ERP Systems: The Definitive Manual
Understand the usefulness of enterprise resource planning, know its benefits, and learn how to choose the right one for your business.
What is ERP?
ERP is an Enterprise Resource Planning (ERP) system that is responsible for storing data, interconnecting departments and procedures of a company. ERP systems are organized in a modular way (eg, Financial module, Inventory module, Sales module, etc.) to absorb and transmit the most diverse information that is produced within a corporate environment.
With this, it is possible for a company to gather in its software the accounting data, its inventory worksheet, accounts receivable and payable, commercial orders, contracts and all other information that the various sectors produce and need to consult at all times.
With the advancement of technology and the availability of information resources, ERP systems are no longer a management option for large corporations, and today they are available for businesses of all sizes. With a high and varied supply, you have to look closely at the options available to ensure that the solution you choose brings the expected return on organization and productivity.
Find out the best ERP solution for your business.
What is an ERP system for?
An ERP system has many functions, but it is possible to say that its main objectives are to reduce costs, reduce the time in search of corporate day-to-day information, agility in executing internal processes, help in making decisions and rework prevention.
A good ERP will record information from customers, suppliers and employees, products, sales and purchase orders, accounts receivable and payable, cash flow, that is, data common to any business, and may have specific fields for certain businesses, such as the production listing of a factory yard, depending on the level of customization of the contracted system.
It is through a database fed correctly in an ERP environment that it is possible to do the analysis of the best selling products, the most purchased inputs, the largest and / or most profitable customer, in which periods of the year are sold more, what margin business profit etc.
It is possible to solve several problems that plague the daily life of a business with organizational difficulties, such as accounts that end up being delayed by the forgetting of dates, generating additional costs of fine and interest; lack of necessary inputs to the solutions and products marketed by the company, which causes the delay in delivery times and, consequently, the customers’ dissatisfaction; the accumulation of information in various spreadsheets in paper or Excel, which generates confusion, incorrect data and rework.
Depending on the business model of the activity, it is clear that there may be several problems generated by the lack of systematization of the data, but the choice of an appropriate ERP is the solution to concentrate these responses in a single information center.
What are the benefits of using an ERP system?
By hiring an ERP compatible with your business model, a company will see improvements in every industry and clear results of cost and time reduction.
By analyzing the cash flow generated by the correct feeding of the Sales and Purchasing modules, it will be possible to observe the periods of oscillation and design strategies based on long-term data. When it still depends on handwritten notebooks and records, it is common for planning to be done based on a horizon of a few weeks or months, resulting in choices that are ineffective when applied over large periods. When using an ERP system, the decision making will be based on the observation of the movements by the time periods in which the plan is to be applied (eg, bimester, semester, year, etc.).
The gain in process control and standardization is enormous because the data is generated in a logical order. If we take as an example an equipment maintenance company, it is possible to observe the movement of information from the moment the customer is registered by the attendant, with all his fiscal data, as well as the data of the equipment brought to the laboratory analysis . The technical staff will add a budget to the open service order, and that after approval will generate a move in the accounts receivable plan. In this case, since the customer was registered, his information was inserted and managed by different sectors, but always following a pattern that is made possible by the concentration of everything in the same software.
Statistically, you can see incredible gains such as:
-Increase in Productivity (26%);
-Reduction of Personnel (27%);
-Increase in Revenue (11%);
-Improvement in Logistics (9%);
-Cash Management (11%);
-Reduction of Costs with Information Technology (14%);
-Streamlining of the Financial Closure (19%).
* Data collected in the work of Colangelo Filho
These are incredible benefits when you take into account the wide competition of the market and the search of the customers by suppliers bureaucratized and with high organizational standards.
Depending on the ERP solution you adopt, you can gather all this information in a cloud environment, thanks to cloud computing technology. Thus, it is not necessary even if the company has a Complex Data Processing Center (CPD) with various servers and technological inputs, which require time and investment. By deploying an ERP system that works in the cloud, all data will be allocated on servers under the responsibility of the contracted provider, in a true information technology outsourcing. That is, even the type of ERP chosen influences the types of benefits it provides.
How to choose an appropriate ERP?
When choosing an ERP system, you need to know the business well, your management demands and define your priorities. It is best to meet with managers in each industry to hear what the greatest needs of each part of the company are.
Since they are available for all types of businesses, from micro-enterprises to the largest corporations, serving all sectors of the market, it is necessary to analyze well the options and functionalities that each supplier will have available to implement.
It is also very important to analyze the support and after-sales service of those responsible for implementing the ERP. As technology advances rapidly, software needs to be up-to-date to work with the latest devices, correct any errors, and adapt to new realities and / or legislation.
ERP systems need to meet the information demands of all processes that occur in an operation, in order for the data to be closer to reality as possible. When deploying the solution, you also need to consider whether they will be installed on physical servers at the facility, or whether the option will be for a cloud-based ERP, which generally means lower cost and risk.
Certainly price is an important factor, but care must be taken not to lose the investment with a wrong choice.
Ask a specialist for help choosing an ERP
What are the harms of choosing an inappropriate ERP?
Choosing an inappropriate ERP solution can mean a delay in the organization of a business, in addition to the rework and resources that will be lost. If for some reason, because of the poor coverage of the most varied sectors of the company, or because of the outdated technology, an ERP system is mistakenly chosen, some results will be easily noticed.
Choosing a wrong ERP system can lead to a loss of hundreds of thousands of dollars for micro and small businesses, exceed 6 digits in midsize companies, and even million dollar losses in large corporations. Having a specialized consultancy like Lyo at the time of purchasing an ERP software is fundamental to avoid this problem, since the portfolio of solutions is enormous and the indication always happens for the perfect model for the client.
Deployment is often a time of instability in the operation since many procedures need to be stopped and the team needs to be trained to work with a whole new system. Going through this situation often can affect the smooth running of the company.
The ideal is to plan not only meeting the momentary demands, but also to envisage a medium- and long-term future, and to design the ERP system to be able to understand the next needs or, at least, be able to readjust to the new scenario.
Why replace an ERP system already implemented?
In the technological universe, many are the motives that make certain practices fall into disuse and, with that, the tools that fulfill the functions are no longer used. Speaking of ERP systems, this is no different.
If the supplier no longer offers adequate support for the operation of the solution, there is a point of insecurity that deserves some attention. But the worst is when the software does not evolve, it no longer complies with tax regulations, such as the issuance of electronic invoices, or it does not work with cloud computing technology, which perceives a huge migration of users with physical solutions.
When these situations are observed, it is necessary to consider the replacement of the ERP system already implemented. The transition should be done as quietly as possible, as the process itself already causes certain impacts. However, no impact can be greater than that of succumbing to outdated accounting, tax and operating technologies.
How can Lyo help me?
Lyo is on hand to help you choose the most suitable option. Our team is highly trained to identify the particularities of each business and ensure that the most varied needs are met by a modern, adequate and functional ERP system.
With more than 10 years of market, we prioritize the service to our customers with the options of better cost-benefit and shorter term of implantation, no matter the type of technology chosen.
We are official representatives of the leading suppliers of ERP systems on the market. With Rapid Application Development (RAD) technology, we enable our partners to access short-term solutions while avoiding the common setbacks caused by the implementation of a new business management methodology.
We facilitate the mobility of systems already deployed to more modern options, including physical operation for software that operates in cloud computing.
Regardless of the industry, demand, and deployment time available, Lyo is able to offer the most modern, functional and business-friendly ERP system option.