By Jennigay Coetzer – Business Day, 23 February, 2011

ERP is a generic term for a system that covers all business processes and not just accounts, or stock, or manufacturing, or human resources and different ERP systems provide different levels of sophistication.

Tier one ERP solutions are suitable for large organisations with thousands of users, but solutions are also available that will suit the pockets of smaller companies, are simpler and quicker to implement, are locally supported, and will produce real returns, says Swati Desai, country manager for HansaWorld South Africa..

She says smaller businesses need to get quick results and have access to management reports that will help them make business decisions. She says most tier one ERP systems are expensive and take at least 15 months to implement because they require a lot of planning and scheduling.

“Smaller companies could go broke in that time.” She says many smaller companies are using spreadsheets to analyse information and are only finding out months later whether products are profitable or not.

But there is a perception among smaller businesses that all ERP systems are expensive and take 15 months or more to implement. “So they would rather invest their money in stock,” says Desai.

However, she says, ERP products are available that are 30% to 50% cheaper and take three to four months to implement. It will often benefit smaller businesses to consider a hosted ERP solution, whereby they can access the system online from a service provider’s data centre on a pay per use basis, instead of installing it in-house, she says.

They do not have the headache of running the system themselves or doing backups, because the service provider will do it for them, and the cost is an operational expense as opposed to a capital outlay.

There are plenty of reasons for many smaller businesses to implement an ERP system, as opposed to an accounting system, especially those in the manufacturing and retail sectors, says Patricia Martins, Dynamics business manager at Microsoft South Africa.

She says retailers’ point of sale systems will need to be integrated with their financial systems and their warehousing systems if they have one of these. “If a retailer handles its own distribution and is running an accounting system, it will need a separate warehouse management system.”

If these systems are not tightly integrated, it will be a major task to consolidate the information, says Martins. This leaves room for error and does not provide a full view of what is going on throughout the supply chain, she says.

Similarly, companies involved in manufacturing are moving to just in time delivery and need to track what is happening throughout the supply chain, says Martins. This will include the processing of orders from sales, the sourcing of components from suppliers, the production of the goods, the distribution and delivery of these to customers, and the feeding of information into an integrated financial module for billing purposes.

They will also need to keep track of components from different suppliers and need an ERP system to do all this. “This cannot be done using spreadsheets,” she says.

She says most suppliers of ERP systems that target smaller businesses provide packaged versions to suit the needs of specific industries and include best practice processes that are mapped accordingly. “They can then use these best practices as guidelines for running their business.”

Immo Böhm, MD of Afresh Consult says today, companies need an ERP system that provides a single integrated business platform that caters for all business processes. He says this includes all communication activity that flows through the PBX, email, fax, SMS and web chat.

“Systems that loosely interface with the ERP system will just capture transactions and not other interactions that are not kept in the main system.” When faxes and emails come in it should trigger a workflow process that routes them to the appropriate person, for example by picking up the customer name from the content.

It should also be possible to set up rules for routing calls to specified recipients in the absence of the person who normally deals with that particular customer, says Böhm. In addition, if customers call to place an order and they have an outstanding balance, the call should automatically be routed to the accounts department.

Even when employees are interacting on their cell phones with a customer or any other business contact they should be able to access details of any previous interaction. They should then be able to record a brief summary of what happened during the conversation, on their phone.

This information should automatically be uploaded into the ERP system and if need be escalated through the workflow to someone else, says Böhm.

He says, with the right system, this can be done by installing a small application on the phone, which will prompt the user to enter the appropriate information. “Not all ERP systems do this,” he says.

Jennigay Coetzer is a freelance business and technology journalist with 25 years experience, and she writes regularly for Business Day. She also runs media training and writing skills workshops, and is the author of A Perfect Press Release – or Not?, a guide to writing and distributing effective press releases, an electronic version of which can be downloaded free from her website: www.jennigay.co.za.

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