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Back to Basics: What is ERP?

ERP software, or Enterprise Resource Planning software, can be really complex and take a lot of time and experience to really wrap your head around. Considering that most enterprises only undergo a major software project every 5-10 years, it can be difficult to find the internal resources necessary to maximize on an ERP investment. If you are a small business owner, experiencing a lot of growth, the idea of implementing ERP can cause paralysis by analysis. The aim of this blog is to break down some of the confusion and make the topic of ERP a little less daunting.

What Exactly is ERP?

ERP software is exactly what it sounds like. It is a system designed to help you organize and run your entire enterprise. For manufacturers and distributors that means a single software system that can manage all of your back of house functions like purchasing, inventory management and manufacturing floor operations. It also handles front of house operations like accounting and customer service. By having all operations under one integrated system, it helps you keep an eye on everything happening in a company, all within a few clicks of a mouse.

It is also important to understand that there are multiple tiers of ERP software. Large ERP developers like Oracle and SAP are designed for Fortune 500 companies. But there are plenty of options for small to mid-size manufacturers like Exact Macola 10 and Sage 100 priced appropriately for the market and designed to scale as you grow.

How do I Know if I Need ERP?

This can be difficult to gauge at times. For small businesses and start-ups there are a few flags to look out for that might indicate you’ve outgrown basic software systems. The first thing you should do is look at all of your daily operations. How much time are your employees spending hand entering things like inventory counts, sales orders or accounts receivable? Are they having to enter this data into multiple systems in order to maintain accuracy across multiple departments? You also need to consider reporting. Do you have all of the access you need to critical business intelligence? And can that intelligence be gathered in a quick and efficient manner, or does it require copious spreadsheets and hours of manpower to compile?

Start adding up the costs associate with data entry and report generating. Are you maximizing the potential of your shop floor? What would happen if you could shorten lead times for your customers? These are the questions you need to ask yourself, and you need to be able to put a dollar amount on every process, and decide if things can be done more efficiently.

The process of figuring out if you need to upgrade to ERP software can be overwhelming in and of itself, much less actually selecting and implementing a new system. The Attivo Group is here to help you navigate that process and help you determine whether or not you should stay with your current system, or move into a more robust ERP package. For more information on this process you can call us at 877-428-8486 or contact us here.