Acronyms Are Hard: ERP Enterprise Resource Planning
Acronyms can be hard to figure out. If you want proof, look no further than our Acronyms Are Hard series! If you're looking to learn more about the basics of ERP, look no further.
ERP stands for Enterprise Resource Planning. This will typically be broken down into a couple of sections depending on the software platform(s) of choice and the specific business. ERP has become the backbone of modern business systems. ERP systems allow virtually every part of the process to be input into databases then supported by software interfaces to organize with the data and information. Using an ERP, people can pull up relevant information (query the data) and understand how everything is operating at any given point. An ERP system can replace dozens or hundreds of filing cabinets for a small or medium size business. ERP Systems also allow you to access the data without being in the same room (or country) as the filing cabinet. Many of Corso System's customers who use ERPs want to integrate their ERP into their Manufacturing Execution system. (Check out The Ultimate MES Guide for more info on MES)
Common ERP Systems in use today are SAP, Microsoft Dynamics, Sage, Epicor, IFS, and Netsuite.
Anatomy of an ERP System
If the ERP system is the backbone of modern business, the CRM is its heart and soul. CRM stands for Customer Resource Management. This is where you put all your customer and vendor data. When used properly, it's the equivalent of your Rolodex, notes, and collective memories. Birthdates, anniversaries, important upcoming projects, reminders—just about everything can be contained within a CRM system. Salesforce is a well known example of a specialized sales CRM. Hubspot is another example of a powerful CRM, and is what Corso Systems uses to keep track of customers, clients, and prospects. An ERP can also have a Warehouse or Inventory Management section to delineate your inventory. Human Resources can also make use of an ERP for time tracking, pay sheets and other important information about employees. An ERP can track all your purchases and orders. If you're in manufacturing, this could mean raw materials in—and finished goods out. Some companies set up an ecommerce business directly integrated with their CRM.
ERP Limitations
Of course, there are limitations to ERP systems. First, if you're buying an off-the-shelf ERP, you many need to either adopt a new process or implement many customizations. Secondly, there is only so much you can do with individual modules. Yes, you can figure out factory inventory. But to get into parts you're currently using along with adding barcodes and eKanBan, then you will likely need to expand the MES functionalities and institute a push/pull integration with your ERP.
Build or Buy?
For the vast majority of situations, the answer is easy: buy and customize. Figure out what your core needs are and look at which existing software systems can facilitate them. But, if your core competency is in software, then you may want to look at building your own ERP. The best example of this is Inductive Automation's internal "ERP".
ERP Options
The Big 3:
SAP
Oracle
Microsoft Dynamics
If you're looking for some specifics on these, or help with integrations, please ask us. Many manufacturing companies are also using the SAGE products, specifically SAGE X. But, many other options exist—the best option will depend on your needs. Another benefit: we can help you automate your time cards! Want to know more about ERP systems or talk about integrating yours with your SCADA system? Contact us and we will be happy to walk you through the process.
Updated - 6/14/2022