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The enterprise resource planning (ERP) software market is large and complex. There are hundreds of vendors offering best-of-breed (i.e. stand alone) ERP applications or integrated ERP software suites. Additionally, many ERP software companies offer vertical market solutions to meet the unique requirements of specific industries, such as manufacturing, distribution, retail and others. We wrote this buyer’s guide to help organizations better understand how to select the best ERP software to suite their business needs.
Here’s what we’ll cover:
An enterprise resource planning system helps organizations track information across all departments and business functions, from accounting to human resources to sales and beyond. The term took root in the US around 1990 as a growing number of organizations required integration outside of - but not exclusive of - their manufacturing applications. They needed to share data from their MRP system with say, their financial accounting, customer relationship, supply chain or other applications. Enterprise planning software was introduced to describe a broader system that integrated each of these applications. The top ERP software packages will cover the following application categories.
|Accounting||Accounting systems help organizations manage their financial transactions. At its core, it will have a general ledger, accounts receivable, accounts payable, and payroll. Vendors often develop additional features and functionality to meet unique business and industry needs (e.g. Sage Nonprofit with fund accounting). Example vendors include Sage accounting software and Microsoft Dynamics.|
|Business Intelligence||Business intelligence, as a term, gained widespread adoption in the late 90’s. However, the technology has existed in some shape or form since the 60’s. It is used to analyze and report business data to help companies make smarter business decisions. Core functions include analytics, data mining, reporting, and more. An example vendor is SAP.|
|Customer Relationship Management||A CRM application is used to manage interactions with prospects, customers, clients, and/or partners. It tracks activity across all departments: marketing, sales and service. Core applications closely align with these departments. They include sales force automation, marketing automation, and service and support. CRM aims to increase customers, revenue, and customer satisfaction. An example vendors is Oracle.|
|Human Resources||Modern HR systems help organizations manage traditional HR activities such as personnel tracking and benefits administration, as well as new strategic HR initiatives like talent management, employee evaluation, and learning management. Example vendors include Epicor and Lawson software.|
|Inventory Management||An inventory management program helps companies track up-to-date information about their product supply. Its aim is to maintain optimum stock levels so that companies avoid depreciation of inventory and overspending, and ultimately maximize profits. There are different types of inventory programs to meet the unique requirements of different industries and companies. For example, a food distributor will have different inventory management needs than say, an apparel retailer. Sample products include MAS 90 and 200 Software.|
|Manufacturing||We wouldn’t have enterprise resource software if it wasn’t for manufacturing resource planning software. Today, it’s at the core of many well-known ERP systems. Other manufacturing applications and/or modules include manufacturing execution systems (MES), bill of materials (BOM), product lifecycle management and more. Example vendors include NetSuite, Infor and Sage.|
|Supply Chain Management||The supply chain management (SCM) application tracks goods as they move from manufacturing facilities to distribution centers to retail stores. Common applications include: supply chain planning to adjust inventory as demand changes; supplier management to monitor performance of suppliers; warehouse management to track placement of goods within a warehouse, and others.|
Before evaluating options and performing an ERP software comparison, you’ll need to determine what type of buyer you are. Over 90% of buyers fall into one of these three groups:
There are several trends playing out in the market. ERP software vendors are consolidating, adoption of SaaS is growing, and more. Here we’ll highlight a few you should know about.