ERP systems have been deployed for the purpose of reducing costs through efficient management of materials and processes. ERP systems were built for just few business needs like order management, inventory control and account payables in 1990s but now things have changed and ERP systems of today are fully capable of running complete businesses successfully.. (more…)
Whether to go for the cloud-based or on-premises ERP solution is the question which most people ask? Erpisto ERP is getting popular day by day as different vendors provide the best and sophisticated alternatives as compared to the on-premises ERP implementations. Cloud-based ERP offers plenty of advantages and only few disadvantages which makes it a perfect choice for most businesses. Small and medium sized businesses which don’t have many resources to support conventional on-premises solution can make best use of the cloud-based ERP solution.
Some of the advantages of cloud-based ERP solution are:
Cloud based ERP system takes less time to get implemented as compared to on-premises solution. The reason is that the cloud system is already set up and you just need to get plugged into it. However it is important to note that reengineering of the business processes takes same amount of time no matter you choose to implement cloud or on-premises ERP.
Cloud-based ERP solution cost less than an on-premises solution as you share the server hardware, overhead and all other costs with different customers on the vendor system.
ERP system is set up at the vendor’s site so it is easy to install your ERP system. Staff can guide you throughout the installation as they are familiar with the system. However, downside to this is lack of flexibility as you are limited in how much a customization can be done to the basic ERP system.
When you opt for the cloud-based ERP system then you don’t need to worry about the upgrades or any other maintenance as it is taken by the vendor. Disadvantage to this is that you have to upgrade on vendor’s schedule and this can be a problem if you have customized your cloud-based ERP system.
Staffing costs can be controlled as you share the cost of highly skilled IT staffers with vendor’s other customers. You can also avoid the problem of under-utilized staff who don’t have to spend time in maintaining ERP system which is beneficial for small businesses.
Cloud-based ERP systems charge monthly for their services and this let you make the right predictions for the costs unlike an on-premises system. Cost of cloud-based ERP solution can vary according to the size of your system. Large scale enterprises prefer on-premises system while small and medium scale enterprises usually go for cloud-based ERP.
Choice of a cloud-based or on-premises system is not an easy one and you need to carefully weigh your needs against the benefits and costs of both system before going for the right one.
People have started to overcome their fears regarding data security in the cloud and now they have started believing software as a service as a solid solution for their ERP. Getting migration done to cloud based ERP is not an easy step like signing a document or giving all the work to the vendor. Steps need to be followed for preparation when you talk about your organization data.
Preparation needs to begin before your company makes choice for the vendor. You need to address the questions like will you still own your own data and how much comfort you will have with the data generated by cloud based ERP solution with other applications that your organization uses. Data is your no doubt but vendor lock in is an emerging trend and this can make it difficult for customers to obtain backups of data to move data to another cloud vendor or on premises solution. You also need to consider will it mesh seamlessly with other systems or you require third part solution or some sort of plug in for data exchange.
After selecting the most suitable vendor you need to prepare your data to move it to the cloud. Landscape analysis of the data needs to be done to understand the structure and how will it work along with the new system. You can also model the interactions and links and when you are done with this data assurance phase begins. Data needs to be profiled to see which data is of insufficient quality to get moved to the ERP system. Data cleansing needs to be done to remove and correct the data that is corrupt, incomplete, inaccurate and irrelevant. Data verification is done to ensure that it is accessible and in the right format for the cloud based ERP solution and you need to determine how this format will affect other systems.
Recent studies have revealed that data migration of the data which is not ready for the newly purchased ERP solution can cause plenty of problems for the implementation. Best practices needs to be followed in order to let the data migration provides an effective foundation and it is also important to review the regulations and standards for specific industry and geolocation as this will help to ensure that you can not only move your data to ERP solution but you can share it with the industry specific applications while remaining in complete compliance with rules and regulations which can make things difficult for you in the future.
Selection of an ERP consultant is definitely and important and time consuming process for any company especially for small to mid-size organizations. These organizations cannot afford large consultancies and they also cannot handle ERP implementations on their own. Questions which small and mid-size businesses must consider while making choice of an ERP consultant are:
Few ERP consultants favor specific ERP due to their own benefits and this trend has certainly increased now. You need to make sure that your ERP consultant is not receiving any kind of incentive on specific software which you implement or purchase. You need to make choice of consultants who are not resellers and who don’t take referral fees from vendors as this is a common tactic by many vendors.
Some ERP consultants pass the initial test but they don’t have understanding of different ERP systems either because they are short of experience or because their focus is narrow with different options available in the market. Small to mid-size organizations must give special consideration to this aspect as they usually have to give more importance to the myriad of industry specific options. You need to ask your consultant about his/her hands-on experience and also about the projects which they have evaluated over the years.
You need to consider the methodology of your ERP consultant as it is a key differentiator and point of value for best ERP consultants. No person can fine tune methodology even if he/she has plenty of experience or talent. Robust methodology is important as no one has the level of understanding to change the methodology later. You need to make sure that your ERP consultant has a comprehensive and well defined methodology to minimize the risks associated with ERP.
These few questions need to be asked from the ERP consultants while hiring them for small or mid-scale organizations and it is important to leverage an efficient framework which best fits your organization needs.
Best manufacturing ERP can improve the productivity through perfect time management and mobile solution. Companies usually find it difficult to complete everything that needs to be done in dedicated hours of workday. They look to maximize the output and profit and minimize the amount of time spent on tasks. A perfect ERP solution let managers and employees improve tier business practices and they also feel more connected to each other.
It is always important to focus on quality rather than only going for quantity and system developed for time management can only work if commitment level is perfect as taking too many tasks at the same time can trump even the best resources and go getters. Manufacturing helps by utilizing the tools and techniques to make daily processes more efficient and supporting team members to enhance their skills and become more productive with time.
A perfectly managed mobile system allows you to enter data in to digital database which certainly saves time and keep workers connected with real time updates on the inventory data. Scanning different labels as products also help in making shipment to customers which ensures that right quantity and item are sent. Mobile feature in ERP manufacturing software let the employees print paperwork and receipts from different locations.
ERP software also let you add employees to new jobs, monitor shift schedules and track labor time. A perfectly designed manufacturing ERP let the employees get power to clock in and save job schedules to make procurement done at the right time. ERP manufacturing system is necessary for the modern manufacturers however different aspects must be considered while making choice for any specific ERP according to the specific requirements.
When you are looking to choose an ERP solution for small business, you need to carry out a needs analysis, determine whether ERP will benefit your business or not and then hire a consultant or team of consultants to guide you through the vendor selection process. You also need to consider how business differs from each other in requirements and the questions like cloud vs on premises and open source vs proprietary.
While making selection of an ERP software small businesses need to emphasize flexibility over the control according to the experts. Small companies usually needs an ERP software which typically offers basic level integrated modules and built in best practices to keep their operations going smoothly. Ideal ERP solution for small businesses needs to be modular, affordable and adaptable and it must offer the flexibility to be implemented quickly with minimal training.
Small businesses usually choose cloud based ERP solutions with minimum in house technical support and low capital investment with a strong desire on core competencies. When you talk with a broad perspective then you find out that on premises ERP is more customizable and provides complete control over uptime and security and is more suitable for the companies with stringent reliability and security needs but when you talk about the total cost of ownership then expense of managing and owing own server and backups is high which makes small businesses budget run out of on premises ERP.
If you have any concern regarding software adaptability then open source is better option as compared to proprietary. Open source is appealing because of its less cost as well as no software licenses are required, fully customizable and it mitigates the risk of software vendor going out of the business. On the other hand open source software products are not as mature and well maintained like the proprietary ERP solutions and they will provide very little or no support at all.
If your company is looking for an ERP solution with the personalized support that is flexible enough to meet your future needs and demands for next few years then you need to take your time make the choice carefully. You need to look for the ERP systems which are marketed towards businesses in your industry. Solution which you consider must be affordable as small businesses tend to have few resources and they need to plan all the things accordingly. Some questions which you ca ask from a potential vendor are:
Small businesses usually have an advantage of carrying out informal communication between employees and management which reduce the decision making time and facilitates efficient cross functional team communication to enable the rapid responses to internal and external changes. However small businesses face problem like evolving the necessary organizational changes during and after ERP implementation. These challenges need to be overcome in order to carry forward a successful ERP implementation with specific knowledge and resource constraints. Few points to avoid the problems and use the new system efficiently are:
You must keep in mind that ERP solution is not just a software purchase but it is rather a long term investment which has impact on all the business processes throughout the organization so you need to invest wisely to reap the benefits in the long run.