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January 18, 2020

Out-of-the-box ERPs: Are they still a fit for your business?

The Digital Wyatt ERP of Software

Businesses small and large utilize ERPs to manage and automate their front and back-office functions related to technology, services, accounting, manufacturing, supply chain and even logistics. The goal? To reduce manual labor, see real-time data, improve financial compliance, to automate core business functions and simplify existing business workflows.

Essentially, ERPs (or Enterprise Relationship Planning systems) are the digital Wyatt Earps of work operations for businesses; keeping vital tasks and functions in line and organized to keep the peace within your organizational workflows. (And for the sake of this metaphor, we’re talking about Kurt Russell’s Wyatt Earp, not Kevin Costner’s.)

When a business chooses to automate their business operations using an ERP, they can choose from the array of out-of-the-box solutions in the digital wilderness or they can choose to have a custom-built solution developed from the ground up to fit (and to grow with) their business like a glove.

Many companies go with out-of-the-box ERPs, as they can be more cost effective—which is appealing to budding enterprises still finding their footing in their digital transformation. The question then becomes how long before your business outgrows your out-of-the-box ERP software? Is it scaling to your growing business needs? Allow us to break down the good and bad of ERPs and if it’s time to consider a custom ERP for your organization.

R-E-S-P-E-C-T the E-R-P

What is an ERP? With an automated Enterprise Relationship Planning system, small or large businesses can streamline their data between several departments through various modules (and even 3rd-party apps) in real time to establish applicable processes which help to improve business outcomes based on confirmable, tangible records.

Though that can seem jargon-filled, basically ERPs refer to the systems and software packages used by businesses to manage day-to-day operations, such as human resources, procurement, accounting, sales, project management and manufacturing and/or distribution processes.

Benefits of ERPs can include:

  • Gives real-time view of data that can help companies address concerns proactively and drive improvements
  • Improves financial compliance with regulatory standards and reduces risk
  • Automates core business operations such as lead-to cash, order-to-fulfillment, and procure-to-pay processes
  • Enhances customer service by providing one source for billing and relationship tracking
  • Helps eliminate redundant processes and systems, dramatically lowering the cost of doing business overall
  • Being cloud-based, systems are easier to implement and manage

According to a report by Aberdeen Group, the implementation of ERP solutions showed an increase of 33% improvement in inventory returns, 18% faster cycle times, and 17% more compliance for internal schedule. Additionally, ERPs reduce administrative costs by up to 13% and operational costs by up to 14%.

Not all ERPs are Created Equal

There’s no doubt that ERPs add value and financial transparency to any business, but not all out-of-the-box ERP software systems are built the same. And certainly, not all custom-built ERPs are built the same, as they’re tailored to each business. Each system will carry their own strengths and weaknesses, from various functionalities to support provided.

Some of the limitations you’ll find with out-of-the-box ERPs include:

  • One-size-fits-all certainly applies; not every module will be applicable for every business
  • Deployment can be problematic depending on existing systems
  • Many systems tend to fall short when it comes to businesses with complex revenue and billing structures
  • Lack of scalability with growing enterprises
  • Features and tools vary from ERP to ERP
  • Some custom coding may still be required to configure appropriately

According to a report produced by Panorama Consulting, 37% of respondents with out-of-the-box ERPs still needed some form of dev customization for their software solution to truly integrate with their existing operations.

Where are You with Growth?

If you’re currently using an out-of-the-box ERP for your organization, it may be time to reevaluate if your existing system is still working with your operational needs. With organizational growth comes the reality of scaling. Will your ERP still be a fit for your business in two years? Five years? Is your ERP cloud-based or an on-premise application?

95% of respondents improved some or all of their business processes with the ERP that fit their business operations. Are you part of that number? If not, we can help.

It’s never too early to find out if your business is outgrowing your existing ERP. For a free consultation about your existing ERP software, give us a call at 559 560 3300 or email us at [email protected].

This post was written by Celeste A. Barron, Content Development Manager. You’ll find her running late for her next meeting. Always.

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