What is the scope of ERP

Why do you need an ERP system?

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Since modern companies today are very complex, top management is in the process of performing thePlanning and control tasksupported by a computerized ERP system. With regard to competitiveness in particular, the speed at which the information is provided is playing an increasingly important role. This can only be achieved with intelligent software and powerful hardware. Because of their ability to map the company in its entirety in a timely manner, enterprise resource planning systems have become an indispensable part of today's decision-making practice.

What is ERP

When you talk about ERP, you automatically think of software. Simply put, means Enterprise Resource Planning but first of all, to control the resources available in the company. Resources include, for example

  • Capital,
  • Employee and
  • Resources.

As the primary task of management, these must be tactically and strategically steered, deployed and controlled. Accordingly, ERP means the organization of all administrative, dispositive and controlling activities of a company. The goals of ERP are

  • the Improvement of the organizational processes and structures,
  • faster adaptability to company and market changes
  • as well as the Business process optimization.

What is an ERP system?

The ERP system is a IT-based systemSoftware solutions, that helps the management to keep track of existing resources and business processes. With the help of the ERP system it is possible for you to optimize the resources in the individual company areas

  • to design,
  • to influence and
  • effective too manage.

ERP systems are integrated programs that are based on central data management. Thereby the information flows within a business process

  • supports,
  • pictured,
  • optimized and
  • documented.

The integration of the information and applications in their entirety reduces the throughput times of the various processes and facilitates the organization of work processes in the company.

The comparison of the Cockpit of a jumbo jet used. It enables the pilot to all information via internal operating processes and vital resources and - if necessary - to intervene in the process to correct and control it.

This enables management to find suitable ones in good time Countermeasures to take to readjust and realign the course of the entire company, a division, an individual department or a specific process.

Which areas of the company are covered by an ERP system?

An ERP system is made up of various modules, such as materials management, CRM, financial accounting or sales. They all have the same database and communicate with one another.

It is part of the requirements of an ERP system that it is integrative and that Depicts the company as a whole, both in the cross-divisional basic functions and in the specialist departments or functional areas.

Department-related business processesCross-sectional functions
  • The distribution and the marketing,
  • The CRM or customer relationship management,
  • The Master data management,
  • The production
  • The Materials management and Determination of needs
  • Research and Development
  • The human Resource,
  • The Controlling and
  • The Finances or accounting incl. Accounting work in the financial accounting
  • As Payroll

Ideally, an ERP system covers all areas of the company. If you take a closer look, you can see the corporate divisions on the one hand in differentiate between specific subject areaswho each have their own tasks to perform. On the other hand, they represent cross-divisional Cross-sectional areas that make resources available for all departments and specialist areas.

Data integration through ERP systems

The real-time storage of unimaginably large amounts of data, their acquisition and analysis represents a serious challenge for the ERP systems in large companies and corporations.

Although an ERP system consists of numerous software modules, it can only fulfill its task across all industries if the data is clear and only available once across the company. Information is obtained from data and is the most valuable asset in a company. That is why clean and valuable data is important and otherwise it can cause great damage and friction losses.

How do you say in IT circles: If crap comes in, crap comes out. Only clean data guarantee clean and meaningful results.

Historical development of ERP systems

The individual functional areas of the company mentioned such as Sales, materials or human resources management were operated separately for a long time and supported by so-called island solutions. The problem here was the isolated processing of individual departments, so that inconsistencies and redundancies were not uncommon. The development of ERP systems was able to counteract this. Through the Integration of all cross-company processes and processes, division of labor is easy.

To look at the development of the ERP system, one has to go back a few decades. ERP is to a certain extent in the genes of the industry, formed the optimization of the manufacturing process in the 60s the nucleus for the development of ERP systems. Forerunners of today's ERP systems were so-called MRP systemsthat were first used in the 1960s. They were used to support material requirements planning in a standardized manner, as the name suggests: MRP - Material Resource Planning.

In the 80s these have been expanded to include functionalities for the Production planning, so-called MRP II systems. More and more functions were added by human Resource, above CRM and logistics. Historically, production - more precisely production planning - is one of the primary functions of the ERP system, which used to be better than PPS (Production planning and control system) was known.

Nowadays, computer programs that support these processes are largely an integral part of ERP systems. Older PPS systems for production planning were mostly solutions tailored to the special production requirements and were replaced over time by modular, expandable standard solutions. The term ERP was coined by Gardener, the well-known provider of market research and analysis and is today the generic term for many different systems, including material planning.

Modern ERP systems are often called ERP II referred to, the so-called second generation. In addition to internal processes, they also include cross-company areas along the value chain and are based on a web architecture. Functions like Customer Relationship Management (CRM) and Supply Chain Management (SCM) are integrated into the functions of the ERP system. This makes it possible to work on processes, regardless of whether they take place internally or externally. This makes it possible, for example, to accept externally initiated orders in order to process them internally.

Further development of ERP systems

It wasn't that long ago when ERP systems were just a tool for large companies and corporations. Even when the developers of the ERP software opened up medium-sized companies as a new group of users by developing leaner and scalable ERP systems, small companies could only dream of using a fully integrated planning and control tool. The effort for implementation, roll-out and support was still too great.

But here, too, development has not stopped. The software today is far less complex than, for example, the R3 modules from SAP and offers in the form of Cloud ERP completely new possibilities. This is why more and more small businesses are considering using ERP software, especially for them Cross-sectional functions such as CRM, procurement, sales or accounting. Meanwhile, they are also powerful ERP solutions for small and medium-sized businesses in the market, bothon premise as well ascloud-based as software-as-a-service.

ERP software on premise

In this variant, the most important operations and business processes are integrated, from

  • Sales and customer management or CRM
  • up to Controlling,
  • Accounting and
  • Payroll accounting

The effort for acquisition, rollout and operation is not only limited by the turnkey and relatively easy to use solutions it can even be planned and calculated.

lower expense

turnkey

easy to use

ERP software from the cloud

Even if the solutions mentioned above were able to significantly lower the threshold to using an ERP system for many small businesses - the one that has been offered for several years is a real breakthrough ERP from the cloud. This is Software-as-a-service solutionswith which the user can access a fully developed ERP software package online and use it for his resource planning and control. No matter in which industries the user is active - with Cloud-ERP they are costs far more accurate calculable and controllable than spending on the on-premise solutions.

In addition, the SaaS provider mature and often multi-level solutions for data securitythat exceed the security level maintained in the company many times over.

ERP from the cloud is still a relatively young topic and has in particular been linked to the question of Data availability and security to expect prejudices. For small businesses that cannot afford the software, hardware, let alone an IT department, it can be the tool of choice.

calculable costs

high data security

no need for your own IT department

Mobile ERP - the company in your pocket

In addition to the trend Software-as-a-Service and Cloud ERP, controlledMobile computing the topic of Enterprise Resource Planning. In companies of all sizes, with or without their own IT department. The BYOD phenomenon (Bring Your Own Device) meets the need of many employees and companies to use their privately used smart gadgets - be it a Smartphone, a Tablet pc or a Notebook - also work in a company and from anywhere 24/7 to be able to access the company data and their projects. With the Mobile ERPon a cloud basis ERP systems are becoming even more flexible and can be adapted and individualized even more precisely to your own needs - not only in the SME sector.

Social ERP - Social media as a factor in business information

The classic ERP system was static and geared towards obtaining information from business processes, databases and data analyzes. Modern ERP systems, on the other hand, are geared towards their users. The integration of social media elements transforms it into a tool that also understands the lively willingness and ability of employees to interact as a business process and resource.

Twitter, Facebook, LinkedIn or Xing - these are the communication environments that have been 'learned' by the company's employees. The younger generations in particular were born into a world determined by technology and use the aforementioned platforms as a matter of course. They often represent the preferred way in which information is generated, provided, exchanged and forwarded.

More and more ERP providers are taking advantage of this trend on and integrate social media elements in your software solutions. Information can be provided centrally and distributed anywhere, anytime, where and when it is needed. Personal information from social media can be integrated and collected in CRM, for example to use it as a basis for creating new campaigns.

Which functional areas does an ERP system have?

ERP systems have been proven to contribute performance increase and Cost reduction at. Unlike classic merchandise management, they map all areas and business processes of a company. The focus is not only on materials management, but also on finance and accounting, human resources, sales, marketing, research and other areas in the company. Functional delimitations, which used to be common, for example, between logistics, financial accounting and controlling, are eliminated by an overarching ERP system. All areas communicate with each other and use the same database.

.

sales and marketing

Sales have the task of offering the company's services and products for sale to customers and end consumers.

This can be done through many channels. While capital goods and services are mainly sold via direct and telephone contacts, consumer goods are sold to end consumers via stationary retail and online via the Internet.

Marketing supports sales by constantly analyzing the target groups and their needs in order to address potential buyers in a targeted manner with coordinated marketing messages and thereby increase sales.

Due to the competitive pressure, customer loyalty is of strategic importance in this process. Against this background, Customer Relationship Management (CRM) is becoming more and more important and is now integrated as a functional area in most ERP systems. The sales department can access the data from order processing and is thus continuously informed about the current status of existing customer relationships.

intensive customer relationships

Sales analysis

quoting

Materials management

Materials management is the planning, administration and control of all material movements in the company as well as between the company and other economic entities such as customers and suppliers.
The term material is broadly defined and outlines both procured goods for resale and raw materials and semi-finished products that are required for production.

They have to be procured, stored and scheduled so that they are available in sufficient quantities, in the required quality, at the right time and in the right place.

Lower inventory

Shorten lead times

Optimize delivery capability

production

Production describes the process of transforming raw materials into economic goods using energy, means of production and human labor.

In the past, complex interfaces to other systems were required to interlink production with other important functions such as procurement and sales. In the ERP system, on the other hand, all processes are interlinked and work with a common database.

Most products do not consist of a single part, but of various components that are put together according to a specified scheme. A parts list is used to check for completeness in production and to determine requirements during production planning. Multiple storage of product-related parts list data is excluded in an ERP system, which means that inconsistencies due to function-related application parts lists cannot even arise.

Production planning

Production control

Parts lists

Determination of needs

Determination of requirements or material requirements planning is closely linked to materials management. One of the most important tasks of production planning and control is to ensure that sufficient quantities of raw materials and semi-finished products are available at the right time in the right place for the manufacture of products.

Often, however, these preliminary products, which are important for the production process, are only available in larger quantities. Here, the material requirements planning must include all relevant costs for transport and storage.

The aim is to achieve an optimum that avoids production interruptions due to missing parts, keeps storage costs low and does not tie up capital more than necessary.

Thanks to constantly improved systems, it has been possible in some industries to optimize material flows in such a way that just-in-time production, with almost no warehousing, is possible.

optimal amount

in the optimal place

at the optimal time

Finance and accounting

Finance and accounting records and monitors all cash and service flows that arise as a result of operational processes.

While internal accounting deals with controlling, process cost accounting and cost centers, financial accounting or external accounting depicts the company's financial situation externally.This includes all bookkeeping and accounting tasks such as annual financial statements, the income statement and the cash flow statement.

Programs for finance and accounting are available as modules in most ERP systems because the requirements in the individual industries are quite different. The size of the company also plays a role.

manage open items

Liquidity management

Budget planning / financial planning

Controlling

Controlling is a function of company management and performs control and coordination tasks in the company.

A key focus in controlling is on the finances of a company. This is also known as operational controlling. The focus here is on liquidity, profitability and profitability. Intelligent management of budgets and optimization of financial flows can help ensure that a company is still in a position to operate profitably even when sales decline.

In contrast, strategic controlling deals with securing existing and developing new potential in the company. This is worked out with the help of target definitions, the analysis of opportunities and risks and the identification of strengths and weaknesses. The entire company environment is included in the analysis.

Control achievement of goals

Reduce costs

Increase capital

Human resource management

Personnel management is one of the central tasks of corporate management. In addition to personnel management, personnel requirements planning and recruitment are the focus of a personnel information system integrated in the ERP system.

Particular attention is also paid to personnel development, because before considering new hires, it is necessary to check the extent to which existing employees can be qualified for new requirements and functions in the company through further training measures such as coaching and training.

Payroll

Personnel development

Workforce planning

Research and Development

Competitive pressures force large companies to reinvest part of their profits in research and development of innovative products and new technologies. Research is costly, but its usable results are among the most important resources to secure the future of the company.

Against this background, a broad knowledge base about the current processes and developments in the company's own research is elementary for an ERP system.

Enterprise Resource Planning must not only include material, but also ideal resources in order to recognize all potentials in the company and to be able to take them into account in corporate planning.

Compared to large companies with thousands of employees, research as an independent area in SMEs does not usually play a major role.

actionable analyzes

Defect management

quality assurance

Master data management

Central master data management is one of the great strengths of an ERP system. It ensures consistency in the databases and thus largely smooth operations.

In large companies in particular, different systems are often used in different, overlapping functional areas. For example, sales, marketing and order processing maintain the same customer data in their own systems. Master data stocks are redundant and become more and more inconsistent over time. At some point, nobody in the company will know exactly which customer data is really up-to-date.

In addition, a lot of additional information is scattered across many departments. A data comparison becomes more and more difficult and complex over time. The central maintenance of internal company master data in the ERP system eliminates unnecessary and costly multiple entries of the same data and the data quality improves considerably.

no inconsistencies

No redundancies

clean, central data

Product data management

The product data not only includes all technical information and documents such as parts lists and CAD files from product development, but also data that is used for marketing and is assigned to product information management.

In addition, it must be ensured in product data management that data is still available - for support purposes, for example - after the end of a product life cycle when the product is no longer sold.

In addition, the processes that led to the development of the finished, marketable product are also mapped in product data management. Different versions and variants of a product are also saved so that the product can be completely reconfigured at any time.

Information acquisition

documentation

Evaluations

Document management

Countless documents are generated in the company over time. In addition to correspondence and invoices in paper form, digital documents such as e-mails, faxes, receipts and contract documents are also among the documents that are recorded and organized by the document management system. Document management in the broader sense also includes all paper documents that are scanned and are available in digitized form. In an ERP system, all of these digital documents are managed in a database so that they can be indexed and searched according to any criteria.

Audit-proof archiving

legal security

Clarity

How is an ERP system selected?

With around 300 different ERP standard solutions and an estimated 1,500 industry-specific solutions for business software, companies are often spoiled for choice.

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If the decision is made to introduce a new ERP system, it is advisable to formalize the process. In this phase, it comes down to the right questions - and enough time for careful answers, in which not only the management but also other responsible persons should be involved.

Which individual criteria apply to a company depends, among other things, on whether you are looking for a On-premise solution, i.e. permanent installation on the company's own server or for a Software-as-a-service solution decides in the cloud. Not every company wants to outsource its data and the commitment to a provider is usually viewed with skepticism with regard to the selection, operation and maintenance of an ERP solution. Many fear that the license and follow-up costs will be financially covered by the purchase.

ERP software by company sizeERP software based on the operating modelERP software by industry
  • Small business
  • Medium business
  • Large corporations
  • ERP on premise
  • Cloud ERP
  • Hybrid model
  • service
  • construction industry
  • food industry
  • Financial services
  • IT
  • Automotive industry
  • and much more

What are the criteria for choosing an ERP software?

A basic requirement for a successful implementation is the presence of one Specifications. This means a list of requirements that can also be created as an Excel table, for example. The company must be clear about what it is doing with the ERP system wants to achieve and what requirements need to be met.

Not only should the wishes of existing departments be taken into account, but the identified requirements of future areas of responsibility should also be considered with foresight. For companies in the start-up phase, the Business plan provide important cornerstones from which future process flows can be derived.

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The specification sheet for selecting an ERP system is available here as a Word file for free download.

Large companies and international corporations in particular have had the experience that a ERP system the backbone of the whole company can be. But what has become an indispensable standard in large companies and larger medium-sized companies is still subject to certain question marks for many companies in the SME sector. First, business processes are typically not as complex as they are in large corporations. On the other hand, the resources available for software acquisition, external advice, maintenance, training and upgrades are often very limited.

Although the integrated business software solutions are now also finding their way into SMEs and are being used successfully, many small companies still ask themselves the following questions: Is integrated business software worthwhile? Is the old software still fulfilling its purpose?

These questions are by no means absurd. The bottom line, however, is that access to the same business management and control resources is an enormous boost for the competitiveness of small, agile Davids compared to much larger Goliaths.

Tip: More and more providers of cloud solutions are now offering visitors their websites time limited test access so that you can get to know the ERP solution and test it with demo data or, ideally, with real data.

How long is the useful life of ERP software?

At the turn of the millennium in particular, ERP systems were introduced in many companies. Because of the year 2000 problem, also known as the Millennium Bug, and the introduction of the euro, many companies took the opportunity to replace their old systems with Enterprise Resource Planning. Since the average usage has so far extended to around fifteen years, many companies are currently looking for a contemporary alternative.

ERP change cycles show how long companies hold onto their ERP systems before switching to new solutions. This does not mean a release change, but a switch to a completely new system. They tend to beERP change cycles are getting shorter and shorter.

Regardless of whether companies have been used to mapping their business processes with the same ERP system for ten to fifteen years - on average, a switch to a new ERP software takes place at a much shorter interval than the last change.

One of the main reasons for the increasing flexibility, i.e. the shortening period of years to which the previous ERP system has been linked, is to be found in a paradigm shift. Because more and more companies are opting for cloud ERP solutions. In contrast to on-premise solutions, which first have to be installed in a complex manner, cloud ERP software is ready for immediate use.

There are other factors that contribute to shortening ERP change cycles:

  • easier data transfer
  • shorter familiarization times
  • falling costs

Providers of cloud ERP solutions also create additional incentives for switching with attractive price models.

How is an ERP system introduced?

The aim when introducing an ERP system is the holistic management of all company resources in order to increase the efficiency of operational processes, regardless of whether it is a small, medium-sized or large company. How well this works depends largely on how precisely the goals were defined and the implementation of the ERP system was prepared. The Guideline shows the essential steps of the introduction. They are intended to help ensure that the ERP software controls operational processes smoothly from day one.

1. The search for the right provider

Once the list of requirements has been drawn up, preparations for the introduction of an ERP system move on to the next phase. The search for the right provider usually takes several weeks. Often finds one Preselection instead, which is discussed in internal meetings and continuously refined. There are many questions in the room:

  • Is the provider's solution up to date?
  • Can data be transferred from existing systems?
  • Can the system be expanded modularly?

A company with twenty employees and an annual turnover of five million euros, which it achieves in the European market, is unlikely to opt for a system that is designed for thousands of employees and billions in sales. Such a solution would be completely oversized.

How do I find the right one
ERP software?
example
recommendationsAsk business partners and consultants
ForumsXing groups, LinkedIn groups
Provider selection pagesSoftselect, IT Matchmaker, Selecterp
Search engine searchERP software, cloud ERP, online ERP
Trade journalsComputerwoche, C´t, iX, IT-Mittelstand
Trade fair visitCebit, IT & Business, Tools

In order to make the wide selection of ERP providers more manageable, the functions and options of five popular ERP systems were carefully examined and compared in a clear ERP comparison.
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2. Draw up the specification sheet

The focus of the consideration is the defined requirements from the specification sheet. In order to find out which solution best covers the requirements, whether and to what extent adaptation programming has to be carried out, various tests are usually carried out in detail ERP solutions instead of.

As a result of any test installations and meetings with the ERP provider, a Specification book, in which the promised properties and solutions for process mapping are recorded. It is, so to speak, the mirror image of the specification sheet. Small adjustments to specific customer situations are also recorded here. After it has been accepted by both sides, it becomes the binding basis for cooperation between the provider and the customer.

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3. Set up the test system

So that the employees in the company can familiarize themselves with the ERP system at an early stage, a test system is set up after the formal acceptance of the specifications. As already shown, it only makes sense if the test data is "real" data from the company and the system does not contain any irrelevant dummy data. Otherwise, it would just slow down employee motivation.

Tip: When to Corporate management If the standard processes of the ERP system are sufficient, setting up a test system can also be skipped. The ERP system should then be implemented and trained promptly.

If the specifications have to be adjusted, the system should first be set up as standard and then adjusted accordingly. It is not only a question of the provider, but also of the customer. The schedule can only be adhered to if it provides all the required information on time. From the point of view of both parties, delays would only be counterproductive.

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4. Demo and tests only with real data

Real data is more than helpful in convincing customers of the solution. For example, if the company trades in clothing, test data on technical items such as computer or printer accessories would only cause confusion and make it difficult to identify system advantages.

Tip: More and more providers of cloud solutions are now offering visitors their websites time limited test access so that you can get to know the ERP solution and test it with demo data or, ideally, with real data.

5. Make adjustments

Customization programming does not always follow a consistent pattern. With classic programming, all adjustments are programmed first and then implemented at the customer's premises in one go.

In most cases, time-consuming reworking is necessary if the requirements are very complex. Alternatively, one now often goes over to iterative, that is, to proceed step-by-step. After each programming step, a check is carried out by the user. In this way, fine adjustments can be made more quickly before proceeding to the next programming step.

In modern cloud-based ERP systems for SMEs such adjustments are the exception. Nevertheless, it can happen that, for example, special price structures need to be mapped or article histories are to be tracked and therefore for selected ones Item serial numbers must be introduced.

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6. Use the opportunity to cleanse data

The implementation of ERP is not only associated with new challenges, but also offers a unique opportunity for systematic data cleansing.

Often the predecessor systems have been running for years, if not decades, and countless movement data has accumulated in the old systems. Internally, one then speaks of grown structures.

Tip: When preparing data for the ERP system, you should get rid of this by only base data how customers, suppliers and articles take over and expanded if necessary.

You can now get rid of this when preparing data for the ERP system by only taking over master data such as customers, suppliers and articles and expanding them if necessary. What do employees want to do with order data that is ten years old?

With the data transfer, the ERP system is basically ready to go. What is still missing is the training.

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7. Organize training

Whether the training takes place after all data has been completely transferred or before, depends on the process organization of the implementation and the complexity of the ERP system.

If possible, directly after the data transfer, the control of operational processes should only run in the new ERP system and the previous system or systems should be deactivated. However, if employees work in both the old and the new system at the same time, data inconsistencies are inevitable. You should definitely avoid that. Employees should therefore be trained intensively with test data before the data transfer in the new system.

Tip: Ideally be Key user trained. They can then pass on the knowledge they have acquired in their departments to the other employees and provide department-wide support.

The situation is different for young companies that are still being established. Logically, the timing of the training can be set more flexibly here. Since there is only little master data available and the number of transactions is still manageable, this data can be entered into the new system by hand if necessary, without having to develop complex transfer routines.

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8. Create documentation

It goes without saying that all adjustments and processes must be documented in detail. This also applies to the department-specific expertise in dealing with the new ERP system, because it is the introduction of new employees made a lot easier.

Tip: Are helpful Screenshotsto document the various tasks and processes.

If the system runs smoothly after an adjustment phase, the introduction is complete and real operation begins.

How can ERP projects fail?

One hears again and again of failed ERP projects. Is it due to the inadequate preparation or the complexity of the ERP system to be implemented?

Not only. In large companies there are many responsibilities, dependencies and so-called "principalities" that see their existence threatened by the introduction of an ERP system. Employees see their status dwindling or even their jobs at risk. Sticking to existing structures and tools can also cause employees to take a critical look at the introduction of an ERP system. Many fear difficulties and prefer to stick to what they have learned and used to.

Tip:Training and open conversations can counteract this attitude and contribute to increased motivation and acceptance of employees.

ERP software providers and solutions

Since ERP systems are no longer just designed for large companies, the number of manufacturers and providers is very high. The software solutions also differ in terms of type, performance and scope.

For one, there is Cross-industry ERP solutionsthat cover most of the functional areas and business processes within a company and are therefore far less complex and time-consuming than industry-specific systems. They are mainly used by SMEs.

So that Enterprise Resource Planning can fulfill its task as a navigation and control instrument particularly effectively even in more complex environments industry-specific ERP software solutions used. These specialists are increasingly used, for example, in retail, financial institutions and insurance companies, and especially in industry. For some users, customer loyalty and customer approach are more in the foreground and thus CRM and marketing. Others, on the other hand, attach particular importance to manufacturing processes and the associated storage, which must be mapped as precisely as possible by an ERP system.

cross-industry
ERP systems
industry-specific
ERP systems
integrationwidedeep
Suitable forSmaller companies and newcomersSectors such as the vehicle industry, mechanical and plant engineering
complexitylowhigh
advantagePossible uses very variable, low training costsProvider mostly specialized
disadvantageLittle depth of functionalityGreat effort to coordinate

Trend towards cross-company ERP solutions

Especially in the manufacturing industry you can see how the Trend towards complex ERP solutions runs towards. While in the past they were mostly used in-house, modern systems now network all information across the entire supply chain. The use works across companies. Not only direct suppliers are involved, but also their suppliers. This means that bottlenecks or changed production and delivery conditions can be anticipated long in advance and taken into account in the planning. This not only enables a smooth process, but also makes the warehouse superfluous. The cross-company ERP systems mark a trend in the development of software. Increasing digitization and the following innovation impulses drive this even further:

  • Internet of things
  • Big data
  • Industry 4.0

A change has also taken place in relation to manufacturers. While until a few years ago it was mainly hardware manufacturers who brought ERP systems to the market as a combination of hardware and software, today it is mainly software houses and consultants who are expanding the range.

The ERP market for Large corporations and corporations is clearly dominated by a few companies:

The market for medium business on the other hand is distributed over a much larger number of providers. These include:

ERP systems from various manufacturers can also be found on the German-speaking market. They are becoming more and more important Cloud ERP solutions for small and medium-sized businesses for example from:

  • weclapp (ERP system of the year 2020)
  • myfactory
  • Actindo

The Technische Hochschule Mittelhessen took a close look at five popular ERP systems and checked them with regard to their functions and possible uses. The results are compared in this clear ERP comparison.

What are the expected costs for an ERP system?

One of the great goals when introducing ERP systems is cost savings in the long term. First of all, however, money must be invested in order to implement the corresponding solution in the company. The amount of the costs depends on several factors. These include, for example

  • Size of the company
  • Requirements for the ERP software
  • Operating model

Many companies make the mistake of only budgeting for external costs. However, the use of personnel for the selection of the ERP system should be taken into account. Even with the introduction there are costs such as

  • Consulting services
  • Training
  • Maintenance of the ERP system

In order to avoid a financial assumption with regard to the ERP system selection and implementation, both the short-term and the long-term costs should be planned in advance. Due to the many factors that require the use of ERP software, there are no universally valid figures on which the costs have to amount. At best, there are any guideline values. For large companies, the costs of such an ERP project can be over half a million euros, medium-sized companies should plan a budget of several hundred thousand euros, while small companies expect costs in the five-digit range.