Why Your ERP Is Not Enough

NetSuite: No. 1 ERP Tool


When companies continue to grow and scale, tools are needed to streamline and make business processes earlier. ERPs are a popular solution for enterprises, but although they are popular, they have a reputation of being expensive, hard to understand, overwhelming to learn, and boasting long implementation timelines.

Even so, they bring many benefits to organizations as they are able to collect, centralize and display a dashboard of the collectivized data within an organization. But are they enough? Not necessarily. Before we explore the reasons why ERPs may not be enough for your business, it’s important to understand how they work.

How do ERPs Work?

ERPs use a centralized database to store data from all departments. What this means is that for example, the data from customers such as recent purchases and contact information can be used by both accounting and purchasing managers, to business development representatives.

Besides allowing data to be accessed from one platform, ERPs also automates the process for reporting to a certain extent. This means having a streamlined system to input info rather than maintaining separate spreadsheets and databases that may have to be cross examined and merged across departments. Because of this centralization, ERPs are able to give an overview of the performance of the company and how it is functioning. They are also able to give key insights such as key performance indicators (KPIs) on each department in order to make smarter business decisions and processes. However, despite these functionalities, there a few limitations to their use as well.

Here are four reasons why ERPs are not enough

1. ERPs focuses on collecting data

One of the key features of having an ERP is the ability to collect data from multiple functions that are made accessible within one platform. However, ERPs only have the capability to allow data to be collected, which often needs to be manually inputted or uploaded through a spreadsheet without an integration with other software. This allows room for potential human error and data inconsistencies.

Les Wright, a BDO BI Senior Manager mentions that if other operational data is not manually keyed and entered into an ERP system, the ERP may not know it exists. This is potentially a limitation if organizations use more than one CRM system.

2. ERPs focuses on detailed customer insights and transactions

From a customer relationship management (CRM) prospective, ERPs allow detailed insights into specific transactions and client profiles, but they lack the ability to give a holistic overview for long-term planning capabilities.

3. ERPs lacks real time reporting

With many companies looking to quickly scale and grow, real-time data is much more important and imperative to understanding the current state of the company. However, many ERPs do not have the best real-time reporting function, and generally only allows an overview or an aggregated collection of data to access.

In addition to this limitation, ERPs generally do not have the best reporting functionalities that may be needed, specifically for data sensitive functions such as finance. Although ERPs do offer the ability to export data into reports and spreadsheets, finance professionals still need to spend hours cleaning up the data in a way that is better organized. According to Les Wright, 80% of a financial professional’s time is spent compiling this type of data.

4. Lack of Mobility

Although centralized and offering a variety of features and functions, most ERPs still lack the mobile capabilities that now many organizations need. With working from home options becoming more and more popular and with team members on the move, it is hard to access required information in your current ERP system without being present at the desk.

What Should You Do?

Based on your company size and your specific needs, it is worthwhile looking into complementary solutions that will simplify your processes and make the most out of your current ERP software. But before all of that, it is important to evaluate your current business needs and industry requirements, which includes “functional and operational must-haves and an equally short list of key strategic requirements that will support your future growth”, as suggested by Evert Bos, a solution architect at Sikich, in an interview with CIO. Once you establish these key requirements, you can then start to evaluate alternative solutions that will bridge the gaps that your ERP may not be able to offer.

In Conclusion

This being said, ERPs are a great all in all software solution to collect and compile data across different functions, and to streamline business processes in a growing organization.

However, it may not be enough for functions that need a tailored solution to solve a specific problem.

For example, perhaps a business intelligence system would be more suitable for delivering detailed reports and merging data. A SaaS-based software solution such as Procurify would better streamline and automate the process for more niche functions such as procurement and purchasing. It allows a centralized cloud-based spend management platform to be accessed by employees on both mobile and on their desktops. Many other software products in the market do also integrate with major ERP systems such as Procurify, so that data can be cross referenced and accessed from both places.

Category: B2B News

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