Often when people find out what I do for a living, they ask me to explain why ERP is so beneficial for today’s manufacturer or distributor. After addressing this question for so many years, I felt that it may be easier to answer it by addressing some of the common misconceptions that are often raised:
- ERP is a glorified accounting package
No it isn’t - it is so much more than that. ERP is as limited to accountancy as football (soccer) is limited to Brazilians. ERP is an enterprise-wide solution and is the center for all company data and processes. It integrates all departments and activities so that the entire company is working off the same real-time data.
- ERP is strictly an administrative tool
ERP is both an operational and strategic management tool. Although ERP applications are often recognized for their ability to automate and support a range of administrative and operational business processes across multiple industries, they also have a critical role to plan in underpinning an organization’s corporate strategy.
- ERP doesn’t influence business decisions
ERP provides business management executives with a comprehensive overview of the complete business execution, which in turn influences their decisions in a productive way.
I will even go as far as to say that ERP is the overall best tool for management decision-making. It gives you the information you need, when you need it in a format that allows you to make pertinent business decisions.
- ERP is a stand-alone system
If we look at the growth of ERP over the years, ERP has grown and morphed substantially to encompass a much broader range of capabilities. ERP has no boundaries. If needed, it can link to and integrate with other products to make it self-enforcing. The right ERP solution often has the ability to integrate with specialty third-party products.
- ERP is rigid and inflexible
ERP technology is always evolving and keeping up-to-date with industry and technological trends and vertical requirements. A carefully chosen ERP solution allows the business to grow with the software, not out of it. Most modern packages allow a huge degree of flexibility for tailoring the functionality without source-code modifications. This in itself is one of the greatest advancements of ERP software over the past decade. In addition, ERP provides tremendous flexibility in allowing the production of dashboards, reporting and analytical analysis for better decision-making.