Is your HR department more disorganized than a 19-year old college student too busy playing God of War to care about his homework? Don't know whether the holiday hours, work schedules or pension benefits are in effect? It might be time to fully automate your business with an enterprise resource planning (ERP) system!
ERP systems can work with all facets of your business to make sure that your business processes are smooth and in tip-top shape.
So what exactly IS ERP?
ERP takes all of the management information, both external and internal and integrates it through the entire organization, including the finance department, the customer service department, the marketing and tech support department, the manufacturing department and the sales and service departments. Putting all this information into a big database, ERP can help any industry
ERP Systems, generally speaking, have four main features:
- An integrated system that does not require upgrades, because it's constantly being updated in real- time (or close to real-time).
- A database, common to all departments, that can effectively run all the applications needed.
- A look and feel that is consistent for all the modules used.
- The system can be installed without comprehensive application installing or data integration by the IT department.
What components of HR can be helped by ERP?
Practically all of them! HR's job is made that much easier since an ERP system can:
- Ensure all payroll is accurately put into the system.
- Ensure that employees are properly trained.
- Ensure all benefits are accrued properly.
- Enable the HR Manager to see that the 401(k) balances are applied to the correct employees.
- Show who was recently hired and the proper pay rate to give to him or her.
- Keep Diversity Management up-to-date . This ensures that departments are diverse enough to allow inputs and outputs from people from multiple backgrounds.
What are the specific components of an ERP system?
ERP systems generally consist of features such as: Customized Reporting, Workflow Management Internet access (for the purpose of gaining information and document management).
Some people are talking about "Best Practices". Should I be concerned?
Best Practices are the software's way of agreeing with the vendor's ideologies on how to run the company's business processes effectively. As such, complying with these regulations actually becomes easier when an ERP system is implemented. If your company does electronic funds transferring, such as through Paypal, ERP systems actually help facilitate that because they can effectively be coded into the system and be shared among multiple businesses.
Does ERP take a long time to implement?
Yes, but it's worth it. The average amount of time for a business is 14 months and requires 150 consultants. Because of the fact that ERP requires multiple and considerable changes to all the policies and practices, ERP services consist of three different items: Customization, Consulting and Support. Your actual implementation time will vary based on a number of factors, including but not limited to: The size of the business, the willingness of the employees to accept the change and exactly how expansive the scope of changing is. Small companies could see this program done in a month or two, whereas large and multi-national corporations could take as long as a decade.
Does ERP only help the HR Department?
Not at all. ERP is a total overhaul of the way the entire business is run and with information available to all the networks of the organization, you can easily see all facets of business, from accounting all the way up to upper management, being run quicker and more efficiently.
In sum, ERP is a comprehensive modernization of the way the business is run. Any department, from HR to Sales, can see prospective benefits in the long run with some short-term sacrifices. ERP is a good idea for a business that wants to see items ship faster, employees working more effectively and inventory being better accounted for.
This is a guest post by Steve, a recent graduate student living in California who has an expansive background in accounting. He has worked for multi-state companies which have implemented ERP from JD Edwards managed services where he had the opportunity to speak to several consultants about how ERP implementation can be done in a way that accommodates both the business and its employees.
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Nor Franco