What is an ERP System and is it Right for Me?
Is an ERP system right for your organisation?
Confused or concerned about ERP systems? Looking for a HCM that really supports your people needs? Let us explain what an ERP is, the pros and cons of this type of system, and alternative options, to help you get the best system for your needs.
What is an ERP?
An ERP, or Enterprise Resourcing Planning solution, is an end-to-end management system which aims to automate and integrate the company’s core business requirements. When it comes to choosing new software for your organisation, Enterprise Resource Planning, or ERP, is often considered to be the best solution for larger companies, with a single integrated system for all areas of the business. The idea is that this offers seamless cooperation between departments, rather than silo workflows.
However, realistically, these decisions often fail to consider the benefits and implications of this solution on all areas of the business, as well as its employees. They often focus more on the needs of financial teams and supply chains, where the integration offered by an ERP can be extremely beneficial for streaming payments and deliveries.
The difficulty is that whilst all these modules are available, the end result doesn’t always match up to expectations.
What does an ERP cover?
Areas that ERP solutions can encompass include:
- Finance
- Customer relationship management (CRM)
- Supply Chain
- Marketing
- HR
ERP suppliers include:
- SAP
- Oracle
- Workday
- Unit4 Business World
- Sage
Big brand names provide confidence for customers who trust in the experience and long-term viability this type of solution supplies.
ERP pros
It's important to think carefully about what you want to achieve from utilising an ERP. Here's a list of positives that ERPs claim to deliver.
- One big solution for your organisation’s requirements
- Well-known brand name provides trust and confidence in the service
- Claimed integration across different departments from HR to finance
- Company data is held in one place
- Integrates with other third party systems
ERP cons
Despite their claims, with today's modern workforce demands, ERPs often fall short and are 'not fit for purpose' for agile businesses. Here's a list of ERP downfalls you should consider.
- Expensive – every little extra or system fix has an additional cost
- Lacks customisation – you get what you see, and can’t add a lot of personalisation
- Inflexible – it’s an out of the box solution that you can’t really edit
- Complex – lot of different modules, with some areas never fully implemented
- Long implementation time – easily 2 years for the core modules
The impact of ERP on HR
An ERP might be the best solution for your organisation, but it’s important that every option is considered and due diligence is carried out for every option available. HR teams need to step up and start getting involved in these conversations to protect employees’ best interests when it comes to internal systems. If they struggle to use your implemented system, its efficiencies will be significantly reduced, along with employee morale.
ERPs don’t have to be a single supplier system either. Multi-vendor ERP solutions offer users the benefits of an ERP, combined with the support of specialist software for certain areas of the organisation, such as HR.
If you’re concerned about using or implementing an ERP, or you've finally had enough of settling for software that can't deliver, download our handy guide and persuade your organisation to reconsider its systems and processes.
The case against ERP: making the most of your people processes
Sometimes it can be difficult to know where you can improve efficiencies and make savings. Without this knowledge, making a case against an ERP could be difficult.
MHR can help with a team of expert consultants who can come out to your site, take a look around, and make suggestions on how you can make the most of your people processes.
If you're currently reviewing your HR and Payroll system or looking to find an alternative to your ERP, we can help you do your due diligence and understand what your business needs are and what is the best HR/Payroll system for you.
This advice will set the groundwork for a personalised service that would be impossible to get from an out of the box ERP solution, and start your argument for a specialist service.