What is an ERP (Enterprise Resource Planning) System?
If you don’t work in software sales, knowing the difference between the host of acronyms floating around the internet can be tough, especially if you are just trying to understand the systems that help keep your organization running smoothly.
However, it is key for you to understand what an enterprise resource planning (ERP) system is in order to know what areas you have covered and what you may need additional systems or integrations for - like maintenance management.
At Prometheus Group, we provide integrations to a business's ERP system to make maintenance easier. Oftentimes, because an ERP system covers so many different facets of the business, the maintenance aspects become neglected and "work arounds" like external spreadsheets are leveraged to fill in the gaps.
In our blog, we will cover all you need to know about ERP systems so that you can better understand what they are and how to identify gaps in your current processes. Especially in the asset maintenance space.
What Is an Enterprise Resource Planning (ERP) System?
An enterprise resource planning (ERP) system is a holistic system that allows you to manage all functions of your business in one spot. This is usually achieved through one database with multiple business modules.
The benefit of using a single ERP system to manage all aspects of your company is that when it comes time to track what you have sold, production, sales, and accounting are all tied into one. And those are just a few of the things that an ERP system does.
By having your business processes centrally located in one database, information is recorded, communicated, and managed with as little manual effort as possible. This dramatically streamlines your workflows so that folks spend less time manipulating data and more time on value-add activities that cannot be automated.
What Does an ERP system Do?
We’ve alluded to it a bit, but you’re probably still wondering “what functions does an ERP system manage?”
ERP systems generally handle a multitude of tasks, such as:
- Sales management
- Accounting management
- Production management
- Enterprise asset management
- Supply chain management
- Procurement and purchasing
- Customer service management
- Human resources management
- Employee and contractor management
- Inventory management
- Reporting and analytics
Among this list, you’ve probably begun identifying tasks from it that your company manages on a daily basis.
A solid ERP system is one that allows each of your departments to efficiently communicate information and easily perform their day-to-day functions within it. No ERP system is perfect and as we referenced earlier, sometimes their maintenance management capabilities are less built out than other modules.
What Is an Example of an ERP System?
The most common ERP systems you will hear of are SAP ERP and Oracle Fusion Cloud ERP. Those are the large ERPs in the enterprise asset management space.
However, there are other ERP systems that asset intensive industries may use, like:
The enterprise resource planning system a company chooses to use will usually depend on their industry and their unique needs.
Are There Different Types of ERP Systems?
When it comes to selecting an ERP system, companies will usually have the option between the following types of ERP systems:
Each of these options varies slightly from the other. On-premise hosting involves the setup and maintenance of servers on location by an organization's IT professionals.
Cloud ERP solutions are managed by a hosting provider, like Amazon Web Services or Microsoft Azure. These providers maintain servers in various data centers across the country in specialized facilities.
Cloud hosting provides a myriad of benefits such as guaranteed uptime, automated fail over and trailing backups. This ensures your critical systems are up and running at all times and your data is preserved in the event of local mishaps.
Hybrid ERP systems contain elements of both on-premises and cloud solutions. This will generally include an on-premises ERP system for certain business functions (accounting, production, etc.), with cloud ERP solutions to support additional business units (like sales).
Is an ERP System the Same as a CMMS?
ERP systems and a CMMS (Computerized Maintenance Management System) can provide similar capabilities but differ in their purpose. ERP systems are designed to help organizations manage a variety of enterprise functions as we listed above, including asset management.
A CMMS is focused on maintenance operations and is built to help organizations improve asset lifespan and reliability. Some organizations may use a CMMS instead of an ERP to manage their assets.
In other cases, a company may use a CMMS system (to manage maintenance) and an ERP system (to manage other business functions) and integrate them with one another. Other companies may use a core ERP system and establish integrations to make managing maintenance activities like maintenance planning and scheduling, permitting and safety, or capital projects easier.
What Size Companies Need ERP Systems?
Any size business can use an ERP system. Although, many businesses will attempt to operate without utilizing an ERP system by using siloed systems. These can range from pen and paper to Microsoft Excel, to more advanced home-grown developments. These systems often lack integration to the rest of an organization’s software landscape.
If a business is able to get all of their products delivered to customers on time, always reach production goals, and have a handle on asset management operating without an ERP, they may be able to operate without one. However, it is very difficult for companies to scale and achieve perfect business performance without an ERP system.
Additionally, like any other system, having most of your business processes all in one place (in an ERP) will help you cut down on software costs of siloed systems and increase the efficiency and communications between different departments.
Select the Correct ERP System for Your Business
ERP systems are an invaluable tool to organizations. When you have the correct system and it is managed well, your business is able to run like a well-oiled machine.
However, if your ERP system is not helping you achieve all of your goals, you may need to consider integrations to extend or streamline the functionality of your ERP system.
If you have questions about getting integrations to add enterprise asset management functionalities to your ERP system, reach out to us today. If you would like to learn more about our maintenance integrations, check out our Prometheus Platform.