No more info silos and smooth operations: Why your business needs an ERP system
By John W. Allen, CPA
To keep up with the ever-evolving realm of modern business, operational efficiency and seamless collaboration are paramount. Companies are grappling with material losses and fragmented software systems across departments.
In one case, a manufacturing company couldn’t determine where they lost material during production.
Another company found that different departments had implemented different software and processes as it grew. HR was in its own silo, there were ongoing glitches with the sales management system, and it was getting more challenging to manage supply and inventory.
The answer for both companies – and an ever-growing number of businesses in a wide array of industries – is a comprehensive software package known as Enterprise Resource Planning or ERP.
At its heart, ERP ties together the various parts of a company and manages the information in an easy-to-access package that does away with duplication. Better data management equals better decision-making – and cost-effectiveness.
As CEOWORLD magazine put it in a recent article, “ERP systems provide businesses with a single source of truth for their data and give them the tools they need to make informed decisions about their operations.’’
However, embracing a new ERP system is an investment of both money and time. Successful implementation takes buy-in from all corners of a business to ensure the benefits of integration happen. Additionally, research on the front end is crucial to determine the right software package for your company.
What is ERP?
An ERP system allows companies to track all areas of their business, from the financial and human resources side to supply chain management and production.
While finances are certainly part of ERP, they are only one part of the entire package. A fully integrated ERP system gives executives the ability to track all operations in one place and have real-time information at their fingertips to make decisions.
In some companies, ERP systems replace HR and sales management software, as well as production schedules and inventory. For manufacturers, ERP gives a better handle on the true cost of production and flags areas of waste.
Instead of pouring through numerous spreadsheets to track inputs and outputs, an ERP system provides a central data collection area to help previously disconnected departments collaborate for increased efficiency.
Many companies today are looking at cloud-based ERP systems, which eliminate on-site servers and can make sharing information easier over a distributed workforce.
In a Wall Street Journal article last April, Kristin Reinke, vice president and head of finance at Google, talked about the important role ERP plays in automating systems, freeing up employees to concentrate on deeper tasks.
“By pulling in data from our ERP and other supply-chain system data, we can take those thousands of invoices and validate against them and systemically approve [them],’’ Reinke said in the article. “Where we have outliers, we can actually route those back to the business. And so it’s a less manual process for the business and for finance.”
Companies looking at implementing an ERP system need to examine current operations and processes closely. Decide up-front what you need and have a plan for how ERP implementation will occur.
As you work through your company’s needs, start looking at the ERP systems offered by various vendors. At Boyer & Ritter, our OTS* team combines professionals with multidisciplinary experience including finance, IT, and business intelligence to help management figure out the system that suits their current needs and positions them for growth.
The right ERP system can track all your business's core functions in finance, HR, manufacturing, supply chain, services, procurement, and more. Having real-time information across all areas of your operation gives your management team the insights they need to make better decisions and streamline processes.
If your company has an older ERP system or is looking to embrace this technology for the first time, the team at Boyer & Ritter can help walk you through the process and assist you in getting the right system for your needs.
*The Boyer & Ritter Operations and Technology Solutions (OTS) team helps business leaders to squeeze the most out of their existing systems or replace inefficient systems, use human capital more effectively, allow data to drive success, and streamline operational decision-making.
John W. Allen, CPA is a Director and Vice Chair of the Manufacturing Practice Group at Boyer & Ritter LLC, where he provides audit, accounting, and tax services. John also serves as Treasurer for MANTEC.