Tuesday 19 June 2012


ERP - Invention?

Inventions: cars, telephones, radios, cell phones and computers these inventions happened in a time of need or necessity to make the lives easier for everybody using them. I can’t imagine my life without my phone or my laptop and I can’t comprehend how I ever managed without them. No wonder that inventors throughout history still gets celebrated today for what they discovered and invented even centuries ago. I wonder if the people that designed the 1st ERP system also have a “Newton moment”, I don’t think they had an apple fall on their head though, but I can imagine that the breakthrough moment could have felt as amazing as realising how the apple fell.

If you look at it logically, ERP systems were developed for the simple purpose of running your company and running it successfully. ERP = Enterprise Resource Planning; it explains exactly what it does. It is a complete system that can assist in every aspect of your business. Sadly, a lot of businesses fail very soon after being established. This is almost always due to bad planning or not having the proper management or controlling helplines in place. This is the reason for ERP systems being ‘invented’. A bunch of smart people, through the process of trial and error, created a system that can possibly save a company from bankruptcy. I’m not saying that each and every business needs an ERP system to run successfully, but it sure makes the process a whole lot easier.

I did a little study of my own on how ERP systems can be implemented into a business to ensure productivity and agility from the beginning.

Following below, is the natural history and indication of how a business gets started and how an ERP system can assist a business from day one:

Year one

Year one of your business is probably the infantile year where a lot of your business is based on financials and ensuring your company shows rapid growth. A lot of businesses make the mistake of only buying and implementing an accounting package. This is fine and this package can and does work, but what of year two?

Year two

So after year one, your business is starting to take off and you can see some growth on your revenue. Now that your business is making money you might consider a manufacturing your own products. For this, you will need a manufacturing software package, but you only have an accounting package. So what happens? You scrap your accounting package and you move on to software that has the ability to handle both your financials as well as the manufacturing side of your business.

Year three

By year three you can already see a huge difference in your business and how your business is run. Workflows that got implemented in year one may not necessarily be of importance now. So now that your business is financially strong and manufacturing its own products you need to look at a system than can handle warehousing, managing of deliveries and controlling of your stock. So, once again, you scrap your previous system and implement a system that can handle this function as well.



Year five

This is the time where the business is doing really well and you have already reached your five year plan. You can see your business flourishing, but you need a system that will help you manage your client relationships more effectively. All your systems that you implemented are showing results. But a system to track clients, keep their records and who knows maybe even run successful marketing campaigns are now inevitable. But, surprise! Surprise! You need another system that can handle this aspect of your business as well. So your previous system gets scrapped once again and a system with CRM (Customer Relationship Management) capabilities gets implemented.

The future

Finally, you have a successful business and an ERP system that can manage all aspects of your business. Would it not have been easier to implement an ERP system in year one that could have handled all these aspects of your business and that could have saved your company millions? That is the beauty of ERP systems that are designed to assist in all aspects of your business from the start; they consist of all these functions, not necessarily activated, but readily available when needed.

Gone are the dark days where businesses are run without any proper helplines. What a breath of fresh air to know that an ‘invention’ as great and powerful as the right ERP system can improve your business and help it grow. Who knows, we might be celebrating this system in a 100 years from now; not that I will be around to see it, but here’s to hoping I will.

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