An integrated ERP system ís an essential contributor to the success of a company. It promotes transparency and process reliability in a company and reduces the proneness to errors significantly. A survey conducted by Industrial Application Software GmbH shows that more than 85 per cent of the medium-sized companies questioned are completely convinced of the potential for increased efficiency offered by a uniform company software.
In medium-sized companies a lot depends on the quality and performance of the software used. Its performance capability is a fundamental element for the success of the company and its positioning in regards to the competitors. With the software being able to support processes in many different business areas, the likelihood of being able to achieve company-wide efficiency and transparency in business transactions increases. If achieved this often results in a sustainable competitive advantage. Many medium-sized companies seem to be aware of this, as a six month survey by Industrial Application Software GmbH shows. The survey was conducted at 577 medium-range companies from Germany and showed that 85.6 per cent of those questioned evaluated the potential of an integrated and uniformly used system very highly.
High functionality of all-in-one solutions
The approach to include everything in one software programme represents the highest degree of integration. Many ERP solutions, such as for example Canias ERP, in the meantime have a module portfolio which goes far beyond the classic functional areas of ERP. In addition to the classic functional areas such as material requirement planning and purchasing they include for example CRM, quality assurance as well as document or project management. Since such components are of course not part of core competencies of an ERP software, special cases and industry-specific characteristics are not necessarily included, as is the case in a specialized software. Nevertheless additional software functionalities increase the comfort for the users and increase the utilization for the company.
Balancing act between the systems
Changes in the systems as often result from individual, historically grown PPS or warehouse management systems are usually connected to risks which endanger an efficient way of working. For one there might be different requirements for the hardware, operating system, database, software etc. which might be hardly compatible. Here companies often have to manage a difficult balancing act which leads to an additional financial strain sooner or later. Secondly such isolated solutions necessitate the use of interfaces which must be managed and updated – again resulting in more effort. They are often prone to errors and occurring problems are hard to locate. If the error can’t be easily reproduced or assigned there is the additional risk that the firm ends up being stuck in the middle.
One system, many advantages
Compared with that a completely integrated system creates many advantages in the company’s practice. The following 10 reasons show what potentials for efficiency a uniform software brings:
1. Uniform data pool:
The users work in only one system. Accessing several isolated systems is not necessary to get a current overview and/or to carry out activities. Therefore the risk of “working parallel” where no department knows what the other is doing is a lot lower. Apart from that the data is much more transparent and their plausibility can more easily be corroborated
2. Centralised data storage:
Having all available information at only one location saves on computer storage space (and costs). Additionally the multiple upkeep of data, when these are newly created, changed or deleted is avoided. This reduces the proneness to errors and leads to a higher data consistency.
3. Data in real time:
Interfaces always lead to a time lag. Therefore a situation can have changed during the transfer from one system to the other without the user noticing. Working in a uniform solution with real time date minimises this risk.
4. Integrated view to the entire process:
At any time every process participant can see which part of the process is currently being worked on or which activities are currently being conducted. Interdependencies are also a lot more transparent so that the possible consequences of measures can be better estimated.
5. Easier analysis:
An integrated solution allows faster statements to current numbers and developments. For example all preparation activities necessary to make the data comparable between systems (for example when using different material numbers) are omitted. It is also no longer necessary to elaborately „glue together“ an analysis through various applications. Critical processes can therefore be identified far earlier and necessary counter measures can be taken.
6. Focused user skills:
Users of a standardised software do not need to master several systems. This reduces the orientation and training effort and enable a more in depth know-how of the application used.
7. Efficient administration:
System administrators only have to manage one system. This significantly eases the maintenance, upkeep, troubleshooting and reduces the time required.
8. Release ability:
In the case of a software update in a heterogeneous IT landscape it must always be checked whether it can lead to conflicts with other systems in use. Possibly interfaces have to be newly configured and implemented. Also updates naturally happen quite often. This too repeatedly ties up resources which are then not available for the usual operations.
9. Unambiguous contact person:
In the case of errors and when questions arise from usual operations the person to contact is clearly defined. This promotes a quick and problem-related troubleshooting.
10. Cost savings:
Depending on the software used it might be possible to achieve a reduction of maintenance and licencing costs in addition to the lower effort necessary for the upkeep and administration, since these only occur for one system. For the same reason one can expect lower adjustment and upgrade costs for an integrated solution.
Of course the companies have to check and decide in their specific cases whether all their requirements can be met in one centralised ERP system with justifiable efforts or whether an additional system should be introduced. However this means both the administration and the upkeep as well as the ability to analyse the system landscape more elaborate. Experience show that chaotic isolated solutions in the end lead to wastage and make an efficient handling of company processes more difficult. In contrast an integrated system supports the transparency and stability of the business processes and provides a significantly better basis for the controlling of the company. Especially for SMEs which do not have access to so many resources a quick and simple data upkeep, data analysis and reaction is elementary. This is very well supported by a uniform data pool without any error prone and time lag causing interfaces. Therefore ideally to do without a heterogeneous system landscape and keep the number of systems, and therefore interfaces, to a minimum.
Authors: Holger Rau (Senior Consultant) and Anna Seel (PR-Manager) at Industrial Application Software GmbH