An enterprise resource planning system (ERP) is a large integrated computer system a company will implement to help run business operations. ERP best practices are the specific rules or guidelines — whether formal or informal — business owners and managers will allow to dictate the ERP process. Companies may define their organization’s best practices in the business mission or corporate governance. These practices are seen as consistently better than others and have much better results when applied to the company’s tasks and activities.
While larger companies are often the primary users of ERP systems, the decreasing cost of business technology allows companies of all sizes to benefit from this system. Among the most common ERP best practices is the implementation of technology into all aspects of a company. Technology allows companies to gather data and information from internal and external sources, which allows business owners and managers the best information when making business decisions. Companies should not fear technology, as it often allows them to create more effective and efficient business processes.
ERP implementation can be a somewhat difficult process, depending on a company’s size and scope of operations. ERP best practices begin by creating an implementation plan to place the technological components into all aspects of the company. Because an ERP system will most often replace a previous computer application or system, a changeover can certainly make it difficult to continue operations without causing major disruptions. Companies may use a change management team to work through this process. This team will focus solely on implementation and then work on enhancing operations once it is installed.
ERP systems offer companies the ability to customize the individual modules or applications of the software package. Modules may include shipping, purchasing, accounting and finance, information technology, and sales and marketing, among others. Rather than using the standard cookie cutter ERP version, companies should customize the system as much as possible. Customization allows companies to develop a competitive advantage through business technology. Essentially, using ERP best practices can lead to the development of standard operations or processes not easily replicated by competitors, even though the company uses a standard ERP system.
Training employees is another aspect of ERP best practices. While it may be difficult to believe, there are individuals in the business environment who do not or cannot operate business technology items. Business owners and managers must take the time to train employees on how to use the system in order to maximize the benefits it offers to the company. Training employees will also lead to more skilled workers in the company, furthering the competitive advantage of the company.
