ERP Industry Categories: A Look at Who Benefits Most
There’s a board game from the ’90s in which players advance by guessing the commonality between three seemingly disparate things – a shark, a saw and a gear, for example (answer: they all have teeth). If you were playing the business edition of this game, you might be asked to guess the common thread between a home builder, a toy distributor and an eCommerce platform that sells handmade scarves. At first glance, these three businesses don’t seem to have much in common. But the one quality linking them is they’re all enterprise resource planning (ERP) industry categories.
In this post, we’ll discuss the merits of ERP for companies in specific industries — and, in turn, why ERP implementation is such a competitive asset within these markets.
What Can an ERP System Do for Your Business?
No matter what your industry, every business has one thing in common: they all sell products or services. This means they all have customers and they all have money changing hands, which means they all need some way to keep track of this information.
For a small enterprise, something as simple as spreadsheets or an entry-level version of an accounting program like QuickBooks will do the trick. But if your company has multiple entities, dozens or even hundreds of customers, a sales team and a warehouse full of supplies and products, you’ll need a more substantial solution to prevent chaos from ensuing. You’ll need an ERP system, and here are some reasons why:
Single Source of Truth
Imagine this scenario: the sales team for your lumber distribution center just closed a major deal to supply building materials for an entire subdivision. The only problem? Because your sales team doesn’t have access to your company’s inventory management software, they’re unaware that a shipment has been delayed and your company has nowhere near enough materials on hand to fill the order.
An ERP system could have prevented this scenario, as such a solution provides a single source of truth for disparate data within your business. Customer relationship management connects to inventory management, for example, so that when a client informs a customer service representative that they’ve moved, their shipping address is automatically updated on their next order. Inventory management connects to sales so that sales team members aren’t taking orders for items you don’t have in stock. Financial management connects to billing so that payments are automatically recorded in the ledger.
Efficiency is another hallmark of ERP within all industries. When there is a single source of truth among all arms of a business, interconnected processes can be streamlined and automated. With an ERP system, you have the potential to automatically send a confirmation email when a customer places an order or automatically update that customer if their item is delayed or goes out of stock. You can automatically balance accounts when conducting inter-company billing and automatically update your books when an invoice is paid.
Enterprise-wide Financial Visibility
Especially crucial to a multi-entity enterprise is the ability to monitor financial data not only for the company as a whole but also for each subsidiary or branch location. This way, you’ll be able to create consolidated financial reports and compare entities’ KPIs on a side-by-side basis. Any ERP system should also come with or be able to integrate with business intelligence tools to create easy-to-understand data visualizations that will help your team make better decisions.
What Can an ERP System Do for Your Industry?
It’s more important that your chosen ERP system has the functionality your individual business requires than that it’s advertised toward a particular industry. That being said, the right ERP system can benefit specific industries in specific ways:
eCommerce is an industry where connection matters. Just as a web store seeks to connect with customers, the right ERP solution will connect the storefront with a flexible back-office system that provides both customer and business with a seamless experience. It starts the moment a customer places an order and doesn’t end until their invoice is paid, their purchase recorded in the financial management system, and the company’s inventory updated.
By using an ERP system to optimize and automate sales orders, inventory management and cross-company transactions, you can save time, minimize costs and reduce errors. With the right solution, you’ll control costs, reduce order times and improve customer satisfaction across the entire supply and distribution chain.
The ideal ERP system for the manufacturing industry will have functionality for different types of manufacturing, including make-to-stock, make-to-order and batch. By utilizing ERP to track costs, schedule orders for the shop floor, manage purchase orders and more, you can ensure your orders are on-time and on-budget.
Metal fabrication is a niche industry that may require a unique ERP system, specifically one that offers multi-currency accounting, as fabrication orders may come from around the globe. Operating on tight budgets, it’s especially important that estimates and cost tracking be accurate, so robust job costing capabilities are also a must.
Most activity in the construction industry doesn’t take place within the walls of an office. A cloud-based ERP system enables managers to access important project details in real time no matter where they are, to optimize productivity with workflows and to easily manage commitments such as subcontractors and purchase orders.
Don’t Just Take Our Word for It
It’s easy to see how, in theory, an ERP system can be a game-changer. But the case for ERP becomes even stronger when talking about real businesses across a variety of industries that have achieved real results:
- After implementing Acumatica, manufacturer Firewire Surfboards gained real-time visibility across all five of its global operating entities and recouped hours each month that were previously spent manually compiling financial and operational reports.
- Manufacturer Green Bay Packaging‘s use of Acumatica Financial Management saved their accounting team time compiling reports. It also enabled the company to better serve customers because of increased visibility between their box plant and their paper mill.
- eCommerce/distribution business Dairy Connection, Inc., a dairy ingredient supplier, integrated their existing ERP with Acumatica partner BigCommerce to automate their ordering process. The move cut down on errors stemming from manual order entry and gave employees more time to engage with customers.
Crestwood Associates has assisted in more than 5,000 ERP implementations, ranging the gamut of industries. As an Acumatica partner, we can help you find the ERP most beneficial for your particular industry and tailor it to meet your individual company’s unique needs. No matter your industry, your ERP system needs to be of the highest quality, and you need a top-notch partner to support you every step of the way. Our experts at Crestwood will make sure you have both.
Request a consultation today to find out how Crestwood Associates can help you optimize your enterprise.