Technology plays an increasingly important role in various sectors of society, especially in the job market. After all, companies encounter software and hardware on a daily basis that promise to revolutionize how their employees and managers perform their functions, such as ERP systems.
For many, this is one of those technologies that has completely changed the way businesses operate, whether they are large or small. Its tools are not only capable of providing greater well-being for employees but also of automating processes, protecting sensitive information, and even reducing spending on other programs.
However, many people do not know how to adopt them, no matter how common they may be. Additionally, it is necessary to know which ones fit best with your business, which will ensure even more efficiency in the daily lives of workers. With this in mind, we have outlined its main stages and how to choose the best one for your company.
What is ERP?
The acronym ERP stands for “Enterprise Resource Planning,” which essentially means the management of all of a company’s processes, such as HR, finance, accounting, and services. In other words, it’s a way to integrate all of this information into a single system, but in an organized and efficient manner, with the aim of improving decision-making processes.
In this regard, with advancements in communication methods, the technologies responsible for this integration have also undergone considerable changes in recent years. According to experts, ERPs from a few years ago, despite functioning differently, are completely different from the newer ones.
Those with older architectures, for example, may be less intuitive and require more effort and training to use. On the other hand, the more recent ones bring a series of improvements, such as the ability to connect them via web services and run them on separate servers.
Furthermore, they can now be accessed from any device, without the need to go to the company’s headquarters. This has significantly contributed to the increase in employees working from home, allowing them to access ERPs through their smartphones or personal computers.
Moreover, other important processes, such as information analysis and integration, often differ significantly, allowing for more agility and productivity in the daily routines of teams.
When to choose a new or old ERP?
Well, this is a rather challenging choice as it will depend on various factors. Your business’s needs, available budget, and even the training of your team can influence the decision. In the end, what matters most is to consider the cost-effectiveness of its implementation, as well as its efficiency in the day-to-day operations of the company.
Getting to know its main types and characteristics can also make this implementation easier, as different environments and scenarios do not respond in the same way to ERPs.
What are the main types of ERP in the market?
It’s possible to find a plethora of ERP systems in the market, which can be quite overwhelming for some managers. This is because their specificities can cater to various businesses and professionals. In this regard, some of the most commonly used ones include:
Vertical ERP
In general, vertical ERPs are used in more specific businesses because their practices end up adapting to the needs of these companies. In other words, they are developed and implemented according to the functionalities of a particular sector or industry, such as education, manufacturing, or healthcare.
For instance, a healthcare ERP system might include tools for drug registration, appointment scheduling, or managing health plans. For this reason, their costs can vary significantly since their robustness depends on the features required by the business.
To achieve this, they undergo constant testing, where the successes and failures of the functionalities contribute to the creation of fluid and effective systems.
Legacy ERP
Also known as Desktop ERP, these are the most common ones found in businesses worldwide, often mistaken for finance software. However, they are quite different.
To begin with, they were developed at a time when most people did not have access to the internet. For this reason, they are mostly outdated in terms of new market practices, especially when it comes to the technology sector.
The adoption of intelligent systems, for example, has revolutionized how people view productivity, but they are seen as inefficient when they stop receiving maintenance and new features.
Furthermore, unlike vertical ERPs, they have very little customization capacity, making their adaptation quite difficult. In some cases, they may not provide a good user experience, as their usability and interface are not user-friendly.
In the end, there are so many limitations that companies replace them every day with newer and more comprehensive models, which not only makes them easier to use but also facilitates long-term maintenance.
Cloud ERP
For many experts, a cloud-based ERP is what most businesses will need in their day-to-day operations. Essentially, unlike legacy systems, it is operated and accessed via the internet, without the need to host servers locally at the company’s premises. Contrary to what many may think, they are often much cheaper than traditional systems, sometimes with monthly fees below R$ 100.00.
For this reason, smaller organizations widely use them, especially when they are starting their operations. In this way, these systems meet most of their needs without having to worry about space, usability, or cost.
Among their main benefits, cloud-based ERPs also allow users to access them from anywhere and at any time, whether using their computers or smartphones. All that’s needed is an internet connection, which even supports remote or hybrid work setups.
Furthermore, another interesting point is that service providers for these systems typically handle maintenance and software updates. Therefore, companies do not need to worry about these issues and can direct their efforts to other areas of the organization. Nevertheless, it’s worth noting that they are divided into two types:
Rigid Cloud ERP
The rigid ERP, often referred to as “out-of-the-box” ERP, is the most common choice for small businesses because they are more affordable and user-friendly. However, they tend to be more generalist in nature, so they may not address certain specific needs. Therefore, they may not be the best option for companies experiencing constant growth.
Specialized Cloud ERP
As the name suggests, these systems are specialized in specific industries or sectors, so they can better cater to their demands. Due to this specialization, they also tend to be more expensive but are often worth it in the long run.
How to Choose the Best System for Your Company?
Choosing the ideal ERP system, although challenging, is crucial for a company’s productivity. Therefore, it’s important to have a qualified team and managers, as this will ensure a successful implementation and use of its tools. Nevertheless, before anything else, it’s essential to assess the organization’s needs.
To do so, you should consider not only the budget but also the organizational culture and the business’s structure. This way, you can align short-term and long-term goals with the available resources. Once you have this information, you can start researching reliable providers, preferably with a solid customer base and solutions.
In this regard, Salesforce can assist in analyzing the relationship with key customers, often providing individualized and shared views of each of them.
Furthermore, it’s crucial that providers offer some advantages, with the ability to perform maintenance and keep the software up to date being fundamental. Some of them may offer trial periods, so it’s always worth taking advantage of demonstrations to see how well your team adapts to the service.
Lastly, the user experience is another factor that can weigh heavily in the decision. Investing in a system with a fluid and intuitive interface not only enhances well-being but also significantly increases employee productivity.
What are the main benefits of ERP?
The benefits of adopting an integrated enterprise management system are countless, and they directly impact the quality of service provided. They include:
More Detailed Reports: Company reports are essential for tracking day-to-day results. In this regard, ERPs contribute to the creation of more refined sector analyses without the need for manual work in spreadsheets. This advantage is even more prominent in financial planning, especially for cash flow and income.
Process Integration: For many, the greatest benefit of having an ERP in businesses is their ability to integrate and centralize business operations. This way, it’s possible to monitor and evaluate all processes, such as HR, finance, marketing, etc. It’s something that can significantly reduce costs associated with separate systems and databases.
More Flexibility for Employees: With the advent of cloud-based ERPs in the market, processes have become much more flexible. This is because people are no longer tied to servers, machines, or the company’s headquarters, as they can access these systems from any device and location. This not only improves the quality of life but also allows decisions to be made more swiftly.
Data Security: Another important factor is that a good ERP can enhance data security for the company. This is because managers can control the level of permission for their files and documents. Furthermore, a certain level of robustness is established in the protection of this information since security systems don’t have to deal with decentralized steps.
Increased Productivity: A unified system prevents the allocation of too many resources to repetitive and branching tasks. Through this business automation, employees can focus on their activities, significantly increasing productivity.
What is the relationship between ERP and data security?
Information security is a topic taken very seriously nowadays, and efforts to prevent human and technological failures are increasing. When it comes to ERP systems, these data need to be kept on reliable hardware or software, always updated, and far from obsolescence.
Because of this, the latest and most comprehensive systems on the market present a series of key factors for information security, such as access control. Through it, only authorized users can access the software’s data, often requiring two-factor authentication or even biometrics.
Data encryption is necessary to encode files, messages, and any other information that passes through the ERP’s servers. This way, they become unreadable to any user or external individual who doesn’t have the key to decrypt them, which is excellent for preventing information leaks.
Furthermore, the ability to perform backups at intervals defined by the company itself makes data recovery simpler. In other words, as they are stored in secure locations, even in case of failures or attacks, they can be easily restored.
In the end, it’s common for questions to arise regarding ERP systems and data protection, but the truth is that they can be great allies in this task. To do so, all it takes is to invest in modern software with constant updates to keep your business information secure and confidential.
Which businesses can adopt ERPs?
Contrary to what many may think, essentially any business can adopt an integrated enterprise management system. In other words, it’s not only large companies that can implement them, but any organization that wants to streamline its processes and enhance employee well-being.
Retail businesses, such as stores, can use them to track inventory and record sales. Educational institutions can use them to manage courses, student enrollments, and grade submissions.
Who is responsible for this process?
With so many types of ERP systems available, many managers have questions about who should be responsible for implementing the ERP. In general, they are typically implemented in more specific areas, such as IT. In these cases, it’s important to consider several key points, including the needs of IT professionals.
The team responsible for configuring the system should have a solid understanding and experience, taking care to ensure usability and maintenance. Additionally, seeking out specialized consultants can greatly expedite the process, especially when they collaborate with the internal team.
By doing so, the company gains access to the best ERP providers, which ultimately ensures a more secure implementation.
How to implement these systems?
First and foremost, it’s important to keep in mind that this is a rather labor-intensive process, even for simpler systems. This is because it involves several stages, with the following being the most prominent ones:
Planning
The first and perhaps the most important stage of implementing a project is its planning. In this regard, the manager and their team should conduct a comprehensive analysis of the current scenario in which they operate, as well as research which software solutions align with the business.
They should define which areas or departments will implement the system, which will create a list of priorities during the process. According to experts, this works as a mapping process where professionals should also identify the main bottlenecks and strengths of this integration.
In some cases, it may be necessary to assess whether the organization’s infrastructure is sufficient, taking into account physical space for a server and whether employees’ equipment needs improvement. Ultimately, it’s important to approach all this planning realistically.
In other words, the timeline should be as close as possible to the company’s conditions, with clear tasks and well-defined objectives.
Adapting the ERP
Despite many of these systems being sold as complete solutions, many managers forget that they may not always meet all the demands.
In fact, an excess of features can be counterproductive in some cases. It’s not uncommon for companies to waste excessive resources on training for disposable tools or ones that have become obsolete. Therefore, during the implementation of an ERP, making adjustments and configurations becomes crucial.
This way, you can meet the requirements established during the planning phase. It involves various important processes such as employee workflow, system access permissions, and system integration.
For this reason, it’s always recommended to invest in systems that are customizable, offering the right tools to meet your company’s needs. Furthermore, it’s important to keep in mind that customizations should be done with an eye toward the future to avoid compatibility issues during system updates.
Testing
This is one of the stages that tends to be more labor-intensive and can take a significant amount of time in larger companies. During this phase, the main problems are identified before the full implementation of such systems, so it should be done with great care and by qualified professionals.
After customizing the software, it’s time to see how it functions in the daily operations of the company, which goes beyond just identifying bugs. Aspects such as employee adaptation, usability, and productivity levels can serve as excellent indicators of results, often more so than some errors.
To do this, thorough planning is required, where a scope is defined for their application. In general, companies tend to invest mainly in two types of testing: unit testing and integration testing. The first aims to verify each feature of the ERP system in isolation and individually.
This allows for the identification of problems and ensures that each process works as expected. The second type of testing aims to assess how these different processes communicate with each other, whether performed simultaneously or not.
Finally, evaluating performance and user acceptance reports remains, where you can gradually roll out the system to employees. This way, you can identify common issues such as usability and security and address them with less effort.
Training
No matter how simple the system may be, it will require a certain level of training for its use. Therefore, during the initial stages of this adaptation, one must also consider the ability to deal with challenges. With this in mind, the company should provide ongoing support for system usage, especially after updates.
This is a way to maintain the quality of service consistently high without compromising the overall well-being of your team. Moreover, it’s important to pay attention to performance and satisfaction reports, which are essential for understanding how the system integration is progressing.
Monitoring
Finally, after implementing the tests and everything going well, it’s essential to take some precautions. This is because it’s necessary to ensure that the entire system continues to function optimally, so monitoring becomes an inseparable part of the process. This includes analyzing reports, releasing updates, and providing support to users.
Therefore, many organizations often have specialized teams for this internal or external technical support, whether through emails or phones. However, as allocating resources directly to this stage may not be feasible for many companies, it’s worthwhile to invest in building online knowledge resources, such as pre-prepared FAQs.
In other words, it’s a continuous process, so it will require investments and efforts from the company, but it pays off significantly in the long run.
Are there disadvantages to adopting an ERP system?
Despite many benefits, integrated management systems can have some points to consider. For many, these points can even be considered disadvantages depending on the size and resources available to the company.
In reality, it’s up to managers to assess the cost-benefit of this decision, weighing the advantages and disadvantages of implementation. With this in mind, here are some potential drawbacks and challenges that one may encounter during this process:
Risk of Business Disruption
While rare, this is a real risk that should always be considered during the implementation of an ERP system. In a telemarketing company, for example, it’s possible that some services may become inactive, which is common during data migration and configuration of a new system for users.
In fact, most companies choose to install them during the overnight hours for this reason, but it’s something that should always be addressed during the planning phase. Additionally, if any issues occur during this process, downtime may be longer than expected, resulting in a loss of business.
When switching between systems, such as from a legacy system to a cloud-based one, errors are quite common. In these cases, inconsistencies may occur in these transitions, such as corrupted data and the loss of some documents.
High Initial Cost
Of course, there are very affordable options on the market, especially when it comes to small businesses. However, those with more limited resources may face a high initial cost since they must consider not only the purchase price but also the customization and configuration of the system.
When the business is highly specific, it’s practically impossible not to adapt the ERP to its needs, which generates these additional costs. Moreover, it’s a process that often requires staff training and hiring specialized professionals, where effective IT management proves to be crucial.
Another point to consider is that maintenance can also be costly, even when the service provider offers it for free. This is because, as mentioned earlier, its implementation can disrupt the business in some cases, something that smaller companies cannot afford to deal with.
Implementation Time
The implementation time is another well-known disadvantage in implementing an ERP. After all, when we consider all the stages of this installation, from planning to testing, it can require a significant amount of time. However, it’s important to understand that this varies depending on the available structure in the company and the complexity of the adopted software.
Dependence on the Service Provider
In general, this is not such a negative point. However, it can become the worst on the list when the contracted service is not good. This is because, whether you like it or not, the company ends up relying on the support provided by the service provider, whether for maintenance or training of your team.
However, when it is not effective and responsive, the headaches can be significant. Immediate correction of any signs of error or an outdated system may not be possible, affecting not only productivity but also the security of employees. This is even worse when the servers are unstable.
Even if there is an attempt to switch systems, this dependence can pose a major obstacle. This is because these ERP providers may use different tools and technologies, which can require even more planning and employee training.
Furthermore, it can affect data migration, potentially leading to the loss of some files during the transfer. Therefore, hiring specialists becomes indispensable, further increasing the cost of this process.
An ERP system appears as an excellent solution to integrate all or some processes of a business. In its different types, companies can choose the one that best suits their needs and start enjoying some of its various benefits, such as faster decision-making, optimization of the work environment, and enhanced data security.
However, managers must keep in mind that each organization has its specific requirements, which may require some customization of these systems, even though this is a readily available feature in quality software.
On the other hand, it’s equally important to understand that there can be some disadvantages, especially when it comes to the implementation process. Among these, the ones that weigh most heavily are the high initial cost for smaller companies and the implementation time, even though these can be mitigated with the use of less complex services.
In the end, what matters most is finding specialized professionals and suppliers that provide quality in this integration, ensuring that each step is carried out correctly.
Do you want security to implement an ERP?
Each company has unique processes and workflows. In this reality, having a customized ERP allows the company to adapt the system according to its specific needs.
A customized ERP is a model developed especially to seamlessly integrate with these systems.
In other words, this ensures smooth data exchange, avoiding the need for the implementation or replacement of existing systems.
The direct result is a more optimized performance, capable of supporting the company’s specific operations.
This customization offers several advantages, such as the automation of specific company processes, leading to a reduction in manual tasks.
This results in increased operational efficiency and productivity since the system adapts to meet the specific needs of the company.
To assist you with ERP customization, you can rely on the solutions from Monitora, a Marlabs company!
We take care of the entire technology development process to help our clients stay focused on their business strategies.
With specialized employees, well-defined business rules, and innovative technologies, we develop creative solutions for your company to stand out in the market.
For more information about our services, you can speak with a specialist right now by clicking here.
Did you enjoy this content? Find more super interesting articles on our blog! Feel free to explore.
