Types of ERP Systems & ERP Software

Deployment Options
Enterprise Resource Planning software is considered a type of “enterprise
application”, which refers to software designed to satisfy the software needs of an
organization and improve business performance. There are many different ERP
systems available today that range greatly depending on the size, function, and
needs of an organization. Types of ERP systems generally refer to deployment
options and include cloud ERP, on-premise ERP and hybrid ERP (some systems in
the cloud and some on-premise).

Each ERP solution system is often tailored to support different aspects of a

business, meet an organization’s business requirements and have different methods
of deployment.

Big Business ERP vs. Small Business ERP

In the past, “big business ERP” addressed large organizations that often deployed
onsite/on-premise ERP solutions and had an abundance of resources to dedicate to
IT and other support to analyze, customize, upgrade and deploy their software
solutions. 

The phrase “Small Business ERP” or “SME (small and medium-sized enterprise)
ERP” commonly referred to ERP software systems with business management
applications typically created to meet the specific needs for a small to mid-sized
business. 

Today, these phrases are used less frequently as the important factor is not
company size but determining if the ERP system is effectively addressing current
and future business requirements, no matter the size of the organization.It’s
imperative that organizations consider and select ERP systems that eliminate the
need for costly customizations, adapt to the rapid pace of business change, address
future technologies and meet other identified requirements.

Types of ERP Systems: Cloud vs On-Premise vs Hybrid

There are three main types of ERP systems that function with different deployment
model options. The most common types of ERP systems include cloud ERP, on-
premise ERP, and hybrid ERP. 

 On-Premise ERP software is implemented onsite and maintained in

physical office space within an organization, hosted on the company’s own
computers and servers for full control, support and ownership of the entire
system once implemented.
  Cloud-based ERP software is a web-based solution, known as Software as
a Service (SaaS), where an organization accesses and stores data on any
device with an internet connection, usually through the purchase of a
subscription. Continual support, updates, training, and flexible
customizations supported by the software provider.
 “Hybrid” ERP software refers to a combined implementation of cloud-
based and on-premise ERP system solutions. The combination of hosting
and deployment services vary by provider. These models can provide ERP
users the flexibility to migrate between delivery models, or integrate
benefits not available existing implementation. 

Different ERP vendors support different deployment model options. Combinations

of options, often referred to as “hybrid” deployment may offer a combination of
hosting and deployment services. These models can provide ERP users flexibility
migrate between delivery models, or integrate benefits not available existing
implementation.  

What Industries Can ERP Be Used For?

ERP software can be used in any industry to help a business become more
efficient. It provides an effective communication tool that can manage information
between internal and external departments, assist with daily activities to manage
projects, track adherence to guidelines, and handle day-to-day intricacies that come
with running a business.  

Due to ERP roots in manufacturing, there are robust Industry-specific ERPsystems

that cater to the various manufacturing industries. ERP software systems are very
diverse and are key parts of many industries, including but not limited to:

 Manufacturing
 Industrial Machinery and Components
 Construction and Home Improvement
 Electronics and Technology
 Automotive
 Aerospace and Defense
 Healthcare, Pharmaceutical and Life Sciences
 Agribusiness, Farming and Agriculture
 Food and Beverage
 Healthcare and Hospitality
 Clothing, Consumer Goods and Retail

Over time, ERP systems have grown to include support for other applications and
“ERP modules" that support day-to-day business function. In many ERP systems,
these common functional areas are grouped into ERP modules, including but not
limited to:
  Financial Accounting
 Management Accounting
 Human Resources
 Manufacturing
 Order Processing
 Supply Chain Management
 Project Management
 Customer Relationship Management (CRM)
 Data Services

What is ERP and How Do ERP Systems

Work?
ERP Definition: What Does it Actually Mean?
ERP is an acronym that stands for “Enterprise Resource Management”, the
consolidated process of gathering and organizing business data through an
integrated software suite. ERP software contains applications which automates
business functions like production, sales quoting, accounting, and more.

In layman’s terms, ERP facilitates your company operations across every

department. ERP solutions improve how you handle business resources, whether
it’s raw materials for manufacturing or staffing hours for human resources.

Looking for an ERP system for your organization? Check out our list of
the best ERP software. Or get free help from one of our software advisors.

There are many more ERP definitions, which vary on whether they’re intended for
developers, vendors, or technology media. Most agree ERP is intended to serve all
departments of a company with better business processes.
Connect your business with ERP software.
The History of ERP Practices
Businesses have always tried to use enterprise resource management, even if it
didn’t have that name. Companies have always struggled to balance all their
different practices with sacrificing resources elsewhere. For a long time this meant
companies had to hire additional staff to manage each department. International
companies had to rely on outsourced labor abroad with no way of checking in.

The first traces of ERP were found in manufacturing, with the economic order
quantity (EOQ) model, a paper-based scheduling system. This was replaced by
material resource planning (MRP) tools developed in the late 1960s which
eventually became manufacturing resource planning (MRP II) tools. Modern ERP
practices began in the 1990s due to the rise of computer software being integrated
with daily business operations. Coined by the Gartner Group, the term originally
focused solely on the new digital tools allowing manufacturers to manage their
supply chain relations, control inventory, automate accounting, and much more.

Today, ERP is found across a variety of industries, not just manufacturing. And
since the early aughts, ERP software is now available from Cloud-hosted
platforms.

Types of ERP by Industry

There are several different types of ERP designed for several industries in order to
address their specific needs:

 Apparel ERP: The clothing industry has to handle a lot of changeover when
fashion trends and seasons change.
 Automotive ERP: Auto manufacturers can rely on ERP tools to handle
inventory management, quality control, and scheduling.
  Cannabis ERP: This ERP is an all-in-one solution for the cultivation,
manufacturing, processing, and distribution of legal cannabis.
 Construction ERP: Construction contractors need to stay in control of labor,
materials, equipment, and any subcontractors they’ve hired for a job. ERP
software helps with construction task management.
 Higher Education ERP: College and university ERP systems support
academic business processes ranging from tuition billing to exam grading.
 Manufacturing ERP or MRP: Going back to the origins of ERP, MRP
provides production planning, personnel and machine workloads scheduling,
and general inventory control along the supply chain.

Why is it so important to use an industry-specific ERP solution? A general ERP

system will weigh you down with unnecessary features. For example,
manufacturers need applications for sourcing raw materials while the higher
education sector mostly needs scheduling tools for student, teacher, and staff.
While a manufacturing plant still needs ERP with scheduling applications, a school
doesn’t need ERP to manage raw materials.

If your business downloads a general ERP full of features you don’t need, all
you’re doing is slowing down your own resources. Instead of overloading your
computers with a bloated software package, save computing space by only
installing the ERP you need.

Types of ERP by Implementation

There are also different operational types of ERP software:

 On-premise ERP: This is any ERP software which is deployed directly on

your in-site devices. These systems are designed for businesses of all sizes
though may be more appropriate for small and medium companies.
 Open Source ERP:Like any open source software, this solution lets you
inspect, modify, and enhance your ERP source code. Using an open source
ERP lets you customize your application to better suit your workplace.
 Cloud-based ERP: Any ERP Software-as-a-Service (SaaS) which is
available over a Cloud-hosting service rather than on-premise deployment.
This option lets you access real-time data as long as you have Internet
access and is suitable for large enterprises.
 Hybrid ERP: Enterprise resource planning systems which blend on-premise
and Cloud-based deployment.

Cloud-based ERP software is ideal for companies with multiple locations which
need to stay in coordination with one another. Wondering which is right for your
business? Contact Software Connect for ERP software recommendations specific
to your business!
Cloud-based ERP provides greater risk management and data security.
Benefits of ERP
Enterprise resource management provides better business performance with these
great benefits:

Workflow Visibility and Streamlining

Before ERP systems, coordinating between multiple worksites took a lot of time
and effort. If you wanted updates on a specific part of your business, you had to
call or visit the site physically. Large corporations with national and international
locations alike had to work around time zones. And if there was an issue with one
of your production partners abroad, it could set back your entire business while
you made endless phone calls and site visits.

Fortunately, ERP systems revolutionized workflow visibility. Now, even when

you’re in your office headquarters, you can open a common database from your
ERP suite to get real-time details about what’s simultaneously happening at your
manufacturing plants abroad and distribution centers right at home.

Business Intelligence and Data Analytics

In order to run your business, your decision-making needs to be guided by accurate
data. ERP solutions use business intelligence (BI) tools to provide data collection,
analytics, and reporting methods. There are even ways to analyze data in real-time
to make instant changes to your production processes. You can additionally use
historical data for business forecasting.

Or put your data into customized reports. Present these reports to important
shareholders, business partners, or your team to keep everyone informed of key
performance indicator (KPI) metrics.

Scheduling Solutions
Scheduling tools are a highly customizable part of ERP solutions. You can
organize when workers come in for shifts, when inventory is delivered, and when
your factories undergo maintenance. Then coordinate each schedule into a single
calendar so all your departments and supply chain partners stay on the same page.

Cross-Department Collaboration
The more departments your company has, the more important it is to manage
internal communication practices to avoid mistakes. And if your company has
locations all over the world, you need a way for everyone to stay in contact across
time zones and language barriers. A miscommunication between your raw material
supplier and distribution center can lead to costly inventory errors. ERP
communication tools organize scanned documents, files, emails, texts, and phone
call recordings. There are even private, internal channels for instant
communication.

You can also use customer relationship management (CRM) tools to schedule

external customer interactions, like quote follow-ups and lead tracking.

Risk Management and Data Security

Protecting your company from fraudulent practices is more important than ever in
the digital age. If your business operates online in any way, you can be at risk.
Real-time risk management tools give your company additional security by
performing automated audits and fraud monitoring.

Your company handles a lot of sensitive data. Using a single ERP system provides
security by keeping all your important documentation and communication in one
place. You can also cut down on data duplication by keeping all your information
within one cohesive system.

Customizable Solutions
Every company has to factor in some unique variables in their operations. Does
your business work with international companies? Do you regularly have to submit
official documents to government entities? Does your marketing department target
audiences across social media channels? Good news: there are ERP softwares with
custom modules to fit your exact business needs!

New technology is changing the capabilities of ERP applications. The latest trends
include artificial intelligence computing and the Internet of Things (IoT) solutions.

Popular ERP Software Brands

Here is a sample of the most popular systems in our network. For a more
exhaustive list, check out our list of ERP software.

What Is Enterprise Resource Planning

(ERP)?
By Olivia LaBarre

Enterprise resource planning (ERP) is a process used by companies to manage and

integrate the important parts of their businesses. Many ERP software applications
are important to companies because they help them implement resource planning
by integrating all of the processes needed to run their companies with a single
system. An ERP software system can also integrate planning, purchasing
inventory, sales, marketing, finance, human resources, and more.

Key Takeaways
 ERP software can integrate all of the processes needed to run a company.
 ERP solutions have evolved over the years, and many are now typically
web-based applications that users can access remotely.
 An ERP system can be ineffective if a company doesn't implement it
carefully.
Enterprise Resource Planning (ERP)

Understanding Enterprise Resource Planning 

You can think of an enterprise resource planning system as the glue that binds
together the different computer systems for a large organization. Without an ERP
application, each department would have its system optimized for its specific tasks.
With ERP software, each department still has its system, but all of the systems can
be accessed through one application with one interface.

ERP applications also allow the different departments to communicate and share
information more easily with the rest of the company. It collects information about
the activity and state of different divisions, making this information available to
other parts, where it can be used productively.

ERP applications can help a corporation become more self-aware by linking

information about the production, finance, distribution, and human resources
together. Because it connects different technologies used by each part of a
business, an ERP application can eliminate costly duplicate and incompatible
technology. The process often integrates accounts payable, stock control systems,
order-monitoring systems, and customer databases into one system.

ERP offerings have evolved over the years from traditional software models that
make use of physical client servers to cloud-based software that offers remote,
web-based access.

A company could experience cost overruns if its ERP system is not implemented
carefully.

Special Considerations 
An ERP system doesn't always eliminate inefficiencies within the business. The
company needs to rethink the way it's organized, or else it will end up with
incompatible technology.

ERP systems usually fail to achieve the objectives that influenced their installation
because of a company's reluctance to abandon old working processes that are
incompatible with the software. Some companies are also reluctant to let go of old
software that worked well in the past. The key is to prevent ERP projects from
being split into many smaller projects, which can result in cost overruns.

ERP Solutions Providers 

Some familiar names are leaders in ERP software. Oracle Corp. (ORCL) originally
supplied a relational database that integrated with ERP software developed by SAP
(SAP) before entering the broader enterprise market in a big way in the early
2000s. Microsoft (MSFT) has long been an industry leader, with many customers
using multiple software applications from the company.

As cloud-based solutions have grown in popularity in recent years, the traditional

ERP industry leaders have seen challenges from upstarts such as Bizowie and
WorkWise. (For related reading, see "Case Studies of Successful Enterprise
Resource Planning")

Case Studies of Successful Enterprise

Resource Planning
By Julie Young
Updated Jun 14, 2020

Enterprise Resource Planning (ERP) solutions are vital for all kinds of companies,

especially those that are growing or very large.

Companies look to software providers for help in managing all kinds of enterprise
resources. Some of the biggest needs fall in the categories of accounting, financial
analysis, human resource management, client relations, manufacturing, supply
chain, and inventory management. Some of the largest solution providers
include Oracle, IBM, SAP, Salesforce, and Microsoft.

Below are a few ERP success stories to help understand some companies’ biggest
challenges and goals in this area.

Key Takeaways
 Choosing the Oracle ERP Cloud solution helped Western Digital merge
three businesses.
 In 2018, Walmart announced a five-year agreement with Microsoft for
Microsoft Azure, which creates a framework for multiple ERP systems.
 The TD Bank Group of companies also contracted with Microsoft Azure for
a cloud framework that can integrate multiple capabilities and create more
digital innovation opportunities.

Western Digital 
Western Digital is a technology company with offerings in the areas of data, data
storage, data systems, and data solutions. A merger of Western Digital, SanDisk,
and HGST was a big challenge for the company around 2019. With the merger,
Western Digital wanted to centralize ERP so that all three companies could better
work together.

After final deliberations among two providers, the company went with
the Oracle ERP Cloud. This choice also followed with an Oracle Suite of products
that included solutions for performance management and analytics, all integrated
together.

The major benefits of the Oracle choice included integrations from the three
businesses across the following:

 Cost center management

 Information technology
 Human resource management
 Payroll processing
 Streamlined systems for forecasting business analytics and forecasts
 Workforce planning
 Comprehensive dashboards and automated reporting
 Improved customer relationship analysis
 Systems all running efficiently in the cloud for easier accessibility and
document management

Walmart 
Walmart is one of the top ten largest companies in the United States by market
capitalization. Sales for the company are around $500 billion annually, which
nearly doubles that of its closest retail competitor Amazon.

The company operates globally with brick and mortar supercenters, discount
stores, and neighborhood markets. It owns hundreds of brands, including the well
known Sam’s Club. To successfully keep its shelves stocked it works with
thousands of suppliers. Its e-commerce business is also a behemoth, with a long list
of online seller partnerships. The sheer size of Walmart’s business is one of its
greatest advantages, but also challenges when it comes to ERP.

Walmart works with many ERP providers. In 2018 however, it announced a

strategic partnership for building out a digital transformation through Microsoft
Azure. Expectations for the Microsoft Azure relationship include:

 Plans for building out a cloud-based enterprise system that serves as the
framework for managing all of its resources
 The capability to plug-in existing ERP applications to the Microsoft Azure
framework
 Integration of Microsoft 365
 Broader and more efficient opportunities for e-commerce
  Broader opportunities for automated warehousing capabilities
 Use of artificial intelligence for supplier relationships
 Integration with SAP Hana and other legacy inventory management
solutions
 Integration with blockchain-based solutions that are evolving

TD Bank Group 
A migration to a sound cloud framework was also the driver for a relationship
between TD Bank and Microsoft for the Microsoft Azure ERP. For the TD Bank
Group, some of its biggest challenges are centered around digital storage and the
digital experience for customers.

With Microsoft Azure, the TD Bank Group will also integrate Office 365. Some of
the greatest benefits TD Bank will experience with its Azure relationship include:

 Enhancements in derivative pricing and risk management for TD Securities

 Integrations for its proprietary data and analytics database used in cross-
bank reporting
 Integrations with artificial intelligence developments through its subsidiary
Layer 6
 Greater opportunities for managing TD Bank customer relationships and
digital experiences

The Bottom Line 

ERP systems are usually big-ticket projects with high costs and varying
timeframes. Often, the commitment to an ERP system is one a company hopes to
keep over the long haul. Comprehensively, a company can utilize many different
ERP solutions and providers, which can create a lot of compatibility complexity.

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What is ERP and why do you need it?

What is enterprise resource planning? Yesterday and today.

In the past, businesses had some sort of accounting, finance, or HR process but the
software systems they had often worked separately and didn’t talk or work with
one another. What makes modern ERP software different is that it brings all these
different processes to the table to collaborate and create one fluid system.

Current solutions also allow each department to see what the other is doing. The
result is that accounting and HR can easily collaborate with sales and customer
relationships.

Why ERP is critical for your businesses

While there’s no all-up solution software for every business processes, ERP
technology is getting better and better at bringing all your business processes
together to improve collaboration, help your company make data-driven decisions,
and advance business productivity.

ERP can cover a lot of company functions, but some of the main business
processes include:

Finances

Modern ERP offers dashboards that give you an overview of your finances, so you
can tap into the real-time information anytime and anywhere. It should also help
you cut down on entering information manually by automating daily tasks and
include tracking abilities that help with your business’s regulatory compliance.

Human resources

Modern solutions offer ways to manage company data and streamline employee
management tasks like payroll, hiring, and other duties. You could also track
employee performance and identify HR problems before they happen.

Manufacturing

This function improves business communication, automates daily processes, and

offers manufacturers the ability to fulfil customer needs and manage resources by
accessing real-time data. This solution also optimises project and cost management
as well as production planning.

Supply chain

If your company is still entering information by hand and trying to track down
stock in your warehouse, you can easily save time and money by automating these
processes with ERP. Modern solutions also offer dashboards and business
intelligence to help you get a handle on your stock management.

What is ERP? Key features of top enterprise

resource planning systems
Enterprise resource planning (ERP) software standardizes,
streamlines and integrates business processes across
finance, human resources, procurement, distribution and
other departments. Here's what you need to know about
these key IT systems.
Bart Perkins
Contributing Columnist, CIO29 April 2020 0:00 IST

By 

Thinkstock
ERP definition
Enterprise resource planning (ERP) is a system of integrated software applications that
standardizes, streamlines and integrates business processes across finance, human resources,
procurement, distribution, and other departments. Typically, ERP systems operate on an
integrated software platform using common data definitions operating on a single database.

ERPs were originally designed for manufacturing companies but have since expanded to
service industries, higher education, hospitality, health care, financial services, and
government. Each industry has its own ERP peculiarities. For example, government ERP
uses contract lifecycle management (CLM) rather than traditional purchasing and follows
government accounting rules rather than GAAP. Banks have back-office settlement processes
to reconcile checks, credit cards, debit cards, and other instruments.

The benefits of an ERP system

ERP systems improve enterprise efficiency and effectiveness in a number of ways. By
integrating financial information in a single system, ERP systems unify an organization’s
financial reporting. They also integrate order management, making order taking,
manufacturing, inventory, accounting, and distribution a much simpler and less error-prone
process. Most ERPs also include customer relationship management (CRM) tools to track
customer interactions, thereby providing deeper insights about customer behavior and needs.
They can also standardize and automate manufacturing and supporting processes, and
unifying procurement across an organization’s disparate business units. An ERP system can
also provide a standardized HR platform for time reporting, expense tracking, training, skills
matching, and the like, and greatly enhance an organization's ability to file the necessary
reporting for government regulations, across finance, HR and the supply chain.

Properly operating ERP systems enable enterprises to reduce the time required to complete
virtually every business process. They also promote collaboration through shared data
organized around common data definitions, resulting in better decision-making. The
standardization and simplification that ERP systems offer result in fewer rigid structures,
thereby creating a more agile enterprise that can adapt quickly while increasing the potential
for collaboration. An ERP systems centralized database, while being a bigger target, is easier
to secure than data scattered across hundreds of systems.

4 key features of ERP systems

The scale, scope, and functionality of ERP systems vary widely. However, most ERP
software features the following characteristics:

1. Enterprise-wide integration. Business processes are integrated end to end across

departments and business units. For example, a new order automatically initiates a
credit check, queries product availability, and updates the distribution schedule.
Once the order is shipped, the invoice is sent.
2. Real-time (or near real-time) operations. Since the processes in the example above
occur within a few seconds of order receipt, problems are identified quickly, giving
the seller more time to correct the situation.
 3. A common database. A common database enables data to be defined once for the
enterprise with every department using the same definition. Some ERP systems split
the physical database to improve performance.
4. Consistent look and feel. Early ERP vendors realized that software with a consistent
user interface reduces training costs and appears more professional. When other
software is acquired by an ERP vendor, common look and feel is sometimes
abandoned in favor of speed to market. As new releases enter the market, most ERP
vendors restore the consistent user interface.

Types of ERP solutions

ERP systems are categorized in tiers based on the size and complexity of enterprises served.
Typical tiers include:

 Tier I ERPs support large, global enterprises and handle all internationalization

issues, including currency, language, alphabet, postal code, accounting rules, etc. For
decades, Oracle and SAP have been considered Tier I. Microsoft and Infor are more
recent competitors but are frequently categorized as Tier I as well.
 Tier I Government ERPs support large, mostly federal, government agencies. These
vendors support the nuances of government accounting, HR, and procurement.
Oracle, SAP and CompuServe’s PRISM are considered Tier I with Infor and CGI’s
Momentum close behind.
 Tier II ERPs support large enterprises that may operate in multiple countries but lack
global reach. Tier II customers can be standalone entities or business units of large
global enterprises. Most of these ERPs have some internationalization but lack Tier I
breadth. Depending on how vendors are categorized there are 25 to 45 vendors in
this tier.
 Tier II Government ERPs focus mostly on state and local governments with some
federal installations. Tyler Technologies and UNIT4 fall in this category.
 Tier III ERPs support mid-tier enterprises. Most handle a handful of languages and
currencies but only a single alphabet. Depending on how ERPs are categorized, there
are 75 to 100 Tier III ERP solutions.
 Tier IV ERPs are designed for small enterprises and often focus on accounting.

Over the past few years, ERP vendors have created new systems designed specifically for the
cloud, while longtime ERP vendors have created cloud versions of their software. Cloud ERP
is becoming increasingly popular, and fall into two major types:

 ERP as a service. With these ERPs, all customers operate on the same code base and
have no access to the source code. Users can configure but not customize the code.
 ERP in an IaaS cloud. Enterprises that rely on custom code in their ERP cannot use
ERP as a service. If they wish to operate in the cloud, the only option is to move to an
IaaS provider, which shifts their servers to a different location.

For most enterprises, ERP as a service offers three advantages: The initial cost is lower,
upgrades to new releases are easier, and reluctant executives cannot pressure the organization
to write custom code for their organization.
For more on cloud ERP, see:

 Cloud ERP: The rising alternative to hosting your own

 Moving ERP to the cloud? Expect delays

Top ERP software

Choosing an ERP system is among the most challenging decisions IT leaders face. In
addition to the above tier criteria, there is a wide range of features and capabilities to
consider. With any industry, it is important to pick an ERP vendor with industry experience.
Educating a vendor about the nuances of a new industry is very time consuming.

To help you get a sense of the kinds of decisions that go into choosing an ERP system, check
out “The best ERP systems: 10 enterprise resource planning tools compared,” with
evaluations and user reviews of Acumatica Cloud ERP, Deltek ERP, Epicor ERP, Infor ERP,
Microsoft Dynamics ERP, NetSuite ERP, Oracle E-Business Suite, Oracle JD Edwards
EnterpriseOne ERP,  Oracle Peoplesoft Financial Management and SAP ERP Solutions.

ERP implementation
Most successful ERP implementations are led by an executive sponsor who sponsors the
business case, gets approval to proceed, monitors progress, chairs the steering committee,
removes road blocks, and captures the benefits. The CIO works closely with the executive
sponsor to ensure adequate attention is paid to integration with existing systems, data
migration, and infrastructure upgrades. The CIO also advises the executive sponsor on
challenges and helps the executive sponsor select a firm specializing in ERP
implementations.

The executive sponsor should also be advised by an organizational change management

executive, as ERP implementations result in new business processes, roles, user interfaces,
and job responsibilities. Organizational change management can help everyone in the
enterprise understand the impact ERP will have on their work. In many cases, an
organizational change management firm, rather than an internal executive, provides this
support.

Reporting to the program’s executive team should be a business project manager and an IT
project manager. If the enterprise has engaged an ERP integration firm or an organizational
change management specialist, their project managers should be part of the core program
management team.

See also: How to assemble a winning ERP team

ERP implementation: The 5 major steps

Most ERP practitioners structure their ERP implementation as follows:

1. Gain approval
The executive sponsor oversees the creation of any documentation required for approval.
This document, usually called a business case, typically includes the following:

 Problem definition
 Description of the program’s objectives and scope
 Assumptions
 Implementation costs
 Implementation schedule
 Development and operational risks
 Projected benefits

Once the business case is complete, the executive sponsor presents the business case to the
appropriate group of senior executives for formal approval to spend money and direct staff to
implement the ERP.

2. Plan the program

The high-level timeline created for the business case is then refined into a work plan, which
should include the following steps:

 Finalize team members. Key internal individuals should be identified by name. Other

required staff should be identified by role. External partners need to be selected.
Typical partners include: ERP implementation specialists, organizational change
management specialists and technical specialists.
 Complete contracts. Contracts for new software, technology, and services should be
finalized.
 Plan infrastructure upgrades. On-premises ERP systems frequently require faster
processors, additional storage, and improved communications. Some organizations
can minimize infrastructure upgrades by using a cloud ERP. But even cloud ERPs can
require infrastructure upgrades.
 Create a work plan and timeline. Tasks, dependencies, resources, and timing need
to be made as specific as possible.

3. Configure software
This is the largest, most difficult phase. Major steps include:

 Analyze gaps. Understanding the gaps in current business processes and supporting

applications helps the project team determine how to change business processes to
conform to the software.
 Configure parameters. Parameters in the ERP software are set to reflect the new
business processes.
 Complete required programming. Ideally, no changes are needed for the ERP
software. However, some programming may be required for interfaces to other
systems or for data migration.
 Migrate data. The team standardizes data definitions and examines existing files for
data completeness, quality, and redundancy. Finally, existing data is cleansed and
migrated to the new ERP.
  Test system. The system is tested to ensure it delivers the needed functionality and
required responsiveness.
 Document system. Required functional and technical documentation is created.
Typically, the vendor has documentation that can be tailored to enterprise
standards.
 Upgrade infrastructure. Complete any required upgrades.

4. Deploy the system

Prior to the final cutover when the new system is in production, multiple activities have to be
completed. These include:

 Train staff. All staff need to be trained to operate the system and be given access
rights.
 Plan support. A support team will be needed to answer questions and resolve
problems after the ERP is operational.
 Test the system. The new system must be thoroughly tested to ensure it is secure,
responsive, and delivers the functionality described in the business case.
 Make the “Go live” decision. Once the executive sponsor is confident the new ERP is
ready, the enterprise needs to switch from the old system to the new system.

5. Stabilize the system 

Following ERP deployment, most organizations experience a dip in business performance as
staff learn new roles, tools, business processes, and metrics. In addition, poorly cleansed data
and infrastructure bottlenecks will cause disruption. All impose a workload bubble on the
ERP deployment and support team.

For more on ERP implementation, see:

 11 tips for deploying ERP applications

 8 ways to get the most out of your ERP system
 9 tips for selecting and implementing an ERP system
 3 warning signs for a 'never-ending' ERP project

Hidden costs of ERP

The four factors that are commonly underestimated during project planning include:

 Business process change. Most people are content to work within the current
environment unless they are a systems analyst or worked for a different enterprise
with better systems. Once teams see the results of their improvements, most feel
empowered and seek additional improvements. Success breeds success often
consuming more time than originally budgeted.
 Organizational change management. Although process improvements make
enterprises more efficient and effective, change creates uncertainty at all
organization levels. A formal organizational change management program reassures
 staff and helps them accept the changes. With many executives unfamiliar with the
nuances of organization change management, the effort is easily underestimated.
 Data migration. Prior to an ERP implementation, enterprises frequently have
overlapping databases and weak editing rules. The tighter editing required with an
ERP system increases data migration time. The time required is easy to
underestimate, particularly if all data sources cannot be identified.
 Custom code. Although enterprises have customized ERPs for years, it remains a bad
practice. Customization increases implementation cost significantly as users demand
additional features. It voids the warranty; problems reported to the vendor must be
reproduced on unmodified software. It makes upgrades difficult; the custom code
usually requires changes every time the vendor issues a new release. Finally, most
enterprises underestimate the cost; even enterprises that estimate the initial cost
rarely include the cost of migrating to new releases.

For more on ERP costs, see:

 Calculating the dollars and cents of ERP

 The ERP upgrade conundrum: How to calculate the true cost

Why ERP projects fail

ERP projects fail for many of the same reasons that other projects fail. The most common
cause is an ineffective executive sponsor who cannot command respect throughout the
organization, is not interested in the project, or is distracted by other responsibilities. Other
ways to fail include poorly defined program goals, weak project management, inadequate
resources, and poor data cleanup.

There are several causes of failure that are closely tied to ERPs. Specifically:

 Inappropriate package selection. ERPs, particularly Tier I ERPs, are very complex

with many options. Many enterprises believe a Tier I ERP is by definition “best” for
every enterprise. In reality, only very large, global enterprises will ever use more
than a small percentage of the functionality available in a Tier I ERP. Enterprises that
are not complex enough to justify Tier I, may find implementation delayed by feature
overload. Conversely, large, global enterprises may find that Tier II or Tier III ERPs
lack sufficient features for complex, global operations.
 Internal resistance. While any new program can generate resistance, this is more
common with ERPs. Remote business units frequently view the financial or other
standardization imposed by an ERP as an effort by headquarters to increase control
over the field. Even with an active campaign to explain the benefits of the new
system, it is not uncommon to find people in the field slowing implementation as
much as possible.

Even groups who support the ERP can become disenchanted if the implementation team
provides poor support or is perceived to be rude or unresponsive. Disenchanted supporters
can become vicious critics when they feel they have been taken for granted and not offered
appropriate support.
Next read this:

 Top 9 challenges IT leaders will face in 2020

 Top 5 strategic priorities for CIOs in 2020
 7 'crackpot' technologies that might transform IT
 8 technologies that will disrupt business in 2020
 7 questions CIOs should ask before taking a new job
 7 ways to position IT for success in 2020
 The 9 new rules of IT leadership
 20 ways to kill your IT career (without knowing it)
 IT manager’s survival guide: 11 ways to thrive in the years ahead
 CIO resumes: 6 best practices and 4 strong examples
 4 KPIs IT should ditch (and what to measure instead)

Copyright © 2020 IDG Communications, Inc.

6 Ways ERP Can Help Your HR Department

12th May 2014

ERP. Enterprise resource planning. What resource of any enterprise is more

important than the people who sell the products and services, the people who make
the products and the people who support those activities?

Most of today’s ERP systems include HRM or human resources management in

their capabilities. HR functions always include recruiting, training, rewarding, and
appraising people. HR will also watch over the organizational culture, and ensure
compliance with labor and employment laws as well as compliance with other
organizations such as labor unions.

ERP Provides an Integrated Database

In one sense, ERP is nothing but a massive set of databases. Much of the needs of
ERP and HR fall into the database category. Names and tax ID’s of employees and
their pay rates. How many hours did they work? What benefits have they accrued?
Who needs to know and when is the report due?
ERP Tracks Employee Credentials
Does your business depend on certified professionals? Maybe your drawings need
to be signed by an engineer. Maybe your quality system required by your
customers depends on specific professional credentials. ERP can track the people
with the credentials and the expiration dates.

ERP Ensures External Compliance

Governments require equal opportunities for all. HR systems will track your
applicants and their backgrounds including which ones were hired and which ones
were not. A simple query will provide the necessary report data. If you ever need
to prove equal opportunities are available within your business , your ERP HR
module needs to be tracking the data for you.

...and Internal Compliance

ERP HR compliance is not only external. Managing talent is part of complying
with your plans for the growth of the business. Wages should be in correlation
across disciplines within geographic areas. Background screening helps avoid bad
hires that can disrupt the flow of business and waste time and money.

ERP Encourages Collaboration Across Departments

Your ERP HR module can also help with collaboration by connecting people who
can help each other. It isn’t unusual for a group to have a need for some talent and
be completely unaware that some person just upstairs has that talent.

Self-Service ERP Reduces HR Workload

Little things like automated recording and data collection makes people’s lives
easier. If people can update their own records online on their own time, there is no
need for a person from HR to enter documents into the database and file
paperwork. These ERP HR features will help keep employees happy and enhance
retention.

ERP implementation plan: the definitive 7

step methodology
6th February 2020

Updated:

You're planning your ERP implementation.

You know that implementing an ERP can be an arduous process.

You know - thanks to numerous reminders - that ERP implementation failure is

common, and that for this project to work, you’re going to need to do a whole lot
of planning.

First thing's first...

What is the ERP implementation process?

The ERP implementation process includes installing your software, transferring all
your data, both financial and transactional data, mapping your processes, and
training your users to actually use the software. This process will determine
whether your ERP implementation is a success or a failure.

So, where do we start?

We’ve created this guide to help you figure it all out. Packed with real-world
advice, expert tips, and quick step-by-step breakdowns, we’ll cover:

 Creating an effective change management plan (and who should be

helping you implement it)
 Hidden ERP implementation costs, and how to forecast them
 Going live, and how to evaluate the success of your project

It won't (unfortunately) implement your ERP for you. It will, however, provide you
with the information, resources, and templates to gain an in-depth understanding of
the implementation process and increase your chance of a successful project.

And isn't that almost as good?

The stages of our ERP implementation methodology 

1. Assemble your ERP project team

2. How to create an ERP change management plan

3. Estimating your ERP implementation budget

4. Starting your data migration

5. Training your users to use your ERP

6. What to do during your ERP go-live

7. Evaluating whether your ERP project was a success

1. Bring together a project team
First things first: it’s going to be pretty miserable planning this out on your own.
Creating an efficient and dedicated ERP implementation team will make your job
much, much easier.

To start off with, you’ll need the following ‘core’ members.

 Project manager: the leader. You, probably. 

 Application analyst: responsible for data migration and cleansing
 Application developer: in charge of system customization
 QA test engineer: heads up system testing and performance efforts

Yet to ensure your implementation goes as smoothly as possible across all

departments (and to avoid the entire workforce writing your carefully-laid plans off
as ‘IT telling us what to do’) you’ll need a few more people.

These will largely depend on who your key stakeholders are - and given the nature
of ERP these will vary from company to company depending on what functionality
you’re implementing.

Here are some example stakeholders you should include when implementing
various functions:

Stakeholder  Function of interests

Senior management Analytics, reporting, BI
Accounting General ledger, accounts, asset & cash management
Engineers & shop floor staff PLM, production scheduling, document management, designs
Shop floor workers Document management, inventory, designs
Sales department Forecasting, BI, CRM functions
Warehouse staff Inventory, WMS, SCM, mobile device integration

Should I hire an ERP implementation consultant?

Short answer: yes, if you don’t have the expertise in-house and you can afford it.
An experienced implementation consultant will have seen it all before, and can
circumnavigate problems before they arise.

It is possible to implement successfully without one though - don’t despair if your

budget can’t stretch to it, or your accounts department are notoriously tight-fisted.
2. Create an implementation change management plan
There are two sides to this, really.

First, you’ll want to plan out your ERP implementation in steps, and delegate
these across your implementation team depending on expertise.

We’ve got an in-depth template ERP implementation schedule here - though you

can use the checklist below to get a handle on what needs doing quickly. Before
setting off on your implementation, you should have plans in place for:

 Forecasting implementation costs and drawing up a budget

 Creating an ERP implementation schedule
 Migrating data to the new system
 Training your ERP user base
 Testing your ERP and going live
 On-the-day go-live activities
 Evaluating the success of your project

Tools like Trello, Google Sheets and Wrike are excellent for collaborating on
projects like ERP implementations - have a browse and choose the one that fits
best with your company’s project management style.

This step-by-step guide goes into each stage in the ERP implementation process

in great depth

Second, you’ll need to plan out ways to keep the company on-side during the
implementation. Change always brings a degree of disruption, but this can be
minimized by:

 Clear communication of any anticipated disruption

 Allowing adequate time for user training
 Taking key stakeholder needs into account (you’re halfway there with this
already, having included representatives in your project team)

3. Forecast your ERP implementation costs and draft a budget

How much does ERP implementation cost?

That’s a golden question. If it was easy to answer, there would be far fewer
overbudget ERP implementations and far more people volunteering to project
manage them.

According to a recent Softwarethinktank analysis:

  35% of ERP implementations were over budget by 0%-25%
 15%  were over budget by 26%-50%
 6% were over budget by more than 50%

This suggests that, overall, over half of ERP implementations run over budget.
Needless to say, budgeting is a minefield and you’ll have to be very careful.

Still, there are some costs it is possible to define. A good starting point is to
assume cost of an ERP implementation will require at least 1% of an enterprise’s
annual gross revenue at a minimum.

You should then include all of these factors in your implementation budget to
avoid being hit by hidden costs:

 Hardware/network upgrades: these will be far higher if you are

implementing an on-premise system
 Staff overtime pay: an important one to remember - “we didn’t budget for
overtime pay, sorry” is not a line that will go down well with your team
 Vendor training, customization and consultancy fees: if you’re lucky
your vendor may have included these in the initial software price, but this is
definitely not a given. Always check
 Data backups and storage: these are often bundled with cloud ERP costs -
but again - always check.

What you can expect to pay for an ERP will vary depending on a number of factors
ranging from business size, requirements, and the number of users, but a 2019
Software Path report recently found that, on average, companies spend about
$7,200 on average, per each user of a system.

Tip: For the most accurate results, you should also budget for productivity loss -
because no matter how hard you try, you’re not going to be operating at maximum
efficiency for the duration of the implementation. 

4. Start migrating your data

So it begins.

You’ve planned as much as you can. Now it’s time to get down to the actual
process of shifting your company over to the new ERP.

Data migration is the first step - if you get it right you’ll have built a solid
foundation on which to continue your implementation efforts. Get it wrong, and
things may start to crumble.
Your application analyst should head up this effort as it’s their specialty. Be
ready to assist them in:

 Data cleansing and verification

 Database setup
 Mapping legacy data to new database fields
 Data transfer to the new system
 Testing and verification of legacy data
 Testing and verification of new data inputs 

5. Start training your ERP user base

User adoption is key to the success of your ERP implementation project, and a
suitable user training plan is essential in achieving this.

There are various ways of training your workforce; but most training methods can
be divided into ‘in person’ and ‘e-learning’ methods:

Training
Pros Cons
method 
Ensures all employees attend through Difficult to coordinate across large
In-person
compulsory sessions workforces, especially with shift workers
Easily customized to specific roles; easier to Encouraging employees to complete on
E-learning
coordinate than in-person training top of regular work can be difficult

A summary of the pros and cons of in-person and e-learning training

methodologies

Regardless of which training method suits your workforce best, four features of all
successful training programs include:

 Role-based training to streamline the process and keep time-poor

employees on-side.
 Opportunities for trainees to offer feedback (and for the implementation
team to act on it
 Clear communication channels with vendor support teams

Tip: identify promising, tech-savvy members of staff to train as ERP superusers.

They can then deal with low level user issues, allowing you to focus on the task at
hand.

For best results, why not try gamifying parts of your training plan? In a study by
TalentLMS, 89% of those surveyed stated that a point-based system would boost
their engagement, whilst 62% said that leaderboards and the opportunity to
compete with colleagues would motivate them to learn. Use this to your advantage.
Small perks for everyone who completes training tasks on time (free food, extra
hour for lunch), and larger ones (cash bonus, extra day’s PTO) for your top
performers will make engaging with training that bit more appealing for busy
employees.

6. Plan and initiate your go-live activities

This is it. Your Big Day.

If you thought getting married required a lot of arduous advanced planning, you’re
going to be unpleasantly surprised by the ‘go-live’ stage of your ERP
implementation.

Things to plan include:

 System testing (pre- and post-go-live)

 Staff scheduling including required overtime or temporary staff
 Identifying metrics for project evaluation
 Creating a communication strategy for system downtime
 Network speed and reliability checks
 Data backup processes

Communication is key here, both with your team and with the wider workforce.
You’ll need to be clear on who’s doing what, when you expect it to get done and
what sort of downtime hours

For more on the go-live stage of your ERP implementation, see:

 Five aspects to planning a successful ERP go-live

 Five ways you can conquer ERP failure at go-live

7. Evaluate the success of your ERP implementation project

Start off with these simple questions:

 Has your company gone bust?

 Are they suing your ERP vendor for breach of contract?
 Did you manage to keep the project anywhere near in-budget?

If so, you’ve probably not done terribly. Give yourself a high five.

To get a bit more in-depth about things, you should use a combination of the
following metrics:

 ROI. Have you seen a return on the money you spent on your ERP?
  Decrease in human error: a well-implemented ERP should reduce data
errors due to process automation. If your training plan worked, employees
should be making the most of these features
 Increase in productivity levels: this speaks for itself. Has the ERP
achieved exactly what it set out to do? 
 Increase in client satisfaction: have turnaround times increased? Are you
processing orders quicker?

This guide to calculating ERP ROI will help you assess how successful your
implementation project has been

We've now come to the end of our ERP implementation plan. A final word before
signing off: all companies are different. You'll need to customize this template to
the needs, schedules, and idiosyncracies of your own organization for maximum
success. 

ERP failure: the human factor

23rd December 2019

There is a mountain of advice available on how to successfully implement ERP,

much of it free, and yet we continue to read of high profile failures. That many
organizations do implement successfully is incontrovertible and clearly proves that
it can be done, so the question is why even throwing large sums of money at ERP
projects doesn't come close to guaranteeing success.

To try to answer that question, this article comes at the problem from a slightly
different angle and, rather than highlighting what needs to be done to ensure
success, looks at things that most frequently contribute to failure in the hope that
forewarned is forearmed. It looks at how people can be an obstacle to success and
investigates the human element because this is the most important factor in an ERP
project. Although new technologies, such as Business Intelligence, the Internet of
Things, Blockchain, etc, are emerging, it remains true that ERP is not about
technology it's about people. So what can go wrong?

Star players omitted from the team

In the early stages of an ERP project, it is not unusual for managers to want to be
closely involved so that they can articulate their department's requirements and
ensure that the new system meets their needs. In all but the smallest projects, they
soon find that doing their regular jobs whilst freeing up enough time to do this
effectively is just not possible, so they frequently decide to delegate much of the
task to subordinates. Unfortunately, what can happen then is that they delegate
responsibility but not authority and then attempt to micro-manage those staff. They
demand that all decisions are routed through them, and they demand a right of veto
over any decisions made in their absence. The results are never good.

In anything other than a small project in a small company, the answer is to devolve
the task to people who can apply themselves full time to the task. Even in large
projects, when outside consultants and system integrators are performing much of
the work, a full-time in-house core team is required to liaise with them and to
understand, and if necessary, challenge their decisions and recommendations, but
that raises the question of who to choose as departmental representatives. It often
seems axiomatic that the best accountant should be accounting, the best buyer
buying, and the best planner planning, but that can lead to second rate people being
put in positions where they will be deciding, or at least influencing, how their
departments will be running for many years into the future. So brief them properly
and talk to them regularly but don't try to supervise them.

Internal resistance
Other articles on this website look in detail at the critical importance of change
management and its role in encouraging and enabling change, but this article looks
at a problem more insidious than a reluctance to change, and that is deliberate and
active resistance to it. To the senior management who initiated the project, and
signed off the significant investment it entails, it may seem obvious that a new
system will benefit everybody because, in making the company more efficient, it
will make it more effective and, in consequence, not only secure the jobs of all
employees but also open up opportunities for promotion as it grows.

Most of their staff will agree. But not all. A very natural and understandable
human response to change is, “What does this mean to me?”, and, though change
management can mitigate the fear of the unknown, other things need to be
considered. One is that, however bad a company's existing system, some people
benefit from it. Many of these will be 'old-timers' (though not necessarily old!)
who have become expert in gaining the most from it, at knowing how to work
around its weaknesses, how to fix things when they go wrong, and what data
within it can be trusted and what can not.

That makes them 'go to' people whenever there is a problem and that gives them a
status which they will immediately lose when a new system is introduced and
everyone is suddenly at the same level. Properly managed; these people can be an
appreciable asset because they are trusted by their colleagues and, if given
sufficient training to make them departmental 'super users', they can be vociferous
and influential supporters of the new system.

A secondary problem to be overcome arises from the fact that departmental

representatives have to be 'the best of the best'. Unfortunately, badly handled, that
can say to the people not chosen for the role that they are considered not to be the
best and some will not react well to that. They may then feel that derailing the
project is a good way to prove that they should have been chosen. One possible
solution is that, during the implementation phase, the core team can be faced with
more tasks than they can handle, so the ability to be able to delegate specific tasks
to specialist groups can be invaluable.

The challenge is to make these people understand that their involvement will be
tactical and not strategic, that their responsibility will be to work out how things
should be done and not what should be done. The worst thing that a company can
do is try to placate staff by telling them that their views 'will be taken into
consideration' because the people who use that phrase and the people who hear that
phrase usually have different interpretations of what it actually means.

The team is not a team

A team is not a group of people who work together. A team is a group of people
who trust each other and support each other. So, when a company pulls a group of
people together to manage their ERP implementation, then, regardless of the
previous comments made here about choosing the best of the best, those companies
also need to make sure that the team is a team.

The reason is that an ERP system affects many departments, so the effects of a
decision can ripple a long way. For example; a purchase order receipt affects
Purchasing, Inventory Control, and Finance, so any decisions taken about how to
handle it will have to be taken by the team and not just one department. Inevitably
there will have to be compromises and that can be difficult when people don't trust
each other. It is natural, when selecting and implementing a system, that
departmental representatives will want the best for their individual departments but
the best system for Purchasing may not be the best system for Inventory Control,
and the best system for Inventory Control may not be the best system for Finance.
So the team needs to be mature enough to be able to select the system and build the
procedures that are best for the company and not for individual departments.

A secondary reason for needing trust is that, when difficulties arise during the
project (and difficulties will arise during the project), the team needs to display a
united front. If it is ever leaked that a particular department is being unreasonable,
or dragging its feet, or being obstructive, then confidence within the company of a
successful project will quickly leak away.

Inappropriate cost cutting

ERP systems are expensive. They are expensive to buy and expensive to
implement. Before committing themselves to that expenditure companies will have
been through a cost justification exercise. Nevertheless, when the bills start to roll
in, more than a few will try to find ways of cutting costs especially when budgets
appear threatened. They can’t at this stage cut costs on software (apart from
bespoke) so the only places where cuts can have any real effect are in consultancy
and training. Both are expensive (although you will have heard the expression, “If
you think training is expensive, try ignorance”) but reducing either can cause real
damage.

With insufficient consultancy, the chances of getting the best possible system are
severely lessened.  If the consultants have insufficient time to understand what you
want to achieve, their chances of delivering what you want are not good. When
training time is reduced, someone has to decide on what gets skimped and on what
doesn’t get taught. Who is best placed to make that decision; a system supplier
who doesn’t know your business or your people who don't know what the system
can do? The results vary from disappointing to disastrous.

When implementing ERP, it is important to realize that it is not a computer system.

It is actually a people system that just happens to run on computers.

What are the main benefits of implementing

an ERP system?
9th December 2019

ERP systems are expensive to own. There is a high cost to implement the

system and then further costs to maintain it over time. Yet, businesses and other
organizations use ERP every day and continue purchasing new systems and
improving their existing systems. What are some of the main benefits that justify
those costs?

Better business decisions

Businesses rarely grow and develop following an orderly path. Individual people
and departments find needs over time and develop solutions, often with little
consideration of the needs of other departments. Spreadsheets are an excellent
symptom of those disorderly changes. A spreadsheet is easy to create and many
have the basic skill to create quite complex sheets. They are notoriously difficult to
manage and share within the enterprise.

ERP provides an opportunity to eliminate spreadsheets as the data and information

required for any user or department will be within the same ERP system and
exposed for all through common business intelligence reports, dashboards, and
reports.
Whether the workaround was a spreadsheet, an external database, or papers in a
file cabinet, ERP will help an enterprise stay in tune as all will sing from the same
sheet of music.

Regulatory compliance
Compliance requirements for a business takes many forms. One is specific formats
and content for financial statements. ERP systems are sold everywhere and the
developers put much effort into maintaining high quality and conformance to
GAAP or the generally accepted accounting practices in all the developed
countries. Even if your business has some unique disclosure requirements, ERP
gives you custom reporting tools to meet your needs.

Other compliance requirements often come from the ERP quality system support.
Inspections of all kinds follow precise protocols as inspectors record step-by-step
processes following the programmed sequence in their ERP as measurements are
made, the results are stored in ERP where they are available for reports and
analyses as needed to answer any compliance requirements.

Free users to generate profits

Today’s ERP systems all provide a common interface within each module. This
makes training users much faster and enables a business to quickly retrain in other
systems as needs evolve. In addition, screen interfaces are designed to quickly and
efficiently input the transactions. The same screens are customizable, too, enabling
further improvements in transactional efficiency. Often a series of related
transactions in different departments can be strung together using workflow tools.
All of this means users spend less valuable time performing the transactional
details of their work and can spend more time in ways that benefit the business and
build profits.

Use the ERP configuration tools to set defaults that help users by completing cells
automatically. Every second saved adds up to cost savings. Customize some
transactions so the best action for the business from a transaction is set by default.
Think of a production worker who just completed a task. When they check for the
next job, the system gives them one that is optimized and makes cherry-picking the
next job less attractive.

Conclusion
These are only a few ways a business will benefit from implementing an ERP.
Look at the needs your business has right now. Few of us have a business so well-
run that an ERP will not provide benefits that greatly exceed the cost of the
change.
Benefits of ERP Software for HR & Payroll
Management

Furthermore, the existence of a well-equippedERPfor HR and Payrollmanagement

providessecured preservation of staff datawhile ensuring quick access to them.This
informationprovides a clearer overviewof the performance and expectations of
your employees, enabling youto analyze them and achieve a better-managed
workforce. 

How ERP for HR and Payroll Management Is Beneficial For

Your Businesses?
The role of ERP in HR management is made evidentthrough the effectivenessit
brings to the overall HR department operations. The automated system reduces
data redundancy and saves a lot of time consumed on managing day-to-day
administration activities manually. 

Here, let’s take a close look at themajor benefits of using ERP software for HR and
Payroll management operations.

Enhance Information Sharing and Collaboration

Since the HR department functions centrally for any business, the data related to
employees needs to be eventually collected and shared with all other departments. 

Without a unified ERP platform that allows you to directly updated and accessed
information, the process would require additional staff to compile information
shared by different employees into a useable format. 

An integrated HR and payroll system creates a pool of information collected from

diverse sources.The data is madeavailable through a single access point.
Employees are able to view information about their payroll, work hours,
deductions, benefits, etc.,faster and easier.

The system also guarantees accuracy of shared data, thus enhancing overall
outcomes and making it simpler for different teams to work together.

The entire process is complex and difficult to handleunless you have a

proficientERP system. Integrated HR and Payroll management module provides
you with advanced features that allows you to track work hours of each employee
including theirmost efficient time, breaks, leaves and absences. 

Besides, the system notifies the HR management team in case any staff passed a
certain pre-defined threshold. This way,you are able tospotthe employees who are
consistently practicing shortfalls and move quickly to address this.

Keep Employee Records Up-to-Date

We’ve already mentionedthat the HR management teaminvolves collecting
information from various departments.Not to mention, in this scenario,the
collaboration of this huge volume of dataalways leaves a high chance for
duplication,redundancy andincorrect information.

An ERP system automates the updating process and ensures that all employee data
stored in the integrated HR and Payroll moduleis up-to-date. Theinformationis
available at a glance and the system allows you to view and extract them with only
a few clicks.

This enables you to deeply drill into the data analyticswhich is relevant in
identifying trends and spot problems while helpingyou make better and faster
decisions

Automation Frees Up Time for More Relevant Tasks

Many HRmanagement activities require data entry and reporting. Automation of
these processesremove major obstacles for the HR department.

The HR and Payroll module once integrated into your ERPsystem allows you
storing and accessinga large employee information database.Simultaneously, if you
are trying to generate reports, the system makes it faster to cite and retrieve data
based on your requirements. 

This saves timefor performing more relevant tasks and brings drastic improvement
in your HR team’s efficiency.

Efficient Attendance and LeaveTracking

When your employees request forleaves, without an integrated HR management
system, you would probably be caught off-guard and entangled with messy and
time-consuming email trailsthat could significantly disrupt your workflows and
productivity. 

The system keeps track of leaves and provides extensive leave profiles of all your
employees to simplify the way you handle their requests.Besides, the integrated
attendance systems also allow you to accurately assess the effectiveness of an
employee in terms of working hours, overtime, arrival time, etc.

Conclusion
A well designed and integrated HR and Payroll managementhelps you get a robust
HR team and mitigate challenges that arise while working with a diverse
workforce.

We are a trusted provider of industry-ready business software, offering

customization to the core to ensure that you deploy a systemthat supports the HR
department and other operational needs.

12 Benefits of ERP Software for HR &

Payroll Management
Integration of ERP with HR & Payroll management enables an organization to easily and
flawlessly accomplish the otherwise very difficult and error-prone activity. ERP software
integrates the HRD with all the other departments of an organization, and unifies all
employee and employee related information that are scattered across the company. This
helps to present a comprehensive and error-free version of the details regarding each and
every staff member of the organization.

Roadmap ERP automates the tedious data entry work of the HRD staff, especially the
manual work involved in making the Payroll. The Employee Self-Service portal faculty of the
ERP facilitates and prompts the respective employees themselves to update their personal,
academic, and professional information. This saves the HR officials from the trouble of
constantly tracking and meticulously updating the database, while it still remains updated at
its best. Thus, the solution creates ample scope for the HRD staff to effectively device
Manpower Planning, Performance Appraisal, tracking career history, Training and
Development, and other HR oriented activities. 

The software comes to play in untangling the complexities of the other HR activities also by
providing fitting digital solutions. The following are 12 critical HRD functions that Roadmap
full-suite ERP efficiently streamlines: 

1. Planning manpower requirement: The solution provides the scope for the top-level and
mid-levelmanagements, and individual departments to register their need for manpower.
Then the system verifies the requests against the available resourcesand confirms the
availability/inadequacy of manpower. In case of inadequacy the module automatically raises
a manpower-request, delegates the same for approvals through a preset hierarchical
channel, and deliversit to the Human Resources Department. 

2. Recruitment: The ERP system automates the burdensome tasks involved in the
recruitment process,and helps organizations to establish an efficient recruitment
processand select the best talent. 

3. Maintaining Employee Portfolio: In addition to personal and professional data, vital

information like details of legal documents, Passport, Visa, Driving License, Work Permit,
Identity Card, Medical Card, and Insurance, etc, are maintained by this faculty. This is of
great use for companies contracting employees from overseas to track information and
never miss out on renewals and validations. 

4. Orientation: This facility prompts the HR professionals to assignrole-specific Orientation

plan for the newly recruited personnel, and the promoted and/or transferred staff to help
them effectively fit and function in their new positions. 

5. Training & Development: This capacity of the ERP helps to identify employees' training
requisites and train the workforce with appropriateinternal and/or external programs. The
module also evaluates the pre and post training performancesof the employees and projects
the success rateof training sessions. 

6. Performance Appraisal: The ERP is capacitated to perform validation for appraisal through
10 methods, namely BARS method, Check List method, Critical Incidents method, Essay
method, Forced Choice Rating method, MBO method, Ranking method, Work standard
method, Scale Rating method, and Multi Rater Assessment. This gives business stakeholders
a wide choice to validate theperformance of employees and make the best possible decision
on appraisals. 

7. Leave and Time Management: The ERP’s support for this HR activity gives a
comprehensive description of the Accrued, Outstanding, and Advance leave profiles of
employees. Integration with attendance system enables assessment of employee-efficiency
based on worked hours, on-time arrivals, late arrivals, permission, overtime, etc. 

8. Loan Management: The ERP helps organizations to mould an efficient loan management
system to support its staffers. The integration of the system with the financial units of the
organization automates the loaning procedure by disbursing the loan through employee
payables or payroll, and enables employee loan deduction through Payroll. 

9. Business Trip and Ticketing: The solution eases this function of HRD by streamlining the
procedure in strict adherence to company-specific parametersin choosing the staff
members and their dependents who are eligible to be provided with tickets for their
periodical home-bound vacations; and in appropriately allocating funds for their tickets. 

10. Medical: The software is programmable to stick to any organization-specific medical

reimbursement criteria, and grant/restrict medical facilities to employees according to
Hospital Contract Scheme (or) Insurance Card based medical support system (or) the
medical Reimbursement policy of the company. 

11. Government Relation: The ERP's Government Relations facility is helpful in handling
employee oriented Governmental procedures, like applying for or renewing residential
permit, work permit, sponsorship transfers, exit & exit-re-entry visas, business visa's, labor
visa's, etc. 

12. Payroll: Roadmap’s combined solution for HR & Payroll effectively integrates all
employee related departments, especially the Financial wing and automates the generation
of payroll as per the company-specific pre-set formulae. This empowers the HRD staff to
process the payroll with a touch of a button. 
Full-suite Roadmap ERP solution comes with an integrated Human Resources module and
also is available as a dedicated HR & Payroll ERP suite.

Benefit of HR modules for ERP

By Editor | Published: October 10, 2014

For every business there are multiple keys to success. One of the most important is
your staff. If you manage your employees in the right way, and offer them the
information and systems they need to do their jobs, you could see business running
smoothly and profits on the rise. This is often easier said than done though, as it
can be a real challenge to effectively manage employees. That’s where Enterprise
Resource Planning, or more specifically Human Resource modules, can help.

What are Human Resource modules?

ERP, or Enterprise Resource Planning, is a suite of integrated business software
applications (often called modules) that allow companies to track and manage data
and even automate some business functions, including Human Resources.

Human Resource modules in particular are used to track different people-related

functions, such as planning, payroll, administration, development, hiring, and
more. Business services, like Standard Operating Procedures, job postings, news,
forums, tracking of work hours, and benefits, etc., can all be unified into one
module, which makes overall management and decision-making easier.

Benefits of using HR modules

Businesses that have integrated ERP and more specifically HR modules, have been
able to benefit in a number of ways. Here are 5:

1. Automated processes that free up management

A large function of HR, as with many other business processes, is data entry and
reporting. If you are trying to develop reports without an integrated ERP system,
you probably need to pull data from numerous sources which takes time. This is
time that can probably be better spent on more relevant tasks.

An ERP module data, once set up, will be more accessible. This simultaneously
makes it easier to enter and pull data together into reports. And because large parts
of daily tasks can be automated, you can ensure that what you need to complete is
actually achieved.
2. Enhanced sharing of information and collaboration
Because HR is a central function of any business, data related to HR needs to
eventually be shared with other teams or departments. Without ERP this likely
means you will need to ask different people to share their data and then compile it
into a useable format.

With ERP for HR, data is stored in a central location, or brought together to a
central location, which means that data from different sources can be shared faster
and easier. This also ensures that the right data is shared, thus enhancing overall
outcomes and making it simpler for other teams to work together.

3. Management gains a clearer picture of HR

It can be tough to gain a short-term picture of your employee resources, especially
when it comes to identifying potential resource shortfalls (e.g., double-booked
holidays, employees who are constantly late, etc.) and where improvements can be
made. For example, in most modules you can track overtime hours of employees,
and receive alerts when overtime is past a certain threshold.

If you spot that one department is consistently banking extended overtime hours,
you can move quickly to address this.

4. Data is kept up-to-date

As we’ve stated above, HR systems usually involve data from various locations.
This means that there is always a chance of duplicate or incorrect information. A
healthcare ERP module can help ensure that the data is not only correct, but also
not duplicated, which can in turn speed up decision-making and enable better
decisions to be made.

5. Reduced licensing expenses

Without ERP, your HR team could need five or more systems in order to keep
track of everything. Each of these systems will need to be licensed, which can
often be a serious investment on your behalf, not to mention the costs of setting up
and maintaining these systems.

Because HR ERP modules offer an integrated solution, you pay for one license to
cover all of your needs. This reduces overall expenses while also making it easier
to budget and maintain.

If you are looking to integrate an ERP solution in your business, contact us today
to learn more about how we can help.