enhance collaboration, and achieve better overall efficiency. ERP systems are designed to provide a centralized and comprehensive view of an organization's data. This enables efficient management of resources, processes, and information. Therefore, as much data as possible should reside in the ERP system to ensure a single source of truth across the entire business.

Strategic decision-making: ERP provides executives and decision-makers with data-driven insights, enabling them to make informed and strategic decisions for the future of the business.
Improved efficiency: ERP systems integrate various business processes, eliminating the need for manual data entry and reducing the likelihood of errors.
Automation of routine tasks: ERP automates tasks and processes, thereby freeing up employees’ time to focus on more strategic and value-added activities.
Long-term cost savings: ERPs reduces both operational and administrative costs by streamlining processes, enhancing planning, optimizing financial management, and boosting customer satisfaction.
Single source of truth: Centralizing data ensures data consistency and reduces the time spent searching for information across disparate systems.
Real-time Information: ERP provides real-time insights into business operations, allowing quick and informed decision-making.
Better collaboration: With a common database, teams across the organization have access to the same up-to-date information, fostering collaboration and improving overall communication.

Who is ERP software for?

ERP software is designed to benefit a wide range of businesses and organizations across various industries. All businesses have different ways of doing business, and therefore, the ERP software is being tailored to fit their specific needs, according to industry segments, size, and international representation.

Here are the key stakeholders and types of organizations for whom ERP software is beneficial:

Manufacturing companies: ERP software is particularly well-suited for manufacturing organizations. It helps manage inventory, production planning, supply chain, quality control, and other processes involved in manufacturing operations.
Distribution and supply chain companies: Organizations involved in distribution and supply chain management benefit from ERP systems by optimizing inventory levels, order processing, logistics, and demand forecasting.
Retail Businesses: Retailers, both brick-and-mortar and e-commerce, use ERP systems to manage inventory, sales, customer relationships, and other aspects of their operations. This helps improve efficiency and customer satisfaction.
Service-based Industries: ERP software is relevant for service-based industries, such as professional services, consulting, and healthcare. It helps manage projects, resource allocation, billing, and other service-oriented processes.
Financial Services: In the financial sector, including banking and insurance, ERP systems assist in managing financial transactions, compliance, risk management, and reporting.
Global Organizations: For companies with global operations, ERP systems facilitate coordination and standardization of processes across different locations. They help overcome challenges related to multiple currencies, languages, and regulatory requirements.

How does ERP benefit the different business teams?

The finance team applies ERP systems to automate financial tasks such as accounting, budgeting, invoicing, and payroll, reducing manual errors and saving time. ERP provides real-time access to financial data, enabling timely and accurate financial reporting and analysis. Also, ERP systems often include features that help ensure compliance with regulatory standards and financial reporting requirements.

The supply chain management team uses ERP systems to help track orders and shipments, optimize inventory levels by providing real-time visibility into stock levels, demand, and supply chain activities. ERP facilitates better communication and collaboration with suppliers, improving procurement processes and reducing lead times.

The manufacturing team applies ERP for production planning by optimizing resource allocation, scheduling, and capacity management. ERP systems often include features for quality management, ensuring adherence to quality standards and facilitating defect tracking and resolution.

The sales and marketing team uses data analytics and reporting tools that aid in sales forecasting and performance analysis. Further, ERP systems often include CRM modules that help manage customer information, track sales leads, and improve customer interactions.

The IT team reduces the need for multiple standalone applications as ERP systems integrate various business processes. ERP systems often come with robust security features, helping IT teams ensure data integrity and protect sensitive information. Also, ERP systems are designed to scale with the growth of the organization, providing flexibility and adaptability to changing business needs.

The human resources team applies ERP for integrated HR processes, such as recruitment, onboarding, payroll, and performance management, streamlining HR processes and reducing administrative burdens. ERP provides insights into workforce data, helping with strategic planning, talent management, and succession planning.

ERP vs Spreadsheet

Can ERP software replace spreadsheets for even the smallest businesses?

Today, ERP software benefits even the smallest businesses. If you have a growing company where connected information and functionalities across all operations make sense, you can at a very low cost enjoy the many benefits of ERP and forever skip the hassle of using spreadsheets.
Small business ERP tools are typically in the cloud and are quick to install.

ERP software offers several advantages over using spreadsheets:

Data management, information sharing, and collaboration happens in real-time across an entire organization vs. simple data management and no integrated functionality.
Integration of various business processes vs. standalone files that may not easily integrate with other systems.
Scalability to handle large volumes of data and support complex business processes vs. risk of errors as volume of data and complexity increases.
Data accuracy and consistency by maintaining a single source of truth vs. manual entered data that can be manipulated. This increases the likelihood of errors and inconsistencies.
Robust security features and access controls vs. lack of access controls and security features making it more challenging to manage and protect sensitive business data.

What are the key modules in ERP software?

Why are they interesting? Do I need to have all modules in the world? Can I start small? Can I add later?

ERP modules are components or functional units within an ERP system that address specific business processes or functions. Each module focuses on a specific area of business operations and is designed to work seamlessly with other modules within the ERP system.

The appeal of ERP modules lies in their ability to centralize and automate various business processes, resulting in improved efficiency, collaboration, and data accuracy. Implementing ERP modules can lead to better visibility into business operations, enhanced decision-making, and increased overall productivity.

You do not need to implement all ERP modules at once. Starting small and gradually expanding is a common approach. This is often referred to as a phased implementation. Beginning with core modules that address immediate business needs allows for a smoother transition and helps users adapt to the new system gradually. As the organization grows or evolves, additional modules can be added to address new requirements or enhance existing processes.

Finance and accounting

General Ledger: Manages financial transactions and provides a centralized view of the company's financial position.
General Ledger: Handles the processing of payments to suppliers and vendors.
Accounts Receivable: Manages customer invoicing and tracks payments received.
Fixed Assets: Tracks and manages the organization's fixed assets, such as property and equipment.

Human Resources (HR)

Human Resource Management System (HRMS): Manages employee information, payroll, benefits, and other HR-related processes.
Recruitment: Facilitates the recruitment process, from job posting to candidate selection.
Training and Development: Tracks employee training programs and professional development.

Supply Chain Management (SCM)

Inventory Management: Tracks and manages inventory levels, helping to optimize stock and reduce carrying costs.
Order Processing: Manages the end-to-end order fulfillment process, from order entry to shipment.
Procurement: Streamlines procurement processes, including vendor selection, purchasing, and supplier relationship management.

Manufacturing

Production Planning and Scheduling: Helps plan and schedule production activities to optimize resource utilization.
Quality Management: Manages quality control processes and ensures compliance with quality standards.
Shop Floor Control: Monitors and manages activities on the shop floor in real time.

Customer Relationship Management (CRM)

Sales and Marketing: Manages customer interactions, leads, and marketing campaigns.
Customer Service: Tracks customer support requests, manages service contracts, and enhances overall customer satisfaction.

Project management

Project Planning: Helps plan and schedule projects, allocate resources, and monitor progress.
Resource Management: Manages the allocation and utilization of resources across projects.

Business Intelligence (BI) and reporting

Reporting and Analytics: Provides tools for generating reports and analyzing data to support decision-making.
Dashboards: Offers visual representations of key performance indicators (KPIs) for quick insights.

Integration and Data Management

Data Integration: Facilitates the exchange of data between different modules and external systems.
Master Data Management: Maintains a central repository for key business data to ensure consistency across the organization.

Compliance and Risk Management

Regulatory Compliance: Ensures adherence to industry regulations and standards.
Risk Management: Identifies and manages potential risks to the organization.

Security and Access Controls

User Authentication: Ensures secure access to the ERP system with user authentication.
Access Controls: Defines roles and permissions to manage user access to specific functionalities and data.

Should you opt for cloud ERP or on-premises ERP?

Traditionally, ERP software has been installed on premises in companies as it is important to so many departments. However, with more complex business processes and more different users accessing the different applications, ERP is today an obvious choice for cloud implementation.

The reasons for still hosting applications on-premises are often security concerns or regulations that prevent you from storing personal data in the cloud. However, we recommend cloud ERP.

A cloud solution lowers initial costs, scales easily, updates automatically, allows you to access your ERP from anywhere and anytime. Further, cloud ERP providers handle much of the IT infrastructure and maintenance tasks, reducing the burden on your internal IT team. This allows your team to focus on more strategic initiatives rather than routine maintenance.

On-premises ERP gives organizations more direct control over their data and infrastructure. This may be a critical factor for businesses with stringent data privacy and compliance requirements. On-premises ERP solutions may also offer more extensive customization options. However, on-premises ERP may involve higher initial costs.

Ultimately, the choice between online ERP and on-premises ERP depends on your organization's unique needs, budget, and strategic objectives. Some businesses may opt for a hybrid approach that combines elements of both deployment models, known as a hybrid cloud solution, to leverage the benefits of both.

How do you get started with ERP software?

BE-terna helps you get properly started, so that you get everything right from the very beginning. We have the superpowers to assist all kinds of ERP projects, in particular the most challenging ones.

Define your objectives and needs: We help you define the objectives and goals that you want to achieve with ERP. This may be improving efficiency, reducing costs, enhancing customer service, or streamlining processes. We also conduct a needs assessment to identify the specific needs of your organization. We do this by evaluating existing processes, workflows, and pain points.
Choice of ERP solution: We offer different ERP solutions. We customize and configure the solution to fit your industry and your specific business needs and goals.
Cost-benefit analysis and realistic budget: We help you assess the costs associated with implementing and maintaining the ERP system, including licensing, training, and support. We also assist you in developing a comprehensive budget that includes not only the initial software costs but also expenses related to implementation, customization, training, and ongoing support.
Deployment options: In this phase, we decide whether to opt for on-premises, cloud-based, or hybrid deployment. We consider the advantages and challenges of each approach based on your organization's specific requirements, resources, and IT infrastructure.
Customization, configuration, and data migration: As your trusted partner, we are experts in customizing and configuring the system to meet your specific business needs. This may involve adapting workflows, creating custom reports, and integrating the ERP system with other existing software. We also plan and execute the migration of data from existing systems to the new ERP system.
Training and Change Management: We provide comprehensive training to employees who will be using the ERP system. We also help develop a change management plan to help employees adapt to the new processes and technologies.
Pilot Testing, rollout, and monitor: We conduct a pilot test with a small group of users to identify any issues and make necessary adjustments before full deployment. We implement the ERP system across the entire organization, and we monitor its performance and gather feedback from users to address any issues promptly.
Continuous improvement, support, and maintenance: We help you establish a process for ongoing evaluation and improvement. We regularly review the performance of the ERP system, gather user feedback, and make necessary adjustments to optimize its effectiveness. We offer ongoing support and inform you of all new features and updates that can benefit your organization.

Discover our ERP solutions

We will help you to find your perfect fit.

Dynamics 365 Finance and Supply Chain
Dynamics 365 Business Central
Infor M3