Let's Talk Enterprise Resource Planning (ERP)
Updated: Jan 21, 2022
As a startup business, it’s understandable that you may utilize the most common resources around you; and in the beginning, that’s more than acceptable because it’s able to accommodate your needs for the time being. However, there always comes a point when a successful startup can no longer depend on the common resources that may be ideal for businesses with 1-5 employees. There comes a time when tracking things on Excel or Quickbooks no longer carries the bandwidth of your business's needs. This point is right about when companies begin to look at utilizing Enterprise Resource Planning software (or what’s commonly referred to as an ERP).
ERP’s are systems that document and gather essential business information so that your business’s operations can run more efficiently and become more sustainable. By doing this, you can not only give your business the bandwidth to accommodate its current success but you can also give it the space to grow beyond it.
Um...so what is ERP *really*?
If we’re getting technical, an ERP is something that can be compared to that of an app. Except...it’s an app that runs your entire business! ERP systems have the ability to automate standard processes within your business as well be able to collect incoming and outgoing data. This allows you the ability to get a full overview of your business at all times from things such as
HR, to manufacturing all the way down to sales and/or marketing. This sort of insight into the day-to-day activities of your business not only assures that things are able to keep moving seamlessly but it also allows you to see what’s working well (so that you could adopt it in other areas) or things that are not working so well and needs to be addressed.
This sort of documentation at all times is also extremely vital should an audit ever arise.
As the owner of your business, utilizing an ERP can be like having a more efficient YOU (if that’s even possible) as a sidekick, monitoring your business at all times while you do all the other equally valuable work. And having so many hands on deck (physically or virtually) will give you the ability to save in costs where you can as well as increase productivity across the board.
Additionally, it’s important to note that ERP’s that are uniquely designed to attend to the needs of an individual business (such as your own) offers the opportunity to pay major dividends which tends to make systems such as this an invaluable tool!
As stated so perfectly by NetSuite themselves “an ERP system helps unify people, processes and technology across an organization.”*
Is ERP Right For My Industry?
Without even knowing the industry you’re in, we can confidently say that there have been innumerable companies of all different types of industries around the world accompanied with unique business models that have been able to realize the undeniable features and efficacy of ERP. Because of the flexibility built into the infrastructure, ERP’s can adapt to a wide variety of industries.
Here are some that depend on ERPs like NetSuite to help run their businesses:
And...How Exactly Does An ERP Work?
Good question! While ERP can be compared to an app, it’s important to know that it’s not a standalone app.
To understand it better, consider how you may use the Apple TV app which appears as one app but within it, you’re able to tap into other apps! That’s sort of how an ERP works! The same way your Apple TV app may speak internally to other apps to find out new shows/movies that are now available on their networks to provide it to you, is the same way your ERP would speak to all different parts of your business in order to provide applicable information to those who need it.
ERP systems are able to operate like this by running on a uniquely defined standard data structure that contains many different modules that each work to target a key part of your business and then coordinates with each other to give you a full overview of your business.
For example your accounting department might be letting your manufacturing department know that payment has been received and a shipment can be sent out while your CRM is also getting a notification to send out a shipment notification to your client! Having information like this readily available to necessary users as it becomes available across all departments of your business is essential to allowing every employee within your business to stay on the same page.
As mentioned, having all necessary departments in the loop is also key to allowing your team to be able to detect when things may need to be changed. For instance, if a client were to place a big order and manufacturing enters that stock is running low, a trigger could be set up to notify that more of a product needs to be made available which in turn can notify that the budgeting for something also needs to be increased.
ERPs deliver the highest ROI when all modules for every core component of your business are utilized so that you’re always receiving the most up to date and accurate information on every facet of what’s keeping your business running.
Do you have questions about what an ERP is?