Managing a company is complicated, especially during the year and for this, using an ERP program is one of the best decisions you can make. But what is an ERP? And above all, which is the best?
Suddenly there are many concepts ... ERP ... What does it do and what is needed for it? Well, that's what we are for, and here we are going to see how to take your company to 2021 with the best ERPs that adapt to the needs and possibilities of your company.
Table of Contents
What is an ERP program and how can it benefit my business?
ERP stands for Enterprise Resource Planning. A translation of this term is "Enterprise resource planning system", although it can be commonly called as"erp system» for short. It is a software or a set of them that help us manage all or the vast majority of management steps of a company, from finance and Human Resources, to stock and supply chains. Most ERP suites focus on the following fields:
- Production planning
- Purchases
- Inventory management
- Sales
- Marketing
- Finance and Accounting
- Human Resources
The benefits that an ERP can give us are greater productivity by optimizing core business processes, giving us strategic information by obtaining accurate data and quick responses, faster and more detailed reports, reducing risks, and easier and faster operation of the flow of job. Each of the applications in the ERP suite facilitates tasks and interconnects with the rest of the applications to achieve the results we need. In summary, with an ERP we will have much more and more accurate data to be able to make better business decisions by streamlining and facilitating many of the processes.
If that, some drawbacks of the ERP are its costs and the system implementation process, which adapts to the company's process and that employees use it efficiently. But many of these inconveniences are temporary and worth the investment of money and time. There are ERPs that are free or that are cloud services, which eliminates the monetary cost of its license or its implementation in the company's systems.
Functions of an ERP
We have talked about what an ERP can do in general terms, but not what things will make its implementation make our company have better results. Below we discuss several of these elements:
Analytical and financial accounting
- Ledger for accounting.
- Register of accounts payable.
- Management of fixed assets.
- List of budgets and planning.
- Management of the company's treasury.
- Financial consolidation of the company.
Applications for Human Resources
- Recruitment tools.
- Payment of employee payroll.
- Compensation plans.
- Managing the workforce.
Supply chain management
- Procurement and Supply Planning (SCM)
- Inventory and Warehouse Management (WMS)
- Calculation of purchases and supplies
- Management of expeditions and shipments
Production management
- Materials order
- Production chain planning and delivery
- Product life cycle management
- Product quality management
Apps for the sales department
- Order management
- Billing management
Other uses
- Customer relationship management (CRM)
- Document management (DMS)
- Reporting and business intelligence (BI) tasks
- Hiring and human resources
- Competitor Analysis (IC)
Modular and configurable functions of an ERP
ERPs allow us to configure and customize them with functionalities as needs arise. These functions can be modular and configurable.
In the case of the functions of a modular ERP, it is that it allows us to progressively adopt the program to our needs. On the other hand, the configurable functions allow us to go further and change the code so that it adapts to our needs and specifications, at the cost of having personnel prepared to customize its code and that it is stable as long as we have access to it. source code.
Either way, it is important to know which ERP your company needs to choose the one that best suits you among all the possibilities.
ERP, is it better to have it on premises or in the cloud?
A question that can easily affect which ERP you are going to choose for your company. The basic difference between local or cloud is simple: if you want it to be installed in the physical terminals of your company or to be accessed through the internet.
ERP in the cloud
There are other qualities such as that an ERP in the cloud will depend on the connections you have, reduces costs and provides greater flexibility and ease of access; and you only need to pay per user and functions. There is some risk that our data will be exposed.
We will have a better ease of use and reliability when working through a browser, they have a low cost and it is much easier to do system migrations. On the other hand, it will not be an ERP at all customizable, since it is standardized to cover the largest case of ones with the common denominator, and that will force us to have a constant online connection and we will be depending on whether there is a stable connection and not there are blackouts if the area in which we operate has a lot of power outages. We can solve this last problem using laptops and a UPS like Salicru which can keep a router and ONT turned on for hours to operate for a while
Having an ERP "on premise" or locally
If, on the other hand, we decide to have a local ERP, also known as ERP on premise, we will need to dedicate space to it on the company's servers, with the cost in infrastructure and licenses that it needs along with having to hire or subcontract personnel or have to commission these work to the company's IT team. In return, we will have total control of the program, both of the modules and of the contents and their security.
Using open source
An open source ERP implies that it is possible to manage its internal code to be able to handle it and adapt it to our specific needs. It is a step further for the customization of an ERP locally, but in return we will have just what we need, with specific modules for our company and eliminating redundant ones or those that do not suit us. We will need a dedicated IT team specialized in open source programming to be able to use it efficiently.
But in return we will not have to pay licenses and it is very likely that we will have the support of dedicated communities that will make us have a great capacity to adapt at low cost. It is ideal for startups and companies that are just starting out, since they will quickly be with an ERP competing against other larger teams.
Vertical or horizontal
Another factor that we must take into account is whether our company may better need an ERP whose functionalities are adapted to our sector. The most common manufacturing and distribution sectors tend to have ERPs dedicated to their functions and needs, commonly referred to as verticals. These will have all the functions and operations perfectly done and organized for our sector. Some of them are
- Prophet21 for department stores.
- Munis for public sectors.
- JustFoodERP for catering companies such as restaurants, cafes or caterings.
- Epicor Distribution for distribution company.
- Skubana for retail companies.
Know how to choose the ERP you need
With around 400 ERP systems, it is difficult to choose the one you need, especially knowing that there is no perfect ERP for our company. At least, not if we do not modify it so that it is consistent and perfect to our needs and demands. That is why you have to know what type of company we are and why we want to put a new ERP or change it.
If we want to change the ERP of our company
This is for medium or larger companies that already have their comprehensive system. In the event that they want to change the ERP, they will need to change the entire set of solutions and all technical elements. In this case, the following ERPs are recommended:
- SAP
- Microsoft Dynamics
- Oracle infrastructures
- Sage
Companies that want a highly adapted ERP
In this case, we are looking for the installation of specific modules of different programs. They do not need to be serially integrated and we simply need them to be very concrete and specific. We will have to evaluate the vertical systems that can be incorporated into our modular system. Some of these programs are:
- Salesforce
- Zoho
- Sage
- Openbravo
- Skubna
It is recommended that each department choose the one that suits them best and with which they are most comfortable. What matters to us is that the workers who are going to use it on a day-to-day basis are more comfortable. Of course, full integration will be much more difficult.
Install the company's first ERP
In the case that we are a new company or for years we have operated with a basic communication and office automation package. We do not inherit any load from other systems, so we can easily choose any system that will not give us any incompatibility, and with this we will have the possibility of using the most modern systems, the one that best suits us and putting tools in it easily and simply . Some of the new systems that we can use are:
- Odoo
- VIENNA Advantage
- ERPNext
- Xtuple
- dolibarr
- Bitrix24
- Sellsy
The most used ERP
It is possible that our first line of thought is to choose the most used one, since with this we make sure that you will have the best support and in the case of looking for new employees, they may already be adapted to using that ERP. With this we take away a small part of his training in his first days at the company. The most used ERPs in recent years are the following:
- Microsoft Dynamics
- Odoo
- SAGE
- net suite
- Deltek
- Infor
- Kronos
- SYSPRO
- SAGE Intact
- Account ERP
- SAP S/ 4 HANA
- Priority Software
- ePromis Solutions
- E2 Shop Systems
- ERP
- epicor
- deskera
- Oracle ERP Cloud
- acumatics
- Plenty Markets
The industry's top rated ERPs
What if you just want the best value? The vote of confidence of the experts. You still want the most effective professionals to recommend you, and these are the best rated:
- net suite
- sage intact
- SAP business one
- Microsoft Dynamics NAV
- Oracle JD Edwards
- SYSPRO
- Aquamatic Cloud ERP
- Account ERP
- winweb
- ERPNext
- aquilon
- Macola Software
- VersAccounts
- ERPAG
- deskera
- epicor
- Microsoft Dynamics AX
- BizAutomation
- dolibarr
- CentralBOS
ERPs designed for users
Now, we may want one that is very easy for employees and users to use. They are the ones who are going to handle it during the performance of their work and there the assessment depends more on its usability, efficiency and ease of use. These are the best valued by thousands of users, not so much design professionals, but end users who need an ERP that is easy to use and that works for their company.
- SAGE Intact
- Skubana
- OpenPro ERP
- net suite
- epicor
- SYSPRO
- munis
- OfficeBooks
- SAP ERP
- prophet21
- acumatics
- PeopleSoft
- Financial Force Accounting
- SAP Business
- SageBusinessCloud
- Oracle E-Business Suite
- Microsoft DynamicsGP
- Information ERP
- Global Shop Solutions
- WED Trak Pro
Free ERP
The budget can greatly influence the choice of an ERP and it is normal to think about using one for free. Let's say you simply want to start and are looking for a free ERP, or with many free basic functions. We can go to Open Source, but we have already said that it compensates if we have an IT department to install and modulate it to our needs. We can also get one of free distribution without licenses and that charges us for extra elements. Here is a list of free systems for companies:
- ERPNext
- Xtuple
- dolibarr
- Odoo
- Bitrix24
- Sellsy
- Openbravo
- openpro
- Vienna Advantage
- MixERP
ERP adapted to SMEs
In the case of an ERP, it is intended that it has a certain ease of use, has an affordable cost, its implementation is smooth and is simple. But this does not mean that it is no longer efficient. These are the ERPs that best adapt to the demands of a company with up to 50 employees:
- Dolibar ERP
- Xtuple
- ERPAG
- SageBusinessCloud
- Megagainventory
- acumatics
- Odoo
- net suite
- sap business one
- Microsoft Dynamics SL
- ERP
- Microsoft DynamicsGP
- Microsoft Dynamics AX
- sage50cloud
- Microsoft Dynamics NAV
- Information ERP
The costs of having an ERP
Once we have decided which ERP we need, maintenance costs will have to be weighed. It will vary depending on whether it is an online or local one, whether it is going to be used by many users and whether we are going to ask for many contracted functionalities to adapt it to our needs. The hardware that we need to host it will also be more expensive if it is locally (in this case the ERP in the cloud would lower this cost) and the associated services such as training, maintenance and implementation.
There are also hidden expenses derived from implementing the system in your company due to unforeseen events. But the easiest formula to calculate is by how many users you will get, since there are some that charge a flat rate, by user sectors, or by number of users.
If we introduce an ERP in our company, it is inevitable the expense in training, or the external consulting service. If we change it, we will need to take into account the migration of the data and the scheduling of the processes. On the other hand, the On premise costs us the software, the hardware, the implementation and the management together with recurring licenses, maintenance and technical service. One in the cloud, the only recurring expense will be the subscription, annual or monthly. In general, the cheapest are usually those that are in the cloud, even the first year.
ERP according to company size
If our company has two to ten users, we recommend an ERP that costs between 0 and 50 euros per year. Many ERPs in the cloud or that are Open Source and basic will cover most of our needs. Odoo, Dolibarr ERP, Xtuple, ERPAG, Sage Business Cloud, Megainventory, Acumatica, and ERPnext are best suited for small businesses.
In the case that we have between 11 and 50 users in our company, the budget can amount to a range of between 50 and 000 euros per year. We would begin to consider the installation of a local one, and we will have Netsuite ERP, Sage Business Cloud, Skubana, Sap business one, Sage 200cloud, SAP ERP, Microsoft Dynamics GP, Infor, OpenBravo and PeopleSoft as options for this size. Training costs can escalate considerably.
If we already have more than 50 employees, the cost will easily go up to more than 200 and we will need the most complete solutions. SAGE Intacct, SAP ERP, Oracle ERP cloud, Microsoft Dynamics GP, SAGE Business Cloud, Netsuite, SAP S / 000 HANA, Microsoft Dynamics NAV, Sap Business One and Microsoft Dynamics AX are the ones that will best adapt to this number of users and the huge variety of departments.
How to implement an ERP in a company
Once we have already decided the ERP that we want to use, we have to implement it. Keep in mind that there can be many reasons why its implementation is not effective such as poor tactical planning, a lack of employee training to teach them how to use it, a lack of commitment or direction, or non-existent change management. It is a tough process, but necessary because your benefits will quickly recoup the investment.
When it comes to implementing it, there are numerous tips for its implementation to be effective:
- It is advisable to carry out a prior audit of the ERP and project design.
- The entire management team must be involved, not just the workers.
- It is imperative to designate an “administrator user” to control the software.
- They recommend implementing a modular and scalable solution that can be implemented little by little.
- It is necessary to hire a team of specialists in the chosen solution and with experience in your industry.
- You have to adapt the processes as much as you can to the purchased solution and not the other way around.
- You have to avoid as much as possible the development of customizations except those strictly necessary.
- It is essential to demand an implementation schedule.
- Finally, you have to reserve a budget for contingencies.
The risks when implementing an ERP in the company
We cannot stop insisting, but the implantation is hard, but necessary. It is not an easy path, and throughout its implementation we may encounter the following problems.
- A bad choice of software to implement.
- A poor selection of the implanting company.
- Lack of training at all levels and users of the system.
- Lack of management involvement in the system.
- Friction in the use of the ERP system by users.
- Unforeseen hidden costs.
- Poor project funding.
- Absence of post-implantation follow-up.
You have to know about these problems and know how to prevent them. Training is important and it must include motivation beyond efficiency, since it is easy to use and the stability of the company. You have to know that once the initial license and installation have been paid, there may be problems. And finally, know that once installed it is not finished and you have to follow up to find out what can be improved in case you have to contact the technical department to put or remove missing or redundant modules.
After this, the implementation and use of ERP in the company will meet our needs and demands, and with this we will achieve the objectives that we have set with its implementation. A small advance and improvement will be noticed exponentially over time as better and faster tracking of inventory or sales that translates into less time invested in reports and inventories, or automated payments on time by Human Resources , which can avoid interest on late payments.
