All in one System Manage Resources
easily with ERP

What is an ERP System?

An ERP system is used to plan, control and monitor the company’s resources as efficiently as possible.

The resources include:

• Materials, e.g. raw materials such as wood or steel
• Operating resources, e.g. machines, the vehicle fleet or software
• Financial resources or capital
• Employees (human capital)
• Knowledge (know-how)

You can use the company value chain as a rough guide:

All in one System

The ERP system integrates a

modular collection of business solutions and applications that work together seamlessly.

What does that mean?

Individual software components (modules) are available for all your department-specific requirements. As a modular system, the ERP system forms the interface between the different modules and ensures that they communicate and exchange data with each other without any problems. This offers your company decisive advantages.

ERP System: the 3 most important Advantages at a Glance

• Efficiency: Thanks to the common central database, your company’s business processes can be automated, structured and controlled more easily. Fewer errors occur and your wallet is spared. This has a positive effect on efficiency and ultimately contributes to the success of your company.

• Transparency: The ERP system brings all data and processes under one umbrella. The interfaces between the departments ensure a simpler exchange and flow of information and prevent your employees from not working hand in hand.

Scalability: Your company is growing? No problem - your ERP system grows with you! Even if you work with a much higher number of data records in the future, this will not affect the efficiency of your processes.

The History of ERP

The origins of ERP go back to materials management or material requirements planning in manufacturing companies in the 60s. The first predecessors of today’s ERP systems documented which goods were delivered to a company and which goods were dispatched or collected from there. This made it much easier to keep an overview of the movement of goods and to permanently compare the stock levels with production.

Production planning and management were then added in the 80s - until the first ERP systems (as we know them today) were developed in the 90s, which already contained integrated modules for sales, human resources and financial accounting.

Who needs an ERP System?

The ERP market has changed significantly since the 1990s, when it was almost exclusively large companies that worked with ERP systems - mainly due to the high initial investment involved. Smaller companies only had the option of using several separated solutions or documenting data manually.

Yet no company can work with individual Excel spreadsheets and index cards in the long term if it wants to remain successful.

Nowadays, the situation is different: ERP systems have also become an essential component for SMEs. And even for many small businesses, ERP is now an issue. On the one hand, because they basically have the same requirements as large companies - they also have to assert themselves against the competitors, be innovative and work economically at the same time. An ERP system is a valuable support that they should take advantage of.

And secondly, because thanks to digitalization, ERP systems no longer require such immense initial investments. For example, they can be financed on a monthly basis. There are usually various subscriptions - i.e. license models - which all offer different advantages depending on a company’s initial situation.

Continuous Innovation

ERP systems are constantly evolving. Today, regular updates and new versions ensure the continuous innovation of the systems. This is incredibly important, as the requirements of the market and customers are constantly changing.

Microsoft’s ERP Solution: Dynamics 365 Business Central

The ERP solution Dynamics 365 Business Central from the software group Microsoft is particularly suitable for small and medium-sized companies. The solution supports SMEs in particular in mastering their current challenges and at the same time accompanies them in their growth. The functionality of the software can be expanded with various additional modules.

Twice a year, Microsoft publishes new features and adaptations of the software with the so-called Release Waves. The global availability is also being pushed further and further: at the moment, there are 90 localized versions (as of October 2022) - with more already announced.

Only with a competent Partner

However, the best ERP software is of little use without a competent and experienced vendor at your side who has the necessary know-how. Certified Microsoft partners know Business Central like the back of their hand and will actively support you before, during and after the implementation of your ERP solution.

ERP Facts

So that you are prepared for working with your future vendor, we will clarify a few important terms relating to ERP below and show you where there is a risk of confusion.

What is the Difference between ERP and CRM?

Referring to ERP, the term CRM is often used. As the functionality of the two systems increasingly overlaps, there is often confusion as to what the fundamental difference is.

With a CRM system, the focus is on the processes that directly affect the customer, such as lead management, self-service support and functionalities for creating and processing offers. One example of a well-known CRM system is Microsoft Dynamics 365 CRM.

In contrast, ERP systems are primarily aimed at data and processes that run in the backend and are not directly addressed to the customer.

ERP System vs. Merchandise Management System

In practice, the term “ERP system” is often used synonymously with the term “merchandise management system”, although there is a fundamental difference between the two systems.

An ERP system only focuses on material and goods movements, while an ERP system includes all resources of a company - even those that are only indirectly involved in the manufacturing process in a production company, for example.

This means that an ERP system is only of interest to companies whose core business involves the production and/or sale of goods. Companies that require more digital functions should opt for an ERP system.

An ERP System contains more functions than an Merchandise Management System:

What are Requirements Specifications?

In requirements specifications, the customer documents all the information that is relevant for the company when selecting an ERP system and a corresponding vendor. It is a requirements analysis in which you determine what the (new) ERP system must be able to do. This information includes:

• Basic information: e.g. company size, locations or current IT infrastructure
• Functional requirements: e.g. detailed planning or warehouse management
• Non-functional requirements: e.g. mobile applicability or interfaces

As soon as you have completed your requirements specifications, the ERP selection can start. The requirements specifications are a great help here - provided you have worked carefully when creating it. 😉

What are Functional Specifications?

The ERP requirements specification is drawn up by the vendor you have selected. It specifies how he intends to implement the requirements of the customer’s specifications. from the specifications. In contrast to the requirements specifications, the functional specifications represent a legal obligation. Changes can only be made after signing by amending the contract.

At the end of the project, the two contracting parties use the functional specifications to check whether all the requirements listed have been fulfilled as agreed.

In a Nutshell: what is the Difference between the Requirements Specifications and the Functional Specifications?

Both documents contain requirements and expectations of an ERP solution. The functional specifications build on the requirements specifications. It is more or less the response of the vendor to the customer referring to the descriptions in the requirements specifications. The requirements specification is already more practice-oriented - it contains concrete functions that the ERP solution must have.

What Phases does an ERP Project consist of?

The requirements specifications and functional specifications already play an important role at the start of the ERP selection - the first project phase on the way to your new ERP solution. Overall, you can roughly divide your ERP project into three or four main phases.

1. ERP selection: First, you need to decide on a suitable ERP solution as well as the suitable vendor. They will support you in implementing the solution.
2. ERP contract conclusion: Once you have decided on an ERP vendor, the contract details need to be clarified.
3. ERP implementation: The next step is to implement the new ERP system into your company - from defining the target and detailed planning of the framework conditions and the specific procedure, to training of the end users and the go-live.
4. (ERP deployment:) And finally, you have to put the ERP system into operation in practice - in the first days/weeks with the support of the vendor.