ERP Information for Existing and Potential ERP Users

FAQ Enterprise Resource Planning (ERP)

Enterprise Resource Planning (ERP) is a group of business management software that integrates the key business processes such as finance, sales, purchasing, inventory, manufacturing, etc. of enterprises, businesses, and organizations.

ERP enables seamless and efficient execution of business processes from orders to cash. It captures business transaction data for planning,  management analysis, and reporting. 

Enterprise Resource Planning System

Enterprise Resource Planning (ERP) solutions comprise functional modules for key business processes and may vary for different industries.

All ERPs will at least consist of the following core modules:

More advanced ERPs may have advanced modules  to meet the needs of the specific industry:

Some ERPs enable third parties to build add-on modules for niche markets and requirements.  Some of these examples are:

  • Dealership Management
  • Mining
  • Retail Management, etc

The following characteristics should be available in Enterprise Resource Planning (ERP) solutions:

  • Integrated
    • ERP should integrate core Business Processes such as sales, purchasing, inventory/logistics, finance/accounting
    • It should make available advanced functionalities such as manufacturing, marketing, project, service management, HRM, and other industry-specific functionalities
  • Extendable
    • ERP should have the ability to integrate with external systems such as E-Commerce Web Site, IoT System, Point of Sales (POS), Artificial Intelligent (AI), etc.
    • It should have the ability to allow third parties to build add-ons to enhance its core functionalities (POS, E-Commerce, Dealer Management System, etc)
  • Configurable – An ERP should have the ability to change the design of key business flow without the need for tedious programming and coding
  • Centralized Database in an ERP should be able to acts as a central depository of information for:
    • Management Reports
      • Pre-built reports with filtering functions
      • Built-in report design tool
      • Third-party report design tool
    • Business Intelligent (BI) and Analytics
      • Built-in information dashboard
      • Built-in BI tool
      • Third-party BI tool
  • Programmable – An ERP should provide the use of programming code:
    • To alter part of the behavior of the core software to meet specific business needs
    • Build API to connect to other systems
    • Code management scheme and tool to manage the customized codes and their future version upgrade
  • Upgradable – It must be able to carry out future version upgrades for its core software, configuration, add-ons, and customizations without the need for fresh implementation
  • Scalable – A capable ERP must be able to handle the transaction volume of its intended projects
  • Improve Decision Making – from timely availability of business information
  • Reduce Processing Costs for Business Process Execution – from efficient execution and automation of integrated business processes.
  • Inventory Optimization – from better information and planning
  • Faster Customer Fulfillment – from integrated business processes
  • Better Cash Flow – from faster order tracking, invoicing, payable tracking, optimized inventory, and shorter sales cycle.
  • Reduce Errors – When functional areas are linked, users downstream can easily discover the errors and misses of the upper-stream users.  A linked system also offers better traceability of errors.

Companies and organizations should consider investing in ERP solutions when their business expanded to the following stage:

  • Managing beyond the line-of-sight – Management is no longer able to personally track and control business operations effectively and efficiently
  • When there is sufficient ROI to automate repetitive business processes resulting from the increased transaction volume
  • Treating ERP Projects as IT Projects

ERP projects should be treated as Business Process projects rather than  IT projects.  It should preferably lead by a senior manager who understands the business processes and requirements rather than an IT person (Except in cases when the IT person has a deep understanding of business processes and management requirements)

  • The ERP Systems should Replicate our Existing Business Processes

This misconception often leads to heavy customizations of the ERP solution that increase the risk and total-costs-of-ownership of the project.

Just like there is no one best car for everybody, there is no one best ERP.  Organizations and companies have different cultures, processes, resources, business life cycles, and management objectives.  Each ERP has different strengths and trade-offs when evaluated based on each organization’s situation.

The key to finding the best ERP is to focus on the most appropriate ERP that meets the expectations, resource constraints, budget, project timeline and mitigate against the strengths and trade-offs of the different ERP options.

Evaluating and selecting an Enterprise Resource Planning (ERP) solution is a lengthy and complex process that will take months.  There are many complex information and considerations to deal with but the key steps can be summarized as follows:

  1. Form an Evaluation Committee that consists of key business stakeholders and decision-makers
  2. Establish the objectives, system requirements, and project schedule
  3. Research on the available ERP solutions and vendors
  4. Shortlist ERPs for further evaluation
  5. Invite the shortlisted ERP vendors for discussion, presentation, and demonstration
  6. Clarification and thorough discussion with the preferred vendor including interviewing consultant and customer site visit
  7. Negotiation and finalize the final vendor

You can read our articles on ERP Selection for more information.

Multiple types of knowledge are required for effective ERP evaluation and selection:

  • Minimum Knowledge
    • Basic understanding of Finance and Accounting concepts
    • Strong focus on Business Process Optimization
    • Strong understanding of Information technologies and trade-offs
  • Bonus Knowledge
    • Leadership quality in managing the complex evaluation process
    • Background knowledge of the ERP Industry and its operations
    • Understand the Management objectives and concerns
    • Experience in ERP evaluation and implementation

Learn more about how 1st ERP Consulting can help you evaluate the right ERP solution to optimize your business.

The terms ERP (Enterprise Resource Planning) consulting or ERP Consultants need to be differentiated between:

  • Consultants who sell, market, implement, and support specific ERP solutions, and
  • Third-party ERP consultants who are product-neutral and provide ERP consulting services to help end-user companies/organizations evaluate and implement the most appropriate ERP solution based on analyzing their requirements and readiness level

1st ERP consulting provides product-neutral ERP consulting services to help companies and organizations optimize their business through better ERP practices.

Learn more about how 1st ERP Consulting can help you optimize your business with the right ERP solution.

Yes, if:

  • You do not have experienced internal expertise
  • Your organization is sizeable and you expect the project to be complex
  • You failed in your previous project

No, if:

  • You have internal resources that have deep involvement in previous successful evaluations and implementation of ERP
  • That you expect the project to be small and straightforward

Learn more about how 1st ERP Consulting can help you evaluate the right ERP solution to optimize your business.

Latest Enterprise Resource Planning (ERP) Articles for ERP Users

Optimizing your Business through Better Enterprise Resource Planning (ERP) Practices

As we embark on a journey through Singapore's history intertwined with the evolution of the ERP market, we uncover a narrative of symbiotic growth and adaptation. From the heights of economic booms to the depths of global recessions, the trajectory of ERP mirrors the ebbs and flows of Singapore's economic landscape, shaping the fortunes of vendors and users alike.

Against the backdrop of economic milestones, government initiatives, and technological advancements, ERP emerges as a linchpin of Singapore's quest for innovation and competitiveness. Yet, the story is not just one of triumph; it's a tale of resilience in the face of challenges, where ERP vendors navigate market consolidations, pricing dynamics, and shifting user expectations.

For users, ERP becomes more than just software—it's a strategic enabler, a catalyst for organizational growth and efficiency. From multinational corporations to burgeoning startups, the adoption of ERP reshapes business landscapes, driving productivity and competitiveness in a rapidly evolving world.

As we delve deeper into this narrative, we uncover invaluable lessons and insights, paving the way for future articles where we'll explore the lessons learned and offer recommendations for navigating the ever-changing terrain of ERP in Singapore.

Exploring the delicate balance between in-house ERP resources and external expertise unveils a nuanced landscape for companies invested in Enterprise Resource Planning (ERP) systems. The allure of cost savings through in-house solutions is met with the stark realities of outdated expertise, management's unfamiliarity with ERP intricacies, and the limited need for constant in-house ERP work.

This discussion sheds light on the crucial considerations for companies, emphasizing the need for a balanced approach to customization, stringent documentation practices, and maintaining collaborative ties with ERP vendors. The concept of Return on Investment (ROI) becomes a guiding principle, prompting companies to evaluate the costs and benefits of in-house resources against the strategic insights offered by external ERP consultants.

As the technological terrain evolves, the recommendation becomes clear: For companies navigating the complexities of ERP without internal expertise, engaging an external ERP strategic consultant is a prudent choice. Providers like 1st ERP Consulting bring a wealth of knowledge, steering companies through the intricacies of ERP strategy with efficiency and foresight. This excerpt encapsulates the essence of a judicious approach, blending in-house proficiency with external guidance for an optimized and strategically sound ERP journey.

Embark on a transformative journey as we demystify the intricate world of ERP selection. Navigating the complexities of software suitability, implementation prowess, and long-term sustainability.

Imagine a future where your ERP project not only meets but exceeds expectations. It begins with understanding not just the "What," but the "How" and "Who." With us by your side, consider your ERP journey elevated, propelling your business toward unparalleled growth.

Are you ready to take your business operations to the next level? Discover the key to success in selecting the perfect Enterprise Resource Planning (ERP) software. Our comprehensive guide not only dives deep into the essence of ERP software selection but also introduces you to a revolutionary evaluation methodology. Don't miss the opportunity to make informed decisions for efficiency, growth, and cost-effectiveness. Read now and embark on your journey to a brighter business future!

🚀 Risky ERP Selection and Implementation 🌟 In this exclusive article, we share insights into the telltale signs of risky ERP projects and how to steer them toward success. Discover the key danger signals to watch out for, including excessive customization, lack of top management involvement, and challenges with key users. But fear not! Unveil powerful strategies to mitigate risks and ensure smooth ERP implementations. Whether you're a business owner, project manager, or ERP enthusiast, this article is a must-read for anyone looking to navigate the complex world of ERP projects with confidence. Don't miss out on this treasure trove of knowledge from a renowned ERP consultant! 🕵️‍♂️💼 #ERPSolutions #ProjectManagement #RiskMitigation #BusinessTech

Discover the untapped potential of ChatGPT and AI in the realm of Enterprise Resource Planning (ERP) systems. In this article, we delve into the dynamic fusion of AI technologies and ChatGPT with ERP, unraveling the transformative power they hold for businesses. Explore how AI-driven insights and the natural language processing capabilities of ChatGPT can revolutionize user experience, streamline processes, and unlock the true value of ERP. Join us on a journey where ERP meets AI, and witness the convergence that is reshaping the landscape of Enterprise Resource Planning, paving the way for a new era of efficiency, intelligence, and strategic decision-making.

How can AI enhance enterprise resource planning (ERP) systems? Enterprise resource planning (ERP) is essential for businesses looking to manage their operations and drive growth. However, ERP systems are often rigid, inflexible, and slow to respond to changing business needs. AI tools such as ChatGPT can improve ERP usability by automating routine tasks, enhancing data analysis, and providing real-time insights into ERP data. In this article, we'll examine how ChatGPT and other AI tools can revolutionize how organizations approach ERP. We'll also provide case studies of the successful implementation of AI in ERP systems.

This article sheds light on the challenges of implementing ERP systems in the manufacturing industry. It highlights the key factors that contribute to poor manufacturing ERP implementation, such as weak product costing and project costing knowledge, poor mapping of manufacturing processes, and customization without understanding the consequences. The article provides practical insights for successful manufacturing ERP implementation and outlines the minimum expectations for a fully-implemented system.

Manufacturing companies are facing a rapidly changing and challenging landscape with Industry 4.0, a potential recession, the evolution of AI, supply chain disruptions, and other challenges. But did you know that an optimized ERP system could be the solution to mitigate these challenges? In this article, we explore how ERP systems can help manufacturing companies stay ahead of the game and navigate these challenges with confidence. From maximizing ROI to expert advice, learn how ERP solutions can help you stay ahead of the curve and succeed in a challenging industry.

Learn about the history and evolution of Enterprise Resource Planning (ERP) and why it is more important than ever in today's business world. Explore the impact of the COVID-19 pandemic and supply chain disruptions on the increasing interest in ERP, and discover how this business management software can benefit your organization.


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