What Is ERP Software

What Is ERP Software?

Entrepreneur Magazine reports that ERP software can help business leaders take charge of their operations.

Everything from basic accounting to advanced manufacturing may see improvements after an implementation. The return on the investment, however, is in the eye of the beholder.

Some organizations may not have a strong business reason to move beyond QuickBooks and engage ERP services. For those who are still reading this article, you may have procrastinated long enough to know you’re missing out.

Stop wondering if ERP software solutions make sense for your organization by reading this article today!

ERP Software and What It Impacts

Defining what ERP systems do can get lost in the weeds. Software like this has so many functions that you can feel more confused than when you started. With that in mind, this section will focus on providing a brief description.

ERP stands for the following normal-sounding term: enterprise resource planning. The name doesn’t do this software justice, however.

In short, this software pulls data from all parts of your organization to manage and improve each department. For example, ERP for metal fabrication can unify the efforts of these types of functions:

  • Accounting
  • Supply Chain Operations
  • Procurement
  • Manufacturing
  • Distribution

While you may have become used to frustrating efforts to create unity of purpose in the past, that doesn’t have to continue to be the case. With the right partner, you can manage each piece without losing sight of the big picture.

How ERP Software Works for Different Industries

Stating that ERP software can unify the efforts of an organization is one thing. Proving that it can handle the intense workload is another! For real-life examples, consider how enterprise resource planning can impact the following types of industries:

Food and Beverage

Creating a uniform product in the food and beverage industry is more than a goal; it’s a requirement. If you’re involved in this type of business, the government expects you to have the ability to track down batches for recalls.

The U.S. Department of Agriculture and Food and Drug Administration has the authority to issue safety alerts or market withdrawals. Preparing for this not only protects businesses from liability. It also gives them the ability to improve quality.

Construction

Project accounting for construction companies alone presents enough challenges for any organization. As a result, tracking budgets and improving the efficiency of operations can feel clumsy at best.

Installing a manufacturing module can give advantages unavailable in less hardy accounting platforms. Additionally, with CRM integration, you can improve communication and customer satisfaction.

Healthcare

Some of the challenges a healthcare organization faces include inventory, accounts receivable, and payroll. While it may seem odd, bringing manufacturing functionality into the picture can offer savings.

Goal management for small or large players in the healthcare system often requires advanced software. Beyond the potential improvements to the bottom line, specialists can help keep companies HIPAA compliant and avoid other liabilities.

Benefits of ERP Software

Now that you have a definition of ERP and some real-world examples of its success, it’s time to jump into the details. After all, how could a costly implementation and software possibly solve your problems? Consider these benefits that businesses and non-profits in the U.S. have enjoyed for decades:

Improved Reports

Have you noticed that accountants in your company regularly want to tear their hair out over their reporting system? They’re certainly not alone, and many issues can find modern solutions using ERP software. Not only will you keep your accounting team happy, but you’ll also have the ability to plan more efficiently.

Reduced Costs

Despite the best efforts of your team, wasteful habits can find their way into the day-to-day.

Take a company that relies on ERP metal fabrication software into consideration. The bottom line each year depends on the synching efforts to control both internal and external costs. Adopting enterprise resource planning software can make this possible at all levels.

Challenges of ERP Software

While ERP has flexibility and savings to offer, the devil is in the details. Some companies may experience growing pains while they get the team on board with the changes. Some of the challenges users have identified over the years include:

Implementation Costs

Whether you’re considering cloud or on-premise ERP solutions, the upfront costs can cause hand-wringing even among the strongest supporters. To make matters even worse, defining your return on investment can feel murky at the best of times.

Unfortunately, there’s no way to identify an average cost for implementing ERP. Every organization has unique challenges and timelines that can change the final numbers drastically. The only way to address this is to create a plan that limits the risks of scope creep.

Cultural Changes

Even the most motivated members of your team can present resistance to change. In fact, one of the stickiest challenges has nothing to do with the ERP software itself. You will need to foster an environment that promotes enthusiasm for the cultural changes to come.

Maintenance and Updates

Ongoing expenses for your enterprise solution can go far beyond hosting or fees. At a certain point, modules or reports may outlive their usefulness. When this happens, you can find yourself needing expert advice to update the software.

Want to Know More About ERP Software?

After reading this article about ERP software, you should have an understanding of its purpose, benefits, and challenges. If you’re scheduling demos, salespeople will try hard to convince you that they can handle all three in spades. Continuing to educate yourself before the pitches start can go a long way toward keeping your sanity.

Lucky for you, there’s even more information and advice about enterprise resource planning on this blog. Discover more of the high-quality content you need by exploring more of our articles before you go!

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Christophe Rude

Christophe Rude

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