The ERP system is
ERP stands for Enterprise Resource Planning (ERP). It is is the integrated and systematic management of business processes. In the modern world the ERP system is entirely based on software solutions and moreover these solutions rely on cloud computing.
ERP system – a true story
The ERP system is the heart, lungs and veins of the company. Imagine that over the years, the system has been adapted and developed to fit changes in the business environment and requirements.
It has gradually been moved away from the standard solution, and you are operating in a customised version. In addition, new needs have been solved with extensive use of Excel and other short term fix solutions.
The setup and workflows now depend on single persons who can remember how things works. This represent a risk to the company if key personnel leave the company or has to attend other tasks.
At one point, it will be contra-productive to continue adjusting. You will meet technical limitations and possibly financial constraints. Your company has thus accumulated a technical debt, which can be difficult to handle.
The initial response to this situation is to look around for a completely new solution. Most people understand that changing everything is like having a heart-, lungs- and veins transplant, and will consequently be an extensive exercise. The solution is to try to avoid getting in this situation again.
Should we keep the old ERP system?
The next generation of ERP solutions will most likely be in the cloud. This means that you buy ERP as a service (SaaS). Currently, the selection is somewhat limited, and especially for the more advanced industry solutions and solutions for industry and production. Some of the established vendors are re-launching old solutions, rewritten for the cloud. Others sell “cloud”-solutions that are in fact just your current ERP solutions outsourced to the vendor. The third option are vendors that have started with blank sheets, and made an ERP cloud solution from scratch, specially designed to be a real multi-tenant solution, and offered as a service in the cloud.
Say goodbye to the server park and maintenance costs
With a cloud solution, one avoids installing technology, infrastructure, upgrades, and maintaining old servers. Mirroring of servers, backup routines and physical security is included in the ERP system service.
There is the possibility of getting some resistance from existing IT personnel, but they will instead be able to spend their time supporting users, optimizing routines and workflows, focusing on what is really creating value for your business.
Predictable budgeting and cost page overview
Buying the ERP system as a service delivery will be more predictable, and cost will start running from the time you start production. This means that there is money to save in the project and system implementation period.
Your data is stored in a safe place and in a country without legal or political challenges.
In depth with the ERP system
The ERP system provides an integrated and constantly updated view of core business processes using one or more databases. The ERP system may have many areas of processing which we call modules, and some of the typical modules include sales, procurement, production, distribution, customer services and accounting. Depending on the size and complexity of a business there may however be many more modules integrated.
ERP systems keeps track of business resources and can somewhat express the summarized value of the organization at any given time. This summarization is done by collecting key information from the various modules such cash, raw materials, stock, production capacity, financial balances and future commitments.
Ideally the ERP system facilitates information flow between all business functions. And stakeholders outside the daily work can assess any relevant insights needed to manage the work and forecast the results.