What Is ERP Software?
ERP Software is a single platform that unifies, centralises, and stores core business process data through integrated applications and modules. By collecting financial and operational data, an ERP acts as the decision-making nervous system of an organisation.
Enterprise resource planning provides business value in three key areas:
- Productivity through automation.
- Collaboration through integration and the flow of data.
- Efficiency through total visibility of business processes and functions.
An ERP Software suite comprises various out-of-the-box and configurable modules and sub-modules. Each module is responsible for a specific business process, including:
- Finance and Accounting
- Material Management
- Supply Chain Management
- Human Resources Management
- Inventory Management
- Warehouse Management
- Order Management & Fulfilment
- Manufacturing & Distribution
These modules capture specific operational data and provide end-to-end business process workflows through integration with other modules (inventory management modules need data to flow back and forth between supply chain and accounting modules, and so on).
How Does an ERP System Work?
An ERP system captures real-time datasets from business processes and displays them in a unified form, like dashboards and workflows. Data includes accounting, financials, sales, logistics, HR/HCM, supply chain, CRM, and manufacturing.
95% of businesses that adopt ERP Software - when migrating data from legacy ERP systems, mainframes, MS Office, and spreadsheets - see an immediate operational improvement.
An ERP combines predictive analysis and reporting to recommend automation procedures and improve the efficiency of business processes. Core capabilities of a modern cloud-based ERP include:
- Automation: An ERP is empowered to make and recommend operational decisions with minimal human input using machine learning (ML), artificial intelligence (AI), and IoT (Internet of Things).
- AI: AI integration enhances the ability to provide real-time decision-making through data analysis and generative recommendations. 65% of CIOs have already implemented AI in their enterprise resource planning functions.
- Data Analytics: This is the foundation of an ERP. It replaces manual analysis and automates the processing of datasets from all business functions through integrations and modules.
- Reporting: Reporting strategies are generated for all stakeholders (from operational employees to senior executives) to report on KPIs, system performance, people, compliance, risk management, and more.
- Integration: A key part of building a successful ERP suite is the ease of integration with specialised applications, APIs, and systems such as CRM, Human resources, e-commerce, and business intelligence.
Core ERP Software Features and Modules
Planning Engine
- Financial planning
- Materials and Labour planning
- Supply chain planning
- Workforce planning
- Warehouse planning
- Logistics planning
Accounting, Budgeting, and Finance Modules
- CAPEX (Capital Expenditure) budgeting
- OPEX (Operational Expenditure) budgeting
- Buffer budgeting for unknowns in a fiscal year
- International Financial Reporting Standards Foundation (IFRS)
- Financial Accounting Standards Board (FASB)
- Generally Accepted Accounting Principles in the United States (GAAP)
- HGB in Germany and PCG in France
- US Securities and Exchange Commission (SEC)
- European Securities and Markets Authority (ESMA)
Workforce Management ERP Software Features
- Hiring
- Human resource management
- Employee well-being monitoring
- Human resource upskilling
- Managing internal and external workforces on site, plant, or other locations
- Assigning workforces to a project
- Time and labour management
- Define permit-to-work conditions
- Monitor health and safety conditions in the workplace
Project Management ERP Software Modules
- Internal project management
- Acquisition projects
- Departmental projects
- Strategic projects
- Change management
- Short-term projects
Risk Management
- Document risks
- Grade risks
- Project Risks
- Navigate risks with risk mitigation actions
- Correlate risk dependencies
- Fully understand the detailed impact if the risk events happen
Compliance Management
- Define internal and external compliance factors
- Understand planned vs actual compliance
- Understand non-compliant areas
- Procedure to adopt if compliance is not met
Supply Chain Management
- Map the process from the production of goods to the delivery of goods
- Adjust for just-in-time (JIT) availability of raw materials
- Interlink between supply chain production processes
- Define parameters of goods/raw material acceptance
6 Benefits of Implementing ERP Software For Businesses
1. Build and Access One Source of Truth
The top reason for implementing ERP Software is to build one data pipeline between the most important (or chosen) business processes. Often, ERP is implemented to connect Sales, Supply Chain, Manufacturing, Warehousing, HR, Financials, Delivery of Goods, Logistics, Returns and Service Management. This allows businesses to reduce the need for multiple and individual software applications.
2. Improve Capacity and Utilisation of People, Assets, and Processes
Co-relational data and analytics is a very powerful deliverable of an ERP system. It enables enterprises to co-relate data and information across all business functions. There are amplifying capacity and utilisation benefits in knowing answers to questions like what was promised by the sales team, what is available to deliver, what can be manufactured, and when the goods will be delivered in one system.
3. Transition Enterprise Communication From Seeking Information to Driving Progress
Often, communication with siloed software is around seeking information. Simple questions like what is the order value, material location, instructions to deliver, arrival of a bill of material etc. consume an exceptional amount of time for an Enterprise.
By implementing a single source of data and truth, ERP users can find information within the ERP Software meaning information-seeking communication time is significantly reduced. This gives space for improved communication quality to drive the enterprise forward.
4. Use Co-relational Analytics to Make Data-Driven Decisions
Co-relational analytics and data between different teams open several opportunities to deliver growth, improve utilisation, and optimise costs. Volume leverage, timing leverage, managing peaks and low periods of business, hiring decisions, training, and upskilling decisions can be taken with utmost confidence by unpacking data from your ERP Software.
5. Correlate Different Parts of the Business
An ERP communicates several parts of a business by building a common data pipeline from business functions. The overall understanding of your enterprise goes up for every ERP user. The intangible benefit of deploying an ERP system depends on the quality of hires, training, and overall communication in the business. If done correctly, this results in amplified speed and efficiency of your enterprise.
6. Build a Growth-oriented Culture
ERP Software can set targets for functions such as Sales, Supply Chain, Manufacturing, Warehousing, HR, Financials, Delivery of Goods, Logistics, Returns and Service Management. This enables enterprises to set, monitor, and drive growth.
Best ERP Software Products on Comparesoft
Flowlens MRP and ERP Software
Flowlens is an MRP/ERP solution for original equipment and device manufacturers seeking to consolidate build-to-order processes. It is designed to eliminate paper/spreadsheet-based workflows and simplify compliance with common standards, such as ISO 9001. Flowlens includes an embedded CRM system and post-sales service support, and integrates with third-party finance and accounting packages.
PRICING
From £39 per user, per month
Industries
Original Equipment Manufacturing, Equipment Reselling, Parts and Materials Supply, Industrial Machinery and Components, Manufacturing
IFS ERP
IFS ERP is a configurable enterprise resource planning solution optimised for complex, asset-intensive industries and organisations. It is a consolidated platform for work coordination, execution and adaptation that features industry, role and user-specific workflows and lobbies.
Industries
Aerospace, Defense and Security, Energy, Engineering, Construction and Operations, Logistics and Distribution, Manufacturing, Oil and Gas, Telecommunications, Utilities
Deployment
Cloud-based, web-based, on-premise
Infor CloudSuite Food and Beverage (ERP)
Infor CloudSuite Food and Beverage (ERP) is an adaptable, automated and extendable cloud ERP Software especially designed for leading food and beverage industry organisations.
Pricing
From £120 per user, per month
Industries
Dairy, Animal Feed and Pet Food, Beverages, Grains and Cereals, Meat, Poultry and Fish, Bakery and Confectionery, Agricultural Produce, Fruits and Vegetables, Food Ingredients
Deployment
Cloud native on AWS
RamBase Cloud ERP Software
RamBase was launched because the manufacturing company could not find an ERP Software that met their needs of managing a high value - low volume manufacturing processes. After using it in a real manufacturing setting, testing it for a number of real manufacturing processes and scenarios. RamBase then decided to launch the software for other manufacturers.
Pricing
£29 per user, per month
Industries
Manufacturing, Electronics, Wholesale Distribution, Automotive, Oil and Gas, Industrial Machinery and Equipment, High Tech and Electronics
Deployment
Multi-tenant cloud hosted
Statii
Statii is a customisable MRP system designed to help SME manufacturers manage everything from front-of-house customer and supplier documents to shop-floor production management. It includes built-in document creation and storage, production control modules and shop-floor data collection.
Pricing
From £64 per user, per month
Industries
Metal Manufacturing, Wood Manufacturing, Plastic Manufacturing, Industrial Machinery and Components, Engineering, Construction and Operations
EFACS by Exel Computer Systems
EFACS is an ERP with comprehensive planning engine and embedded aftermarket capabilities. It includes comprehensive field service management capabilities and is used mostly by medium to large manufacturing (and associated) industries.
Pricing
From £4,000 a month
Industries
Manufacturing, Aerospace, Engineering, Construction and Operations, Automotive, Electronics
Deployment
Cloud and On-Premise
The Three Categories of ERP Software Products
1. Niche ERP Software Products
Niche ERP Software products come with planning and execution engines for specific industries and applications. Some examples include:
Niche ERP products offer very deep and broad capabilities, often requiring light configuration. These products optimise ERP processes and deliver incredible productivity uplift.
2. Small and Medium Business ERP
Often, SMB ERP products are aimed at companies with 250 employees.
ERP Software for small and medium businesses are non-modular. I.e, they have all the features in the core product. ‘All-in-One’ is typically the core preposition.
3. Enterprise ERP Software
Enterprise ERP systems tend to be modular and have industry and application experts for pre-sales and implementation.
Deepest configuration and customisation possibilities often mean Enterprise ERP products require phased implementation.
Types of ERP Deployment Models & What Are the Differences?
From project drivers to budget allocation, ERP implementation is complex. It involves picking the right methodology approach; waterfall or agile? As well as knowing what strategy best matches your requirements; big bang, phased, parallel, or hybrid?
The answer to these implementation-driven questions depends on the type of deployment.
Cloud ERP/SaaS (Public or Private)
Cloud ERP systems are by far the most popular ERP deployment type, with 86% of digital finance leaders claiming a cloud-first mindset. Cloud ERP is a software package that resides on a server and is accessed via the internet and by paying a subscription service model to the provider (also known as software-as-a-service). There are two types of ERP Cloud Software models:
- Public: All infrastructure is owned and operated by a third-party vendor operating a multi-tenant subscription model.
- Private: A cloud model owned by just one company, as opposed to multiple, with the infrastructure either on-site within a company’s firewall or off-site in a company-owned data centre.
On-premise
A company operates and maintains its own software and hardware infrastructure on-site. ERP Software is installed on in-house servers and all infrastructure assets - including licenses - are exclusively owned by the company.
Hybrid Cloud ERP
A combination of public and private cloud models offers a mixture of advantages. Private cloud provides ownership and security, while public cloud models offer ease of implementation and scalability, particularly with data storage and computing requirements.
Deployment Type | Advantages | Challenges | Best for |
|---|
| Cloud ERP | No on-site infrastructure to maintain, Quick installation time, Low up-front costs | System security, Control of data, Control of updates | SMBs and businesses switching from outdated, expensive on-premise systems |
| On-premise ERP | Complete ownership and control, High level of customisation | Large upfront hardware and real-estate costs, Responsible for data security, Long implementation times | Large, multi-national enterprise organisations with the space and facilities to house on-premise ERP infrastructure |
| Hybrid Cloud ERP | Control over data and systems, Security of third-party provider, Quick installation times | High hardware costs, Complex integration of both public and private systems | SMBs and large organisations with the real estate for hosting on-premise hardware but the flexibility to run processes from a third-party vendor. |
Specialised ERP (Industry)
Specialised ERP systems are customised to provide features and capabilities targeted at specific niche operations and industries. For example, while a Distribution ERP system will have generalised features for finance and HR, it will provide more specialist features for distribution activities like order fulfilment, warehouse management, and demand forecasting.
Two-Tier ERP Deployment
A two-tier ERP approach is deployed when a core ERP system (Tier 1) is either overly complex or doesn't provide the specialised requirements of business subsidiaries. Therefore, instead of all regions and subsidiaries using one core system, organisations will deploy another ERP Software (Tier 2).
How ERP Software Impacts Different Industries
Businesses implementing ERP Software have multiple operations, each with a specialised area of focus that requires complex planning and reporting. With this in mind, ERP Software is best utilised in industries such as:
- Manufacturing: Manufacturing ERP systems help manufacturers plan and schedule production, improve product quality, leverage product lifecycle management, optimise supply chain planning, and gain accurate inventory control.
- Retail/E-Commerce & Distribution: Retailers utilise e-commerce integrations and ERP modules such as order management, warehouse management, customer tracking, and supply chain management to improve control of sales and the customer experience.
- Healthcare: Hospitals, care homes, blood banks, and more, use ERP business systems to manage medical inventories and supplies, digitalise patient records to build centralised patient portals, and create accurate financial forecasts.
- Construction and Engineering: Construction and engineering operations use integrated ERP applications to track and assign sub-contractors, control the inventory of building materials, plan for resource allocation, and improve project management on a large scale.
- Banking and Financial Services: ERP systems are used by financial services to control risk management, plan for “what-if” scenarios, secure data management, and track custom relationships.
- Education: Institutes, schools, and colleges use ERP Software to make sharable information available to parents, students, staff, and teachers, as well as help to build digital student records and improve the availability of educational equipment through resource planning and asset management modules.
- Food & Beverage: Tailored food and beverage ERP tools use information to analyse and improve food waste management, recipe management, ingredient tracking, and allergen and dietary safety compliance. As well as using warehouse and inventory management modules for storing products with temperature, weight, and date requirements.
