Creating ERP-systems from A to Z
When an organization improves and automates its business operations, the question arises of implementing enterprise resource planning (ERP) software. The system combines all the data, procedures and applications of the company into one whole, which increases the efficiency of both an individual employee and the entire organization. Sometimes it is difficult to find a ready-made system that will support all business needs. Therefore, companies often order the development of ERP software solutions. So what should you pay attention to when an outsourcing company is working on your ERP?
ERP becomes a kind of bridge between different departments of the enterprise. The system makes it easy to exchange data through a common interface. The program is so convenient that not only large enterprises, but also growing medium-sized businesses are interested in individual ERP solutions.
Why do organizations invest in ERP?
Like any users, it is easier for companies to trust programs that have positive reviews. ERP systems have a respectable image. It is confirmed by 95% of the Panorama Consulting Solutions survey participants. The companies noted that the enterprise management system helped them to:
- increase productivity (64%);
- stimulate the company growth (57%);
- reduce costs (57%);
- improve customer service (54%);
- simplify the staff work (54%);
- optimize system integration (41%);
- improve other tasks from inventory to sales.
If current corporate programs cannot provide the above advantages, it is worth considering how to implement more advanced software. The new system will solve existing problems and help the business to scale and grow successfully.
These are the reasons why companies invest in custom ERP software.
ERP increases business profitability.
The company’s success is directly related to new technologies. If business processes are tied to old systems, it is more difficult for a company to maintain productivity. Up-to-date software reduces the number of steps to achieve the desired results and thereby saves time. Employees make fewer mistakes and serve customers better when work processes are effectively established.
For example, thanks to the ERP solution, the manufacturer of industrial transport Motrec Industries saves about $ 400,000 on inventory. Companies no longer need to close for three days to count their inventory. ERP has automated this process, reducing the purchase time.
It is developed for the needs of a specific business.
Companies have the right to use a universal ERP system or order an individual solution for their needs. In the first case, the business receives an accessible program with useful functionality. But not all of the proposed functions are suitable for the business processes of a particular organization, so some of them are useless.
It turns out that a ready-made ERP is cheaper, but it does not include all the settings that are valuable for business. A custom software solution is created “turnkey”, where each function is thought out in order to meet the unique needs of a particular organization. With software developed for a specific industry, employees perform their tasks easier, faster and cheaper. A universal ERP system can be inconvenient and unprofitable.
Improves communication between departments.
ERP solves another very important issue — the exchange of information between company departments. Moreover, both within the same office and between branches located in different cities or countries. Cloud-based ERP tools remove geographical barriers. Employees can communicate with each other from different locations in real time without any delays. The system combines departments, processes and data of one organization.
Cloud ERP collects information from any Internet-connected devices: laptops, tablets and smartphones. This makes it easier for remote and field employees to access the system.
Gives access to current data.
All team members need to have access to current and accurate data in order to perform work operations efficiently and correctly. With ERP, companies such as Andersen evaluate the KPIs of their employees. Part of the information provided by ERP helps to communicate better with customers, increase the retention rate, and bring users to sales. A proper ERP system ensures that important business decisions are based on accurate data.
Eliminates copies of data.
Before the advent of ERP systems, firms with several departments or branches maintained different databases. When it was necessary to share separate information, the employee created a report and sent it to interested parties. This process was long, tedious and led to data duplication. And it is much easier to make a mistake in excessive information.
With ERP, information is not duplicated, because employees have access to a centralized repository. You can keep accurate financial records and make clear forecasts without making mistakes.
Popular ERP features
Companies order ERP to improve workflows, increase efficiency and unite different departments. The system allows you to manage employees, inventory, orders, assets, expenses and perform other important operations. ERP software solutions can be adapted to personal business requirements by adding some functions. Usually companies use the following functionality:
- API integration
An API is a mechanism that connects two or more applications to each other. Thanks to the application programming interface, company departments create, modify, delete or send data without delay. In addition, with the help of customizable APIs, full-time enterprise developers can independently add new functions to the system.
- Task automation
ERP allows you to automate repetitive operations: payroll, billing, order processing, filling out reports, and so on. The information does not need to be entered manually, and the probability of errors is reduced to zero. In addition, due to automation, customers get answers to their requests faster.
- Advanced analytics
ERP reporting tools and advanced analytics provide a quick view of the business state. For more convenience, ERP demonstrates data in the form of charts and tables. Reporting tools can track almost any information: search traffic, impressions in social networks, conversion and similar sources. Reports are created, saved and distributed in various formats.
- Customer relationship management
The customer relationship management (CRM) function is often connected to ERP. It is a powerful tool that processes marketing information and improves customer service. With the help of the system, sales are tracked, advertising campaigns are evaluated and other important marketing procedures are carried out.
Combining ERP and CRM under one roof is profitable and convenient. Both systems store customer information. By integrating them with each other, companies avoid duplication of information and make them complex. When CRM is connected to ERP, the organization accurately conducts inventory, calculates the cost of goods and performs other operations.
- Financial management
This important tool makes it easy to collect data, create reports and share financial information with partners. The ERP financial module is automated, includes analytics, forecasting and reporting tools. Simple accounting errors are easier to detect and avoid. All financial documents are automatically registered, so it is impossible to lose them.
- Process tracking
With this function, the company’s management receives valuable information about how productively employees work. This is how managers see what needs to be improved in business processes in order to develop and grow.
When should an ERP system be developed?
The introduction of an ERP system into the company’s work is not an easy step and a serious investment. The manager analyzes existing processes and systems to understand what needs to be optimized. There are several “beacons” indicating that your business needs an ERP system.
- The current systems cannot work with each other.
As the business develops, it acquires software systems that eventually become obsolete or cannot make friends with each other. ERP becomes a single platform with a common repository of up-to-date data, to which various departments of the company have access. This is normal when a business outgrows existing software. It is important to notice this in time and think about a more flexible ERP system that will grow with the business.
- The company has insufficient CRM.
If sales and service lag behind, the problem may lie in an imperfect customer relationship management system. After all, it stores user contacts, the history of communication with them, an archive of orders and lists of incomplete sales.
The CRM and ERP tandem is important so that specialists always have up-to-date information at hand. When companies do not integrate CRM, the sales department may not know how many products should be shipped, and employees spend time searching for the necessary information. When the system works as it should, customers are satisfied and are more likely to re-order the product.
- It is not possible to create special reports.
Ready-made ERP systems have template reports that do not always meet the needs of the organization. They cannot be configured, so it becomes difficult to manage industry processes.
The custom-developed ERP is adapted to the business needs and includes accurate data and indicators in the reports. The system can be configured to quickly and easily create special reports for a specific industry.
- Users do not have access to the software on smartphones.
With smartphones and tablets, you can get information on the go anywhere and anytime. If the company’s software is not available on mobile devices, it loses time and money, because employees are inactive outside the office. For example, when they work from home or are on a business trip.
ERP software solutions can be installed on any device and connected from anywhere where there is Internet. Therefore, the employee stays in touch even outside the office.
- The company cannot satisfy customer requests.
If the client is dissatisfied with the company work, he/she leaves. At the same time, sales and profits are reduced. ERP improves business processes. Users get answers to their queries faster and become more loyal to the organization.
ERP development and implementation requires time and resources. It is important to take into account the current business problems and its needs in the future. Before looking for an outsourcing company, you should make a list of business requirements. It usually indicates the “pains” of the organization and the business processes that can satisfy them. With this foundation, business analysts will quickly determine the functional requirements and give a start to developers.
What to consider before developing an ERP?
Developers create an ERP taking into account the wishes of the client. Before creating an individual ERP software, customers should consider the following nuances:
- The maturity level of the company.
Maturity refers to how effectively an organization manages business processes. There are five levels of maturity:
1st — the processes are not established. This is an entry level with inconsistent management. The company does not have stable processes, and its success depends more on the talent of full-time employees. Business often goes beyond budget and time. Because of the chaos, the company acts spontaneously and without any nanotechnology.
2nd — reactive processes. This is a manageable level that includes methods to save business during chaos. All work products and services meet the established standards, requirements and goals. Simple technologies for working with documents have been introduced.
3rd — a certain process. The organization is able to create infrastructure and achieve general and specific goals. The processes at this maturity level are described in more detail. Firms manage them proactively, because they better understand the relationship between them. The company already uses the software.
4th — a predictable process. This level is aimed at obtaining predictable results with controlled variations. Companies are able to predict the performance of the process and use specialized software.
5th — the level of innovation. When stable and controlled processes are established in the company, it is possible to start improving business products and services. Special software improves technological processes and integrates with the IT infrastructure.
2. Interested persons.
Before developing software, it is worth considering the wishes of those who will use it. The project manager needs this information at the stage of business analysis and architecture creation. Proper communication with stakeholders will help to solve problems effectively.
3. IT-infrastructure.
The current IT-infrastructure determines what the ERP should be. After all, when developing a system, program compatibility is taken into account. Some software works only with specific platforms and servers. If there are technical problems in the old IT-infrastructure, programmers are able to solve them with custom ERP software development.
4. Budget and needs of the organization.
The cost of ERP development is one of the biggest problems for companies. It is important for organizations to feel the balance between “I want” and “I can”. Basically, the price of the issue depends on the size and complexity of the program, as well as whether it needs to be implemented and supported in the future. The scope of work, timing and pricing model are discussed with the outsourcing company. Developers can always offer compromise solutions and advise priority ERP functions.
How is ERP development going?
It should be understood that custom ERP software development is a process that includes certain sequential phases. When a client comes with a request, it does not mean that programmers immediately start coding. The project goes through a number of stages:
Goal setting
Any activity starts with a goal. And clear goals are very important for an IT-project, because they serve as a guideline for participants. The task of the customer is to note the main goals of the organization and how the new system will help to achieve them. According to the time management rules, goals should be specific, measurable, realistic and time-bound.
Definition of software functions
In order for developers to know which functions should be developed, it is important for the customer to describe them. When there are no functional requirements, a business analyst of an outsourcing IT company takes over their development. He/she communicates with the customer, clarifies all possible details and forms a specification of software requirements. The entire project will be based on this document.
Creating product roadmaps
A product roadmap is similar to enterprise software development with specified deadlines and the necessary resources. With its help, managers coordinate with the team the growth and changes of the product over time. The development project team gets a context that helps to do the day-to-day work and understand the further direction.
Prioritization of functions
As a result, we get a large list of functions that need to be implemented into the system. It is impossible to implement them at the same time. There is not a budget and time for everything at once. Therefore, functions are prioritized in order to create the basic and most important ones first.
Creating and approving an MVP
Thanks to prioritization, it is possible to implement MVP — the minimum viable product. It has enough value to attract users, generate profits and customer reviews.
ERP software development
The enterprise software development itself includes the creation of functionality in order of priority in accordance with the accepted schedule. Programmers take into account which applications the company uses and how to integrate ERP with them.
ERP testing
During testing, specialists check whether the new system meets specific functional and non-functional requirements. Security testing, performance testing, load testing and other types of checks are also carried out.
ERP release and integration
After the ERP is released, it can be integrated with other systems to improve internal workflows. When ERP is combined with internal tools, employees can communicate with each other and improve their productivity.
Custom ERP software includes only those functions that the company really needs. After the completion of enterprise software development, the process does not end. Organizations will have to:
- teach staff to use the new program;
- continue to improve the software based on user feedback;
- provide scheduled maintenance of the software;
- enlist technical support staff.
Conclusion
As you can see, there are many factors to consider before creating an individual ERP. The system should not only meet the needs and goals of the company, but also be affordable and compatible with old corporate programs.
