Integration is the underlying strength of ERP software. By cultivating a single view of company data, the organization can substantially improve information flow, data consistency, and collaboration across department boundaries.
When evaluating ERP, manufacturers should consider several key attributes that generally define ERP software:
These attributes of ERP software reflect the importance of integration and sharing information across the enterprise. Without ERP, automated data exchange across departments can be limited, redundant data entry may be required, and reporting inconsistencies are often a problem. An ERP system allows information to flow freely across departmental boundaries, which simplifies reporting and improves decision-making.
I asked Roman Bukary, who runs manufacturing industries marketing for cloud-based ERP vendor, NetSuite, to explain the benefits that ERP brings to manufacturers:
"Modern ERP delivers a foundation for manufacturers to run their business from customer orders all the way to manufacturing production..from orders to cash.
"The best ERP solutions do much more than just provide "dumb" process steps, because it enables manufacturers' profitable growth through integrated financials, reporting, management, inventory tracking, and asset utilization.
"Customization and encapsulation of best practices is another significant benefit of ERP for manufacturers. The best software incorporates the manufacturer's own data along with industry metrics such as SCOR or ISM, as well as potentially vendor's aggregate industry knowledge.
"Yet another important feature of ERP is the ability to merge customer insights with a 360-degree view of the business, to ensure that changes in customer buying patterns intelligently propagate through the entire enterprise and alter manufacturing production schedules and inventory levels.
"Finally, the very best ERP ensures clear alignment between strategy and execution - translating tactical goals into specific business actions that support the organization's strategic intent."
Roman suggests several points for manufacturers to consider when evaluating ERP systems:
Achieving these benefits often requires an extensive implementation process. Frequently, this involves changing and improving your processes, which can be a source of temporary disruption to the company. Implementation can involve risk of delay and cost overruns, particularly for large companies, which explains why some buyers criticize ERP as potentially expensive and difficult to deploy.