What is an ERP
and what can it do
for your business?

Fluentis / ERP

ERP: the tool that integrates all the essential functions for a company

ERP: features and benefits

The common feature of all ERP systems is a shared database that supports multiple functions used by different business units. This means that all the employees of a company can rely on the same information for their specific needs.

In addition to what has been said, new generation ERP systems also leverage new technologies - such as machine learning, artificial intelligence and communication technologies - to allow real-time dialogue with the entire production and sales chaintocollect and process informationto monitor the progress of the business and to suggest or plan activities accordingly.

The ERP system is now an essential requirement for a company: not only for the manufacturing sector (it would be unthinkable to approach the world of Industry 4.0 without a good ERP), but for any company that wants to grow its business and reduce wasted time and money.

An ERP integrates all the essential functions for the management of a company (Accounting, Inventory and Order Management, Human Resources, Customer Relationship Management, Production, Supply Chain, Services etc.).

This is why ERP is often compared to the IT backbone of a company, since it connects all the processes together, automating and improving them.
The company thus becomes an "organism", the vertebral column of which (the ERP) connects the different areas and makes them communicate with each other and with the outside world.

Let's make some practical examples (but many others could be made):

• An ERP system is able to suggest what and when it is necessary to buy, which are the suitable suppliers and what and when to send to production.
• With an ERP, sales orders automatically enter the financial system without any manual re-coding: the order management department can work faster and more accurately and the financial department can close books faster.
• An advanced ERP offers dashboards to quickly understand the company's performance based on established key parameters.

The benefits of an ERP

With an ERP solution the company has access to accurate information that helps make better decisions faster. It also automates repetitive processes, drastically reducing costs and possible risks and errors.
Here are the main advantages of using an ERP system:

A bit of history

The term ERP was coined in 1990 by Gartner, but its roots go back to the 1960s. Initially, ERP were programs for the management and control of inventories in the manufacturing sector, to which functionalities were added to monitor inventory and reconcile balances.
In the 1970s, these rudimentary programs were replaced by MRP (Material Requirements Planning), for the planning of production processes.

Since then, MRP systems have evolved to include production processes and other back office functions, until, in 1990, they laid the foundations for ERP systems, as we know them today.

Things to consider when choosing an ERP

We have seen how ERP systems are a very important tool for a company and a long time investment, at least 10 years. It is therefore quite natural that this choice should be as prudent and documented as possible.
The decision-making process should be based on an in-depth strategic analysis, which first of all must highlight business objectives and the mapping of information flows.

Some features to consider when choosing the most suitable ERP solution are:

FLEXIBILITY

A fundamental feature to look for in an ERP system is configuration flexibility: there is no ready solution that is good for everyone, the ERP solution should be able to adapt like a suit tailored to the peculiarities of each company.
In the past, it was usual to implement very complex and costly IT architectures, to which the company had to adapt. Making changes to this system was difficult and consequently expensive. This is why ERP solutions were mostly accessible only to large companies. But fortunately the technological progress brought by the Digital Transformation has turned the tables: now no longer the company has to adapt to the solution, but the other way round.
Flexibility, or the ability to adapt to any type of company and business objective, is today considered a primary requirement for an ERP solutions.

MODULARITY

Modularity is an aspect that refers to flexibility and refers to the structure of the ERP. Fortunately, most of the current solutions have a modular structure, to adapt more easily to the needs of each individual company. Typically an ERP covers the following macro areas: Accountancy, Sales, Logistics and Warehouse, Production.
But with the technologies available today, it is possible to cover practically any functional need, as well as to deepen the level of detail for specific business areas.

INTEGRATION

Another important feature is the integration capability. The modularity of the solution must be fully integrated, to facilitate the workflow between the various business units and to provide an updated picture of the business trend in real time.

It is important for an ERP also to be integrated with other softwares and applications already present in the company, from the most common to the sophisticated ones, such as Business Intelligence tools, WMS or DMS softwares, for example.
Certainly the presence of departmental applications natively integrated into an ERP is a very appreciable factor: being able to count on an integrated CRM module, for example, on a DMS, Workflows, or integrated SCM (Supply Chain Management) is a "benefit" not to underestimate at all.

TECHNOLOGY AND EVOLUTIONARY POTENTIALITY

This is a determining factor to consider when choosing an ERP: technology is making great progresses and it is important to rely on advanced and constantly updated softwares to keep up with the times. This becomes even more important if we consider that an ERP solution is a long-term investment: it is important to carefully evaluate the technological update of the product and its evolutionary potential.
The commitment that the ERP Vendor demonstrates in Research and Development is a positive index to consider: very often brand's reputation and internationality are not guarantee of innovation.

AVAILABILITY OF THE SOLUTION IN CLOUD OR SAAS

An important technological advantage that new generation ERPs offer is the availability of the solutions in CLOUD or SaaS (Software as a Service) mode, or the possibility of using the product on a "subscription" basis, without having to bear the costs of a IT infrastructure within the company.

Cloud-based solutions not only offer an economic advantage, but also make these systems easier to implement and manage. Perhaps more importantly, Cloud ERP allows real-time and BI reporting, making it a valuable resource even for executives who are interested in business visibility.

SIMPLICITY OF USE

An ERP should be user friendly and easy to learn. A good user experience will overcome users' natural resistance to a new software and facilitate its rapid adoption by all employees, without slowing down work flows.

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