Someone recently asked: What is an ERP system? There are a variety of definition on the internet that included an acknowledgement that software was part of the system. Most also noted that it the summation of a firm’s business processes. The following definition appears to be the best because it also acknowledges the external flow of information and the recognition that functions are disparate:
“An ERP system helps the flow of information between all business functions inside an organization and communicates with outside stakeholders such as customer and supplier systems. The key objective of an ERP system is to bring together the disparate functions of the organization into a single system environment and therefore make the operations run more efficiently. “
Ironically, most solutions on the market today that tout themselves as ERP software fall short in one or more ways. Let’s explore seven shortcomings that should be considered when evaluating the effectiveness of your current system or the potential purchase of an new system.
1. Most products do not consider collaboration in the base design
2. Most products on the market are comprised of a “best of breed” model rather that a truly integrated solution on a single database
3. Most products fall short with customer portal information
4. Most products do not have workflow management and notification inherent in the system
5. Most products do not integrate document management as part of core functionality
6. Most product have limited dashboard
7. Most products have limited tailoring
This is probably the least considered need in all the legacy products that are in the marketplace today. Most systems were designed based on a single functional or departmental need. For example, one system that I reviewed did not have an simple way for the receiving department to notify purchasing of a quality issue on a shipment much less notify accounts payable know that the invoice should be placed on hold until a resolution could be identified. Additionally, collaboration can only be achieved if all employees have access to their portion of the ERP information. All legacy software (and most new arrivals in software publishing world) comes to the market place with a pricing model based on “per user license.” This pricing model discourages access to common information and encourages silos of independent information in spreadsheet and alternate systems.
Finally, collaboration should provides anywhere, anytime access. Employees, especially the millennial entering the workforce, expect access to be easy and with most any device.
Best of Breed
Software publishers that have been in the market for many years have grown their ERP solution though acquisitions and partnerships. It is quite common, and will continue to be, for ISV’s (independent software vendors) to write add-on applications to shore up shortcomings in a product or fill a demand for a specific vertical need. While these add- on applications typically fill the gap functionally, they come with cost.
o They are usually an “interfaced” solution rather than integrated which will always result in data discrepancies.
o They will restrict your ability to apply updates or upgrades unless the add-on has been tested and modified to work with the newest release.
o The look and feel of the add-on solution is typically different that the ERP product especially related to reporting.
Customer portal software for B-to-C (business to end consumer) enterprises are much more robust and show stronger integration to back offices as they are typically newer to the development marketplace. However, B-to-B (business to business) enterprises will find a much weaker set of software available. B-to-B functionality in most ERP solutions should include:
o Ability to place orders online with a “duplicate/modify” previous order
o Easy access to history
o Ability to track order status from placement to shipment with a tracking number
o Ability to manage payments and invoices
o Ability to determine inventory availability
While most legacy ERP solutions offer some of the features, few or none, have them all. Additionally, the “back office” data must be squeaky clean if it is going to be revealed on the web to a customer. Because the ERP solution is a best-of-breed configuration, data low adoption of the portal by employees or customers. Similar issues also occur with the supplier side and information lacking in a portal.
By definition an ERP solution is to facilitate flow of information inside an organization. Today’s technology can easily automate not only the movement but the approval of information as it moves through an organization. Additionally, today’s employees expect automatic notification of “the next step.” Most systems simply do not provide that kind of workflow management unless it is a best-of-breed add-on. Similarly, automatic notification, via email, text, auto-generated and delivered reports are typically found only with add-on solutions. Most legacy ERP solutions still require employees to run and scan reports for problem situations that need corrective action. And the employee might have to run these reports multiple times a day.
This may be one of the most complex features in any ERP. There are several very powerful document management solutions as standalone systems in the market today. Their short falling can be in two major areas:
o Their integration to the ERP transaction does not allow quick and easy access
o They are designed for a single functional or departmental area
But every ERP solution should include the ability to attach one or more source documents, photos, reconciliations, agreements or spreadsheets to an event or to a master file. This would include, for example, an attachment to a customer invoice or an attachment to a vendor master record.
Dashboards are actually part of the workflow and notification process if they are designed correctly. Many older systems have dashboards that are not real-time and do not represent the KPI’s of the company. Dashboards should be user (employee) specific and real-time. Additionally, dashboards could reflect data within the ERP or links to other important websites that are needed routinely. The best systems will provide drill down ability from dashboard information to a source transaction or a supporting report. The dashboard should be intuitive, easy to understand.
The very best software will allow you to leverage the strengths of your operations: those things that give you a competitive advantage in your market place. And the best software will allow you to do this with “tailoring” rather than “customization.” Customization usually require code that will need to be maintained throughout the life of the system. Tailoring, is the ability for the software to be modified with either default settings or changes that survive version upgrades. Current technologies, especially those that are browser based, have tailoring tools that keep maintenance to a minimum while shaping the system to reflect your operations.
Your ERP system should do the following:
o Connect all the business functions
o Connect all business partners (customer and vendors)
o Facilitate disparate functions of the business
o Make the business run more efficiently
CS3 Technology vetted over a dozen products in the marketplace during the addition of a new ERP solution to our portfolio. We applied all of the criteria noted above and added Acumatica to our offering for our clients. We chose Acumatica because of the three primary principles that drive the design and functionality of the software:
Take Control of Your Business
Empower Your people
Play to Your Strengths
Take Control of Your Business
o Have visibility and control over your business to drive growth, manage costs, and be productive.
o Know where your business is at any time of the day
o Control your data (other vendors lock you in their data-center, but Acumatica lets you decide where to host your data, on the public cloud, private cloud, or on-premises)
o Unlimited users – Acumatica lets you add unlimited users at no additional cost
o Enterprise-grade security features
o Subscription plans or buy the license
o Reach international markets quickly with multi-currency, multi-language, multi-company capabilities
Play to Your Strengths
o Serious out of the box functionality
o Build what you need for your business using complementary solutions and platform tools (customization and integration are easy)
o Protect existing investments – Acumatica lets you easily integrate with existing client hardware
o Build on the platform of the future with easy development Empower Your people
o Get information to the right people since Acumatica comes with unlimited users, anyone can access, create and receive the data they need to work
o Runs anywhere on any device – Acumatica runs across web browsers and mobile app platforms
o Get real-time collaboration
o High performance on demand – works right out of a web browser
o Useful, and usable technology, not just buzzwords – IoT, Big Data, Social CRM
Acumatica gives your people the tools they need to drive impact and productivity for your business.