Enterprise resource planning methods (aka ERP solutions) refers to software that large-scale businesses and conglomerates can use coordinate the day-to-day activities of different core functions. Indeed, these activities often refer to things like procurement, risk management, project management, accounting, marketing, human resources and supply chain management. The software can assist with budgeting, resource planning, predicting and reporting on crucial financial results.
Fundamentals of ERP solutions
The fundamentals of ERP solutions are designed around a particular, easily defined data schema, which typically has a shared database. The purpose of this is to normalise all data exchange, i.e. ensure the information that is shared is based on universal definitions. This also helps with developing cross-functional departments and work teams, which streamlines workflow, efficiency and business interconnectedness.
Its history and how it has evolved
While a lot of people view ERP solutions as a new age, 21st-century development, you’d be surprised to know that the origins of this technology can be traced back over 100 years. In 1913, an engineer by the name of Ford Whitman Harris created the economic order quantity (EOQ) system, which was a paper-based production scheduling metric.
The 1960s saw this process revitalised when mainframe computers were blended with the program, culminating in what is called material requirements planning. MRP was the conventional planning method for close to 40 years. It provided a compelling vision on how businesses could seamlessly coordinate their core functions while reducing inventory costs, minimising wastes and pollution, and boost overall operational efficiency. When the 1990s finally arrived, material requirements planning had been superseded by ERP solutions, as real-time, ground-breaking tech was amalgamated with business management software.
What’s different about modern ERP solutions?
When enterprise resource planning first arrived on the scene, the software used was on-premises, in the sense that big machines in a large server room held all the data and allowed the system to be operational. However, as adoption rates proliferated, establishment costs began to rise as well, causing massive headaches for clients who wanted to customise their cloud management protocols to fit their specific needs and wants. Enter – the cloud.
Software as a Service (SaaS)
The mainstream delivery method of ERP solutions is now SaaS (i.e. cloud-based). Instead of the software running off in-house servers, it now runs off a network of remote servers. Basically, the cloud provider manages and updates the software several times per annum, which minimises costs, disruptions to workflow and other unnecessary obstacles. It also means that businesses don’t need to hire additional IT staff throughout the year.
Why you should use cloud-based software
There are many great reasons you should use cloud-based management systems to run your business. Firstly, SaaS ERP solutions ensure that your software is up-to-date in terms of the latest features and best industry practices.
Moreover, it means you get access to all the new, emerging technologies, like AI assistants, blockchain, augmented reality and machine learning options. Integrated management systems can assist with the automation of processes that usually require intensive manual intervention, like reconciling financial statements and accounts. In the digital age, cloud-based software systems allow for real-time monitoring and engagement, ranging from front office work to warehousing activities, like specific tasks on the factory floor.
Some last-minute tips
When choosing a cloud provider for your ERP solutions, make sure you choose an organisation that you trust and respect. They’ll have access to a lot of your professional data, which could be sensitive in nature. The last thing you want is to be worried about data breaches or security infringements. So, stick with a company you can rely on and enjoy the benefits of cloud-based innovations!