Expanding your business is an exciting development. Exploring the potential of your business through new software options is a big part of this process, and no less exciting! As we have discussed previously, business management software is a central part of any business and many do not realise the potential for growth by upgrading.
So, what does the next-level software offer and how can it help grow your business?
Greater depth and broader range of functionality
The next-level of business software offers much more than just the basic recording or bookkeeping functions that entry level software provides. They are designed so that the processes you need are part and parcel of the one system, so they offer a lot more functionality.
As an example, let’s look at what you might find from a procurement perspective:
Customer backorders – when no stock is available at the warehouse or other branches – need to be purchased or manufactured, as do job orders. Stock reorder reports can either raise a stock transfer request to the warehouse or feed into purchasing. In larger organisations purchases might come through a central purchasing department and require authorisation. After a purchase order is raised and goods are received, these may go back to the customer, the job, into stock, out to a store or consumed internally.
More tailored to your needs
Because the level of functionality is so much broader in an ERP system, it is important that this be aligned with your business processes. You don’t want users being overburdened and confused with information on screens that is not relevant to them.
For this reason most larger systems are broken into areas of functionality, often called business modules. You then only purchase or see the business modules you require to meet your company’s particular business processes. Even within business modules the operational side is normally quite configurable. For example, in a Sales Order processing environment: are quotes required? Do you pick goods off a picking slip or scan them? Once picked do you require a picking confirmation stage? Is there a separate delivery process before invoicing, possibly in round and drop order?
Whether it is Point of Sale feeding through right up to your General Ledger, or Jobs being put through to Purchase Requisitioning and Purchase Ordering – it’s all part and parcel of the one system and fully integrated. No more messy add-ons, which means no more compatibility or updating issues!
Using job costing as an example, here is a list of tasks you might do and the corresponding functional business areas that you might find in an ERP system:
|• Create a quote for a job||Job Quoting|
|• Schedule the job and required resources||Job Scheduling|
|• Raise a request for goods and services||Purchase Requisitions|
|• Purchase goods or services for a job||Purchase Ordering|
|• Requisition stock used on a job||Inventory|
|• Scan consumables for a job||Point of Sale|
|• Reserve materials for manufacturing||Bill of Materials|
|• Record employee time on a job||Time Clock and Payroll|
|• Enter subcontractor invoices||Suppliers|
|• Utilise resources from another branch||Multi Division/Branch|
|• Record depreciation expenses for a job||Fixed Assets|
|• Record work-in-progress figures||General Ledger|
|• Invoice the job to a customer||Customers|
|• Report the profit or loss for the job||Job Costing|
Designed for higher volumes and more users
When you have 20 or 30 users accessing a system at the same time they will be doing a myriad of different tasks, some of which will be overlapping. It’s import that systems are properly designed to handle this load. In general, any number of people should be able to access the same area and function at the same time, i.e. no lock-outs or loss of data or slowdown in performance.
More users generally come with higher volumes of data. The next level system is designed to handle these higher volumes. Whether it’s tens of thousands of stock items or hundreds of thousands of transactions the system, performance needs to keep up. This means greater efficiency and less frustrations for everyone involved.
Better security and auditing
Once your business starts to grow and you are employing more and more staff, much of the work you once did will be delegated. You may also have managers looking after key areas. Although this is critical for your business success, it needs to be done in a controlled way.
Larger systems allow you to limit what certain users or groups of users can and can’t do. For example, sales staff could access all the sales functions but are locked out of the General Ledger. They also have scaled levels of security, e.g. no access, enquiry only, modify, add and delete.
It also becomes too difficult to personally monitor the data. You need to know what is happening within your system and who is doing it. With better auditing and security inbuilt into the system, it decreases the possibility of something going wrong, and if it does it can be traced back to the source and resolved quickly.
Stronger and more detailed reporting
You want to be able to access the information in your system in better ways, for example see it graphically and produce and customise your own reports. Instead of having to export and manipulate data in spreadsheets, it is much better if you can get those reports directly from the source as an integrated part of the system. Not only will the figures be more reliable but it also means that anyone with access can produce them.
In larger organisations, you also need the ability to produce management reports, at a point in time, that once signed off on are not going to vary when run again in a few days, even if older transactions have since come in.
Consolidated multi-branch/multi-entity reporting
Not only do the next-level systems have the ability to include different stores and branches in the one system, but they can even include different entities within the one umbrella organisation. Your business might have separate retail and manufacturing areas, and they could possibly even have different ABNs. Being able to get consolidated reporting encompassing all aspects of your business is crucial and allows you to see the “big picture” – a capability only offered by the next-level systems.
Ability to grow with your business
This is the key thing you want your system to do for you. It can start off small and it can nurture you along the way but it can take you to where you want your business to go. If it only has a limited amount of functionality and scope, it’s not necessarily going to be able to grow with your business, causing major issues in the future.