What is an ERP System?
Enterprise resource planning (ERP) refers to the type of software that organisations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance and supply chain operations. These systems connect every aspect of a business enterprise. It allows for better performance and project management that helps to plan, budget, predict and accurately report on an organisation’s financial health and processes.
There are two well known types of ERP systems. Individual ERPs offer software as a service (SaaS), while a complete suite of ERP applications forms an ERP system that can be used to effectively communicate and bring together business processes to enable a flow of data between the applications, typically through common databases either on-site or in the cloud.
Understanding ERP systems
Consider an enterprise resource planning system to be the glue that holds a huge organisation’s various computer systems together. Without an ERP program, each department’s system would be optimised for its individual task. Each department still has its own system with ERP software, but all of the systems may be accessed through a single application with a single interface. ERP solutions also make it easier for different departments to communicate and exchange information with the rest of the firm. It gathers information on the activity and state of various divisions and makes it available to other areas where it can be used successfully.
Implementing an ERP into your business strategy can help to keep companies in sync and make it easy to translate information throughout the entire firm. An ERP solution may remove costly duplication and incompatible technology since it links diverse technologies utilised by each section of an organisation. Accounts payable, stock control systems, order-monitoring systems, and customer databases are frequently integrated into a single system.
ERP products have developed over time, from classic software models based on physical client servers to cloud-based software with remote, web-based access.
Benefits of using an ERP system
Businesses use ERP systems for a variety of reasons, including growth, cost reduction and improved operations. Integrating and automating an ERP reduces waste, increases accuracy, and boosts productivity. Departments with linked processes may now coordinate activities to obtain faster and better results.
ERPs enable organisations to easily access critical information for customers, vendors and business partners, resulting in higher customer and employee satisfaction, faster response and accuracy rates. Associated expenses often drop as the firm becomes more efficient.
Some firms benefit from improved real-time data reporting from a single source system. Accurate and full reporting assists businesses in appropriately planning, budgeting, forecasting and communicating the condition of operations to the company and interested parties, such as shareholders.
Consider the following scenario. You need to provide your stakeholders with an all-in-one report that contains your company’s spending, income and number of new clients for the last three months. It would take days to go through each Excel spreadsheet and combine them into one report. This unnecessary amount of work can be eliminated with an ERP system in place. ERPs consolidate data into a single database making it quick and easy to generate reports.
The evolutions of ERP systems
ERPs are constantly evolving. The idea of an ERP system dates back to the 1960s with the evolution of cloud computing. As the need for factory output expanded, so did the need for product management applications.
In the 1980s, ERP systems reached yet another significant milestone. This is when the MRP II software was introduced. This was a more sophisticated and advanced approach that supported the entire production process, going beyond inventory and raw material purchases. MRP II had more sophisticated production scheduling capabilities that made it easier to collaborate with the various corporate departments.
Then, in the early 2000s, ERP software was introduced to the world wide web. People were now able to interact with a variety of other applications that made it easier to control different areas of the business, digitally. Currently, a majority of ERP systems are cloud-based. Businesses are adopting ERP systems in conjunction with the Software as a Service (SaaS) paradigm. As a result, the majority of ERP solutions are now mobile-friendly.
Best ERP systems available in Australia
ERP systems in Australia are constantly evolving. We have put together a list of the top trending ERP systems that are currently being used by Australian businesses.
One of the world’s most mature and extensively deployed Cloud ERP platforms, represents over 20% of Oracle NetSuite’s current growth. According to our estimates, the #1 selling ERP in Australia during the previous 2-3 years.
By the middle of the past decade, MYOB’s software had grown to become the most extensively used mid-market “ERP” in Australia. Despite recent shifts away from on-premise and local solutions, client numbers remain high.
Also known as Acumatica, NetSuite’s activities eventually contributed to the emergence of one of its main competitors. After NetSuite arbitrarily terminated NetReturn’s exclusive distribution agreement (despite MYOB’s ownership of NetReturn), MYOB finally partnered with Acumatica to white-label and offer this worldwide Enterprise platform (developed in Moscow) to the Australian and New Zealand markets. MYOB Advanced undoubtedly deserves a better rating given its continuous strong market growth, but it suffers from a high cancellation rate due to some partners selling it to the wrong clients and with the improper implementation budget and technique.
SAP Business One, an Israeli purchase earlier in the century, has a solid stable of well-known brands as clients in the Australian (and larger worldwide) industry. The product arrived in the mid-noughties rather immature (e.g. lacking bank rec) and has never truly built out complete market fit (e.g. they target inventory-based enterprises yet the primary product does not enable batch mailing of statements). According to rumours, B1 is on track to merge with SAP’s Enterprise Cloud Platform, ByDesign, with the amalgamated product expected to be a big player once deployed.
Sage Intacct, a long-standing competitor of NetSuite in the United States, is a relatively recent player in the Australian market, having been purchased and globalised by Sage. Sage Intacct is a developing player in Australia with a mature, ready-made partner channel and support from a large global player with money to spend on expansion. It has tight integration with Salesforce and a pretty strong professional services and not-for-profit offering.
The Bottom Line.
Choosing the right ERP system is a key for every organisation. It is an excellent investment that, when executed and handled effectively, your business can yield considerable returns. Choosing the right ERP for your business takes time. Therefore, when selecting the best option, consider which one would work best with your business strategy. Think about if you want all your employees to have access to it, just the executive team, clients and beyond. Invest time in researching which will benefit the entire organisation, one that aligns with your business objectives and goals and as a result you should see a significant difference in how your company performs.