For many enterprises, an Enterprise Resource Planning or ERP system is already the backbone of business success. In 2022, 60% of executives stated that digital transformation was their most important driver of growth, and that trend will only continue to expand. 

Still, some entrepreneurs hesitate to change their business operational solutions because they feel overwhelmed with the technical challenges involved.

If that’s you, you’re in the right place. Let’s talk about the benefits of ERP software and the challenges in picking the right one.

Understanding ERP and Its Benefits

In a nutshell, ERP refers to a business software suite for business process management and back-office automation. Think of it as a virtual representation of your operation, with components dedicated to finances, supply chain management, customer relationship management, job costing, service management and analytics.

These days, many modern ERPs include artificial intelligence (AI) and machine learning (ML) capabilities to enhance operations management. For example, AI assistants can help automate core business processes in different departments, analyze data patterns, prevent manual process errors and even power chatbots for employee training or customer relations. Depending on the way in which ML is embedded in the respective platform, they can also use historical data to continuously improve operational efficiency or adapt to user preferences.

While it’s easy to recognize the technical capabilities of a modern ERP platform, measuring their ROI can be a challenge. Here are some of the benefits to look for in a successful ERP implementation:

Cost savings: ERP software eliminates redundant and duplicate processes and therefore reduces labor expenses by providing a single source of truth.

Increased efficiency: Streamlined workflows and automated data sharing reduce errors like wrongly entered shipping addresses in order management.

Revenue optimization: Increased process visibility allows you to increase sales, identify cross-selling opportunities and match human resources to demand.

Financial accuracy: Real-time data sharing ensures accurate financial management, billing and auditing.

Enhanced decision making: System-wide data access and business analytics empower strategic and informed decisions across all departments.

Spot risks: Live data streams allow you to address issues in your supply chain or service offerings as they happen, not just after the yearly report.

Brand reputation: Consistent order delivery and customer satisfaction build brand loyalty and further trust in you as a reliable business partner.

Scalability: ERP systems facilitate future business growth through customizable features and extension capabilities.

Overall, ERP maximizes ROI by streamlining operations and reducing costs and errors while enlightening an organization with unified data and business intelligence for competitive decision making. While the initial implementation process requires an investment of staff time and capital, the long-term tangible and intangible benefits make an ERP system invaluable to the business.

ERP Deployment Models

Although the businesses are slowly but surely moving toward the cloud, you’ll still encounter various deployment choices for ERP systems, namely on-premise, hybrid and cloud solutions. If you’re still undecided which one to pick, here are some factors to consider.

On-Premise ERP Software

Your first instinct might be that cloud solutions are less secure and inconvenient, but on-premise solutions aren’t without their own faults. For one, they allow you to choose your own hardware, giving you more control over functionality and performance.

However, it should go without saying that these hardware options translate to higher long-term costs. Some enterprises may even find that they’ve boxed themselves in because their initial hardware investments can’t be updated as quickly or easily as a cloud solution.

An important factor to consider is the amount of on-premise support you’ll require. In-house solutions mostly require in-house IT staff, which means you’ll either have to hire technical support yourself or have to contract an outside consultant to do upgrades and keep your systems secure and backed up.

An on-premise solution may seem to also make you more independent of the internet because it will only need your internal network to function. However, businesses today are connected in multiple ways to the internet for email, banking and numerous other functions. Although your software is installed on a server in your office, you will still be dependent on the internet and vulnerable to security risks.  

An on-premise ERP application is a viable choice for businesses requiring direct access and control of their systems, but this does not come without a cost in money and operational flexibility. Still, you need to factor in system support, aging hardware, software update cycles, backups and security systems which still require a significant investment in staff, hardware and maintenance.

Cloud ERP Solutions

When we talk about cloud ERP solutions, we usually refer to a software license that gives you access to certain functionalities on a vendor’s servers. This setup has certain advantages, the first being acquisition cost. Where an on-premise ERP system can require a significant initial investment for hardware and software, cloud solutions cost you a subscription license fee usually based on users. Depending on your ERP vendor, even the fees may be staggered based on your needs.

Cloud solutions also translate to lower maintenance costs because the provider takes care of backups and software updates for you as part of the subscription. These costs are basically lower than on-premise solutions because they end up being shared by multiple companies that are all using the same software in the same data center.

Another factor to consider is your system’s scalability. With ERP cloud solutions, you can adjust your chosen modules, system settings and user counts simply by updating your subscription. That same change can require a hefty investment if you have to buy all your own servers and set them up yourself. And, if you need to reduce user, storage or system capabilities, all you have to do is update your subscription. With your own servers in house, you don’t have this flexibility. 

That said, the cloud doesn’t just have advantages. While it is possible to adjust software modules, users and services, some vendors don’t allow customization and access to ERP tables are restricted. So, if you already know that your business operations require an especially unique setup, you need to confirm your chosen ERP cloud solution allows for customization and configuration. 

In short, a cloud-based ERP can be a great solution for a small to midsize business trying to save on initial system costs or those with limited resources for technical support. For corporations with several branches, they can even contribute to streamlined processes and reduced downtime. However, If you are in an area with an unreliable internet connection, you might find cloud solutions limiting.

Hybrid ERP Solutions

It’s not fair to throw all hybrid ERP solutions in one basket because the term can apply to a wide range of setups. Maybe you simply want to outsource data storage without having to rely on a certain vendor’s servers. Maybe you choose to outsource one feature to a vendor’s server-based solution. Or maybe, you’re just trying to lower acquisition costs while maintaining a level of flexibility that the most prominent vendors don’t provide. 

The reasons for a hybrid solution can be incredibly diverse, which is why it’s hard to blindly recommend the entire category. As a rule, it’s worth looking into hybrid solutions if you notice that on-premise and cloud solutions don’t check all the boxes for you, whether that’s in compliance, setup flexibility or support.

Challenges and Weaknesses of ERP Software

No system is perfect, and given the amount of complexity of ERP solutions, it’s no wonder they come with certain weaknesses. Here are some technical and human factors to consider.

First, we can’t overstate the importance of a thorough needs assessment, scoping and estimating process. Even though cloud ERPs come at a lower price tag, you still have to consider costs for consulting, training, customization and data migration. 

Also, it’s important to account for the employees who end up working with the software, which can translate to additional training and change management. Besides these factors, you should also plan for enough time to migrate any legacy data into the new system.

Industry-Specific ERP Solutions

Some of the issues we’ve mentioned can be a result of the unique needs of your business and industry. After all, a manufacturing company has to track different processes than a mining enterprise. Most mainstream ERP solutions successfully cover the needs of countless businesses and industries, but you may also find that there is an ERP solution built specifically for your industry.

AIM Computer Solutions, for instance, offers a manufacturing solution optimized for automotive suppliers, and Dice Corporation has a system built specifically for the security industry. However, both of these software companies have decided it makes more sense to integrate to the Microsoft Dynamics ERP solutions that The TM Group represents instead of building their own accounting systems. In the past, many industry-specific solutions built their own accounting modules too, but this has changed quite a bit in the current age of cloud ERP.

Ultimately, the advantages you realize from solutions like these depend on your industry. In many cases, you’ll benefit from industry-specific features or possibly even product updates that help you keep up to date with industry trends or niche regulations. However, if you’re dealing with diverse lines of business, an industry-specific package can really limit your operations.

Data Privacy, ROI and Other Factors To Consider Before Choosing an ERP Solution

Pulling it all together, it’s clear that you’ll have to consider a range of factors before choosing a new ERP solution. 

To start, you should compare various solutions from several vendors, weighing the pros and cons of each to determine the best fit for your business needs, budget, IT resources and scalability needs. Data privacy, security and compliance consideration should certainly play into that decision. 

No matter which solution you pick, you should always have a few key project success indicators in mind, whether that’s project timing, implementation speed or cost savings. Some systems may not give you that room to breathe, so you should consider expected business developments from the start.

With all those technical questions out of the way, you also want to take a look at different vendors’ support commitments, integration capabilities and overall reputation. This will ensure your system and provider aligns with your business values and you’ll get the support you need. If the solution is delivered through a partner channel, like the Microsoft’s solutions that The TM Group represents are, you also have to make sure you chose the right implementation partner. Since the software is the same no matter what partner you use, the partner selection is just as important as the software selection.

Finally, it’s worth planning for internal feedback, system training and change management. These strategies will help you notice department-specific issues you may not be aware of and adjust your expectations based on employees’ technical knowledge and attitudes toward the new system.

Find Out What ERP Can Do for Your Business

ERPs can help you run a more effective and profitable business, whether that’s through optimizing your customer service, efficiency gains, risk management or cost savings. Still, it’s easy to get lost in the weeds when you’re researching all the options available and to align them with your strategic business objectives.

If you’re ready to change your business systems but are still undecided about the right solution, the TM Group can help.

Speak with an expert today to find out which ERP system may be right for you.

Today’s business world is accelerating at an unprecedented speed, leaving less and less margin of error for the growing number of competing companies. Most companies see lean processes and automation as the answer. Especially mid-size enterprises who increasingly rely on ERP systems to provide business process standards into a technical frame that makes them easy to utilize and apply in hectic everyday business life.

Therefore, we would like to present the major benefits of ERP software and explain how you can squeeze the absolute most out of your solution.

We’ll discuss…

– ERP system’s key advantages
– Criteria to consider before implementing one
– The best timing for switching systems
– Industries that will benefit the most from ERP solutions
– Future trends in AI and automation that can boost your operations even more.

Ready to transform your business? Then let’s dive in!

The Key Benefits of ERP Systems and Why Your Business Needs One
An ERP system aims to streamline your enterprise workflows by offering one tool that supports each of your operations departments, from human resources and sales to supply chain management and accounting.

Since all your data is in one system, with AI and machine learning checking your work, you not only reduce manual data entries but back-and-forth communication between your departments. Therefore, you’re improving your team’s productivity while reducing room for errors.

These days, you can find an ERP solution that covers most of your base system requirements and expand its functionality through add-ons or development of plug-in solutions to your liking. However, many base ERP features will simplify your business no matter if you’re in manufacturing or the service industry.

The most noticeable advantage of an ERP platform is that you’ll automatically streamline your entire enterprise because everyone is using the same system and data. Every department benefits from transparency and reliable records. Within your supply chain alone, you can benefit from the cost savings of a lean inventory thanks to increased accuracy and predictive data analytics — allowing you to improve vendor relations and predict future demand.

Just as this solution saves you unnecessary communication between the warehouse and the sales department, the streamlined processes of ERP applications guarantee that customer service can access the right data faster. This frees up time and enhances the overall customer experience, even more so if you pair your ERP system with a CRM solution.

Finally, advanced financial management will give you, as a business owner, peace of mind. Once an integrated accounting software eliminates the need for offline manual processes, you can rely on real-time data. Up-to-date business records will not only help optimize your cash flow but also enable you to make better decisions. Plus, it will make tax audits a breeze. Combine that with improved data security, and you can see how the right ERP solution will turn you into a more valuable business leader.

Your Business Is Unique. How Do You Choose the Right ERP System?
Maybe you’re already using business software; maybe you’re still relying on pen and paper to track much of your operations. Whatever the case, you should start with a needs assessment that documents your current strengths and pain points across all departments.

That can sometimes include getting an objective outside perspective on your business processes from a consultant that isn’t also a software implementer. Either way, you need to be sure everyone from your CFO to human resources throws in their two cents. It’s better to collect too much information at this point than to have missing business requirements later.

Implementing ERP solutions can also require you to consider integrations, whether you have to incorporate legacy applications or extend the core system’s functionality. If you can rely on standardized connectors such as APIs or out-of-the box integration tools, you can avoid copying data back and forth. This will both get your ERP project off the ground faster because developers will already know how to connect to their ERP solution and also make it easier to maintain into the future.

Especially if you haven’t used any fully integrated business software solutions before, you need to make the switch from working around insufficient systems to actually tracking all our workflows and business data within a single business platform. This may sound trivial, but we can’t neglect the mindset shift necessary for successfully implementing modern ERP platforms. The best applications won’t help the organization if everyone creates their own workarounds and spreadsheets instead of using the ERP solution.

Maybe your team simply isn’t used to tracking every detail of daily business operations, or maybe you’ll discover some unpleasant truth you didn’t expect because you never measured it before. Some team members might feel uncomfortable or threatened while migrating to your new system because operating as usual with their old systems and processes gives them a sense of security. A reliable system alone won’t get you to the finish line, so it’s important to consider your team’s current habits and technical skills. You can’t improve business operations by automating dated and bad business processes.

Every enterprise goes through a different implementation process, but everyone needs to manage expectations from the very start and document those project adjustments along the way.

It’s also a good idea to inform yourself about the various ERP vendors, not only to find the right features but to know you’ll get the support you need from a reliable business partner with a proven track record in your industry. Maybe you can already rule out an ERP vendor or two because they don’t offer your preferred support options.

Finally, it’s time to talk numbers, whether that’s ones and zeros or dollar bills.

Your ERP system needs to both meet your requirements, of course, and your budget. Cloud ERP systems come with different pricing models than on-premise solutions, and if add-ons or customizations are needed, this will also influence your project’s total cost.

When Is the Right Time For ERP Implementation?
The question of when to move on to an ERP system requires a two-part answer. First, you should consider your long-term goals and understand how the systems you’re using will support them. Second, you have to find a good time within your current business cycle so that the ERP implementation won’t result in a slowdown and financial losses.

For some companies, it makes sense to implement an ERP system after they’ve hit a certain annual revenue target. However, if your enterprise faces complicated operations and high amounts of manual data entry, investing in a comprehensive ERP solution from the beginning can actually help you get to the finish line faster. After all, a streamlined business can result in higher revenue, lower costs and greater profits.

Whichever point you choose, your best path is to switch to an ERP during your business’s slow time. We know that’s not always a choice, since some businesses are in a constant growth mode. However, if you can influence it in any way, don’t pick the busiest season of your business year. You may also want to plan to add new staffing in preparation for the ERP project to reduce some duties of an existing staff member with a good understanding of your business operations to lead the project full-time or at least most of their time.

It is also helpful to smooth out any poor business processes before implementing a new ERP system, but we know that some business owners also use the implementation of an ERP system specifically to force change within their company and to eliminate inefficiencies. Either way, it is very important to plan for sufficient staff training and rollout phases across your company so that everyone on your team has time to get accustomed to your new processes.

These Industries Will Benefit the Most From ERP Software
Obviously, every company can benefit from streamlining its business operations, although investing in a full ERP system may not be worth the initial investment for every small business.

As a rule, we can say: the more moving parts in your enterprise, the bigger your ROI for an ERP solution.

That makes certain industries a natural fit. The service industry and manufacturing businesses are both challenged with detailed business planning, in which you can’t afford to lose track of special orders and ever-evolving regulations.

But lots of industries can benefit from lean operations — from construction and the automotive sector to retail brands and health care organizations.

That’s not to say that all those industries are the same, though. It’s critical to find an ERP solution and implementation partner that respects your unique requirements. For a medical facility, meeting compliance with privacy standards will be more important than it would in a waste management organization, while e-commerce businesses will put more emphasis on flexible inventory and order management.

Whether you hope to streamline your supply chain or improve customer service, make sure the ERP setup you choose will support your business goals.

Know Your Business Future With the Power of Data
If you’re still hesitant about making the jump to ERP, we understand. Change can make everyone uncomfortable, especially when it immediately affects your business. That said, we feel you’d be at a disadvantage if we didn’t tell you about future industry trends.

Thanks to the increasing adoption of artificial intelligence and machine learning, you’ll soon see automation beyond basic rule-based processes. That means you can hand off a widening amount of complex tasks that would otherwise require your team’s cognitive abilities, even within specialized niche solutions targeted at your industry.

And since cloud ERP solutions are increasingly common, it’s easy to put that power in the palm of each colleague’s hands, giving them the flexibility many of us have come to expect over the last few years.

While it may take some getting used to, you can rely on predictive analysis for more and more complex tasks every day, from automated data cleansing to demand forecasting or regression analyses. That frees up your employees’ time to tackle those unique challenges you can’t automate.

We don’t have to tell you about aggressive competition in your niche because you already know best. But choosing the right ERP solution can give you the competitive edge you need to both adapt to an evolving business world and beat your competitors.

A tailored ERP system will streamline your business management, boost customer satisfaction and position you as a reliable business leader in your industry. If you would like to learn how the right solution can make your business soar, get in touch with our team today!

Imagine a world where all your employees, whether in accounting, customer service or manufacturing, can access and edit your business data in real time, making business process management a breeze.

No need for you to painstakingly track customer orders and your suppliers manually before talking to manufacturing. Once a team member enters data into the ERP (enterprise resource planning) system, it’s there for everyone to use, from your human resource department to project management and accounting.

Now, think of all the time your employees currently spend hunting down business data during customer and management meetings or even financial audits. How much would your enterprise save? That’s what the best ERP systems can do for you.

How Does ERP Software Help Your Business, and Why Should You Care?
While ERP implementation always comes with an initial investment and a learning curve, it can help you streamline each and every business process.

This not only reduces friction in your operations, inventory and supply chain, but the best ERP software also eliminates manual and often redundant data entry across your business and its multiple systems. That way, you’ll always have access to the most recent business intelligence — no matter if you’re trying to track a recent complaint in your order management tool or gathering accounting details about a supplier.

With the right ERP system, you can enhance your operational efficiency and improve collaboration throughout your organization, allowing you to reduce costs through supply chain management, regulatory compliance and inventory management.

Thanks to organization-wide transparency, you’ll make more informed decisions and become a more valuable business partner.

It’s good to keep in mind, though, that you should establish expectations before making any changes. If you’ve reviewed your business processes, done your internal research and identified pain points in each department, it’s much easier to find the right solution.

How To Choose the Best ERP System To Serve Your Business Needs
Faced with a market that offers very similar solutions that fit in numerous industries, finding the right ERP vendor for your business intelligence can be challenging. If you’re running a small business, a certain ERP tool might not even make financial sense. Perhaps you’re considering an upgrade because your Dynamics GP system will no longer be supported.

According to G2 and our decades of experience, these six solutions are pretty typical choices that usually fit the needs of most midmarket companies best:

– Microsoft Dynamics 365 Business Central
– Sage Intacct
– Oracle NetSuite
– Acumatica
– JD Edwards EnterpriseOne
– SAP Business One

Whether you’re looking at NetSuite ERP solutions, Microsoft Dynamics or yet another option, the feature list always overlaps in large parts. We can’t blankly state whether SAP ERP solutions are “better,” because your software needs to be better for your business.

So usually, it’s best to assess your current pain points and business intelligence challenges as well as your organizational goals. Consider everything from manufacturing and order management to legacy software or specifics of your supply chain.

Your solution, or the ERP module complementing it, should be able to scale with your business, and it should also be tailored to the core segments of your business.

The choice between two similar ERP platforms might come down to personal preference, but your future system should at least support your core business. A specialized manufacturing ERP solution will offer more bells and whistles for order management and inventory tracking than a general-purpose solution.

Choosing the right ERP software vendor is never about one feature. You need to consider a range of needs to map your business requirements matrix with as much detail as possible. For some enterprises, the hardware to support the software will strongly influence that decision unless you decide to embrace the cloud. Others will care more about their cloud ERP platform’s reputation or financial management than local support.

Of course, you want your ERP tool to cover your core business requirements, like accounting, project management, inventory management and/or customer relationship management. But for a final decision, you need to translate your most important needs into features, which may require an objective perspective from the outside.

If you have trouble finding the right feature set for your business goals, it may be best to look for an independent ERP consultant with a track record of helping organizations with ERP selection projects. They will respect your unique needs and guard you throughout the process of selecting the best ERP software solution for your organization.

With so many of the features of ERP solutions being so similar across solutions, choosing the right ERP consulting, development and implementation partner is even more important than deciding if you want a solution created by Microsoft, Sage, NetSuite, Sage, Acumatica or SAP. Look for a partner with a similar culture, stable business model and experience in multiple industries — especially your own. It is best to choose a partner small enough to know you on a personal level as well as being large enough to serve your organization’s specific needs.

Help Your Team Transition To Make the Most of Your ERP Solution
To ensure that your ERP system can really streamline your project management, it’s important that you make time for the proper user training and give your team the opportunity to overcome any reservations. You know your own team best, so try to plan accordingly if certain departments need more support during the new ERP solution’s rollout.

If your human resource department is the only one that needs to migrate data from legacy systems to the new solution, and if your sales reps hesitate to rely on the new solution, maybe you can help them with additional training, even though the warehouse team doesn’t need it.

For a smooth transition, you want to avoid frustration with the new ERP solution wherever possible. The seamless migration of legacy systems data is only the first half of that equation. It’s also critical that you support your team continuously so that minor frustrations don’t lead to the assumption that the new system means a step back for themselves.

Understand that trusting automated and new business processes often requires a mind change, and that can demand a lot from your team if they had to rely on several inconsistent but familiar systems in the past. Remember that they want to do a good job, so if they hesitate to trust the new system, they may need more training and hands-on experience before the new system goes live.

Once they recognize the tangible value, they’ll happily trust your new ERP system. However, for your new solution to actually save you money, it’s crucial that your team trusts those features and doesn’t try to continue working manually and around the system.

Here at The TM Group, we want to empower enterprises and their employees with technology. Technology that doesn’t contribute to reaching your organization’s goals doesn’t serve ours either.

If you’d like to learn more about how ERP systems can benefit your business, get in touch with our team!