What is ERP (Enterprise Resource Planning)?

When it comes to defining ERP, if you ask 20 different people you will get 20 different answers. ERP is the acronym for Enterprise Resource Planning. The resources within the enterprise consist of human resources, financial resources, operational resources and asset resources.

If you are a manufacturer, selling, producing and delivering your product requires a variety of resources – you need people – people to sell the product, people to order the materials, people to track the materials, people to work the lines, people to ship the product, people to calculate the cost and profitability of the product.

You need financial resources – both the money necessary to keep lights on, machines running and employees paid. You need operational resources such as inventory, packaging and the like. You need assets like machines, forklifts, and furnishings.

The concept behind ERP is that if you have an accurate and timely view of all the resources at your disposal you have the ability to better manage those resources and operate profitably especially when utilizing software to house critical data, automate processes to be more efficient and at a lower cost, keep inventory at a optimal level and coordinate jobs to meet promised deliveries to your customers without eroding your profit margins.

The reality is that most businesses have a variety of systems that are not integrated (unable to share information) and managers rely on spreadsheets as a means of interpreting critical business data. The problem is – considerably more time is spent on collecting data rather than analyzing and acting strategically based on data.

Typically, an accounting system is residing in accounting; an inventory system is in operations; CRM is residing in Sales, and, as noted above, there is a constant scramble to pull information from each area of the organization to get a holistic view.

Why is a real-time, consolidated view of the company important? Consider the following: the good news is your sales people had a great month; the bad news when inventory is compared with the promise dates on the sales orders there isn’t enough lead time to order what is needed to fulfill every order. Or the good news is you have the inventory to fulfill the orders but the bad news is there are constraints in your workflow that will delay delivery. Or it could be that sales are down, but because you don’t have a complete financial view, you are unable to invest in marketing or sales promotions. We’ve seen instances where it appears that business is good, but actually new orders have been placed with customers who already have aged receivables.

Chances are you’ve experienced one or more of the scenarios mentioned above. You know how devastating those problems can be to the business. And, if you have multiple locations those problems begin to grow exponentially.

So why don’t more businesses adopt an integrated ERP system to address these issues?

Horror stories abound regarding ERP implementations: spiraling costs beyond the initial and substantial investment as well as extended implementations taking years only to result in the system being obsolete before it ever goes live. Very few companies can afford the enormous drain on their business that purchasing and implementing a tier one ERP system can cause.

However, there are alternatives. Sage ERP MAS 500 is a midrange system that we’ve implemented for many customers. The appeal that Sage ERP MAS 500 has to these companies is that they don’t have to sacrifice functionality (it is powerful enough to address their business needs), they don’t have to spend the staggering amount of money associated with a tier one system, and we can get them up and running in roughly six months time (some implementations require less time, more complicated implementations require more time).

We also provide a Spanish-language version of Sage ERP MAS 500 that works wonderfully for companies with divisions and subsidiaries in Spanish-speaking countries in the Caribbean and Latin America. This is further augmented by our staff of bi-lingual consultants, technicians, support staff, and trainers.

These companies have been able to control and coordinate their resources in a much more efficient and profitable way – allowing them to grow rather than hang on for dear life through the ups and downs of operating with incomplete information.

Decreasing the stress of constrained operations, increasing customer satisfaction, and enjoying the outcome of more profitable operation are all good reasons to investigate ERP automation for your business.