Best ERP Software
ERP stands for Enterprise Resource Planning. It is a business process management software that connects and supports finances, supply chain, operations, reporting, manufacturing, and human resources. ERP Software can create a single management cycle. Modern solutions also allow each department to keep an eye on the work of other departments. Additionally, ERP covers many functions of a company such as: Finance (overview of financial indicators in real time from any device, automation of daily tasks); Personnel management such as payroll; Employee performance tracking; Manufacturing (simplifies business communication, automates daily processes and helps manufacturers meet customer needs by managing data in real time); Supply chain management.
Odoo is a fully-integrated, customizable, an open-source suite of business applications. A majority of the business needs such as CRM, Sales, Project, Manufacturing, Inventory, and Accounting are met through this all-in-one software solution. Odoo is designed to meet the needs of companies regardless of size and budget.
ZapERP is a multi-channel eCommerce Inventory management software helps business to manage their inventory, Sales, Purchases, and warehouses. ZapERP Integartes with Shopify, Amazon, eBay, WooCommerce, Magento, BigCommerce, Etsy, and Flipkart. Push all the invoices and Bills to your accounting software like Xero QuickBooks automatically using ZapERP.
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ERP system (or enterprise resource planning software) helps to manage all business processes more effectively in each department of the enterprise: accounting, HR, supply chain management, business intelligence, etc. ERP systems allow to bring transparency to all enterprise activities and integrate all processes into a single system.
What is an ERP system
ERP system is a central data hub that automates all business processes of an enterprise. Each enterprise has many departments with their own business processes and their own database. With the help of the ERP system, you can manage all processes more efficiently and establish communication between all departments.
Accounting & Finance is the most important module in ERP software. Every business sells something and buys something. In this module, you can maintain complete financial and accounting records. You have clear reporting on all income and outcome of the enterprise. Spreadsheet nightmare will change to a structured database that is transparent to the management team, employees, and tax auditors.
HR (Human Resources) - every company has employees. The larger the enterprise, the more difficult it is to keep records. In this module, you can manage department structures, payroll, vacation planning, hiring information. Also, this module has the ability to sync directly with financial and accounting tools so that the company has a clear idea of how human resources directly affect the financial condition of the entire company.
CRM system (Customer relationship management) - helps to organize the entire sales process. There are many other tools in the sales department, and often a CRM system is a separate tool. Almost all ERP systems have modules for automating sales reps.
Marketing automation - there is such a module in ERP systems that are developed for the eCommerce market. Like CRM systems, marketing automation software in most cases is used as a separate tool. This module may include sending email companies, SMS, and push notifications.
Supply chain management - many companies are engaged in manufacturing. In the beginning, they need to purchase raw materials, some elements, and only then they create products. For example, Apple. Before their iPhones hit the shelves, they have to buy chips from Intel, then buy aluminum in Africa, then do a million more actions, and only then all the elements are assembled in factories in China. After that, the products go to different distributors in different countries. Special tools are needed to manage these processes effectively.
Inventory and procurement management - helps to manage warehouses and products. The company uses a different number of warehouses in different seasons. Different seasons, different products. This module allows companies to keep the number of products they need in warehouses and not spend extra money on providing them. Also, this module helps to predict the occupancy of warehouses during peak loads.
Order processing - allows you to accept payments, integrate with the payment gateway, and fully automate POS (point of sales). Each product has labeling, bar codes, etc. This module allows you to manage this business process in the enterprise.
Products - many enterprises have a large product line. Sometimes it is hundreds of thousands of products. This module allows you to understand which products are sold better and which ones are worse, what is the revenue. Which products are available now, which are not.
BI (business intelligence) allows you to make various reports by period and make business decisions based on the data. BI allows you to be a data-driven company. Since the ERP system is the central data hub, you have the opportunity to look at the performance from different angles. For example, what were the sales of Product # 3 in the third quarter of 2015, 2020, and 2022? How the hiring of 38 new employees affected the performance of the company? There is a separate BI software that can do this kind of reporting. But they need to get the data from the ERP system.
Operations - allows you to establish communication between employees. Send them emails, messages, manage projects. Everything related to operational tasks you can do in this module.
All-in-one & niche products approach
There are different approaches to automating an enterprise. Large ERP systems for large enterprises offer an All-in-one solution. Most of the business processes of an enterprise can be solved with one system. This solution looks like a “Swiss knife”. Another approach is niche software. Let's say you have a sales process or a process for accepting payments in an offline store. For these processes, there are separate categories of software that are designed exclusively for this process. With a new approach, you are like a “chef” who combines the ingredients for your dish.
Historically, larger ERP vendors have been around since the dawn of the computing era. At that time, there were no solutions, and clients started using accounting software, and then they said: "Can you still develop Inventory management software for us?" Also, large vendors absorbed smaller ones bought them, and developed their ecosystem. Thus, the functionality of ERP systems grew like a snowball.
In the 2000s, the era of cloud SaaS services (Soft as a service) began. Niche players like Dropbox, Slack, Trello, and others began to emerge. Ipaas software like Apiway began to develop and made possible integration and data transfer.
Pros of All-in-one software
- Easier to choose.
- You chose once and solve the problem.
- All data is in one place.
- It looks like clay. You can modify and sculpt whatever you want.
Cons of All-in-one software
- They're expensive.
- Have no flexibility with ready-made functions.
- Have no deep study of niche functionality.
- It takes a lot of money for revision.
- You can choose, implement and only then understand that this software doesn't suit you.
- Requires long implementation.
- Have bulky interfaces.
- You need consultants.
- It’s difficult to change for another.
Pros of niche vendors
- Have more functionality.
- Have functional flexibility.
- They’re cheaper.
- Quick implementation.
- You can do it without consultants.
- It’s easy to change to another if this one doesn’t suit.
Cons of niche vendors
- They’re harder to choose.
- It’s difficult to understand the general picture of what software are needed.
- Data is stored in different places.
- Integration needs to be done.
- It’s difficult to refine.
Benefits of ERP software
- Increasing of productivity
- Process automation
- Transparency in enterprise management
- Deep insights
- Reduction of accounts receivable
- Speeding up order processing
- Reducing operating and administrative costs
- Acceleration of receiving management reports
Business sizes using ERP software
SMB. Previously, ERP systems were available only for enterprises. ERP systems today are available to SMB and help to move from spreadsheets to better management of every process.
Midmarket. In this segment of companies, there are niche ERP systems that are tailored for a specific industry.
Enterprise. For large international corporations, systems of the “All in one” type are presented with flexible modifications according to the specific needs of the corporation.
What’s the difference between on-premise and cloud ERP software?
Today more and more software is becoming cloud-based. This is a clear trend of the 21st century. You can get data from the cloud. This is a cheaper but less flexible method. Many companies want to store data on their servers and have complete control over all processes. There can be many reasonsб from government legislation to the fears of decision-makers.
Pros of on-premise software
- 100% control over your data.
- Flexible customization.
Cons of on-premise software
- This method is becoming outdated and few people want to make integrations with on-premise software.
- You need to pay the full amount for the license at once.
- The server needs to be maintained.
- You need to pay specialists for installing, configuring, and maintaining servers.
- It takes a very long time to implement.
- It is necessary to have a server room for servicing the servers.
Pros of Cloud Software
- It’s cheaper.
- Has quick implementation.
- Is served by fewer people.
- Is easier to update.
- There’s no need to spend money on server maintenance.
Cons of Cloud Software
- Your data is stored on the servers of another company.
- It’s harder to customize the system.
Some signs you’re ready for the ERP system
In most cases, companies start using spreadsheets as the first step in automating the process. Up to this point, all business data was in notebooks or people's heads. Spreadsheets are the first step in structuring business processes. Then the companies start to implement simple accounting software. But at some point, the company needs more flexible reports and additional functions. They start to implement ERP systems. Below are the signs that will show you that you are ready to implement ERP software.
You spend a lot of time in a routine
You spend more time filling out and managing the spreadsheets than actually working. You copy data from one software to another. It takes a lot of time to keep the information up to date.
You grew out of simple software
You are getting cramped in your software that you are using now. You have thoughts in your head, "It would be great if it’s possible to do this." You are missing functionality. In parallel with specialized software, you keep filling spreadsheets with other information.
Collecting information takes a long time
Good management decisions require solid, timely, visually beautiful data. If you spend a lot of time collecting and visualizing data, you need to implement an ERP system.
You can't get the data you want
The quality and quantity of data directly affect the quality of management decisions. Sometimes you need to know “how product A's sales differed from product B's in 2015 and 2016”. If you don't have these data, your car drives without a speedometer.
You do many tasks manually
If your company still has a lot of paperwork, monkey work, then this greatly slows down efficiency. The exchange of information is like blood flowing through the body. If there are plugs somewhere, it has a detrimental effect on the whole body. An ERP system will allow you to eliminate manual work and automate many business processes.
Market Trends in ERP Systems
Active development in SMB. Previously ERP systems were available only for large corporations. It required dozens of developers, and cost hundreds of thousands of dollars. Today cloud ERP systems are available for the smallest companies with 2-3 employees.
No-code software. With the development of SaaS and API, the software can transfer data to each other. Also, with the advent of the node interface (Visual programming), people no longer need to be able to program to customize business processes. Every employee using video tutorials can create their own business processes. You no longer need to involve programmers in this work.
Niche software. The market for ERP systems gets saturated and it is difficult for vendors to compete with each other. Everyone is trying to find a niche. Someone specializes in manufacturing enterprises, someone in e-commerce, someone in Retail, someone in the construction industry. There is a clear trend towards specialization.
Mobile-friendly. Smartphones have changed our lives. Today, company employees want to have access to data from their smartphones, anywhere around the world. ERP systems are forced to modernize interfaces and create good UX/UI for mobile devices.
ERP Implementation Stages
Evaluating time-consuming processes
Treat what hurts. You don't need to fix a thing that didn't break. The task of the implementation manager is to interview employees about what they want to automate first. Most likely, the employees of the company have already told their superiors “It would be great to do this”. You need to understand what monotonous, manual work employees spend time on.
Write down in the sheet how many hours employees spend on different tasks. At the end of the implementation, you will be able to say that now they don’t waste time on this task, or at least spend less time.
Write down ideal business processes
After analyzing the weaknesses of the enterprise, the business process architect should develop a project for the Ideal Business Process Map. Here you need to turn on your imagination and come up with an ideal world. Then discuss it with employees who really spend time on these processes. The creation of the process must take place side by side with the people who will carry out and supervise it.
Analysis of other companies, competitors
When you have a sketch of your processes, you can look at projects already implemented in other companies or at your competitors. You should know “how it works for others”. This is very important because if you have no experience, you can come up with a bicycle. It happens that companies order a million-dollar software development while this problem can be solved with a ready-made solution for $200/month. You need to study cases and best practices.
Knowledge gives imagination. After studying, you can get the right insights that can change your mind. The problem is that very often companies first implement an ERP system, and only then from others, they see what could be done differently and better. And they begin to redo everything. Study first, then invent.
Formation of specifications
When you analyze all the best practices and cases, you will have an understanding of what you need. At this stage, you can hire consultants who can also tell you how to do better. With an understanding of what you need, you can begin to formulate the technical specifications for the vendor. You should describe your ideal solution point by point. Performers will think about what software and what additional tools are needed to fulfill your dream, your project.
Selection of ERP system
When you already have specifications, you can start a dialogue with vendors. The process will go much faster. This can bring transparency to the processes. Without specifications, you risk buying a well-known brand that doesn't suit you, but you will realize it in a few years.
Making a decision in which department should be the first implementation
When you have decided on the ERP system, you need to decide in which department to implement it. Understand where is the most painful point in your company, on what routine processes do you waste the most time? In which department does your company make more money?
Selection of a group of volunteers
After you understand in which department the implementation will take place, you need to assemble a group of volunteers. Basically, people don't like innovations. Innovators are only 5-10% of them. There are always skeptics and optimists at the enterprise. Your task is to gather optimists into a group and achieve results. It is a big mistake to make an introduction to the entire department at once. You may fail and the skeptics will say “I told you it was a bad idea” and convince everyone else who hesitated. Your task is to find pioneers who are self-motivated and self-directed, ready for an interesting but risky adventure.
After you have formed a group of volunteers, you need to implement a small part and get a positive result. People need to understand that it is better with an ERP system than without it. Nothing inspires people better than victory. They begin to realize that they are special and they can achieve positive results. A small victory is very important.
Implementation across the entire department
Having received a small victory, you get a digitized result that is difficult to argue with. It is best to present it in the past/present format. This line of reasoning will keep skeptics from arguing and making up “Why it won't work” stories. The numbers speak for themselves. It is very difficult to argue with them. At this point, skeptics will join the new movement, since they have no choice. The minority becomes the majority and the ERP system will be implemented in the department.
Repeat implementation in all departments
Exactly the same strategy should be used to implement ERP software in other departments, referring to the results. The key task is to ensure that one department begins to completely use the system.
Potential problems during the implementation of ERP system
In most cases, ERP systems are used in large enterprises. The sales process can take months. Big companies buy well-known vendors. A well-known vendor is not always what you need. Everybody knows the parable “Nobody gets fired for buying IBM”. When purchasing an ERP, you need to look at the functions of the system, and not at the vendor brand.
This is a classic problem in large enterprises. Purchasing decisions aren't made by those who will use the ERP system every day. Managers can buy what is convenient and understandable for them, while ordinary employees can suffer and use software that was relevant 20 years ago. Be sure to talk about all the details with the people who will use this product every day.
People don't like new things. It's hard for them to get used to new technologies. This is especially true in large corporations. When introducing an innovation, you will always hear objections from employees. This is okay. Your task is to find enthusiasts, implement a pilot project, get a result, and go arguing with the result obtained, prove to the whole company that this technology really helps to improve work efficiency.
Systems must be flexible, they must be able to be modified, they must have an open API. You can buy software with a beautiful interface, at the beginning it works well, but at some stage, you don’t have enough functionality, you want to modify it, but the system doesn’t allow it. It's like small shoes that are too tight for you. Imagine you have implemented a system, taught 1000 people how to use it, and now you need to change it again and teach everyone one more time.
It’s better to implement the system in different departments. Also, you cannot implement it at once for all employees in the department. The worst thing is when you are faced with implementation problems and employees don't want to be part of this process. In their hearts, they are happy that the implementation didn't work out.
How to measure the implementation efficiency
There are two ways to measure efficiency. The first is to get an answer to the financial question: “How much money have we earned/saved in the department after the implementation of the ERP system?”
The second question is not about money, but about the time spent: “How many man-hours have we saved after implementing the ERP system in this department?”