You've heard of ERP. You may even know a bit about the benefits the right system can bring in terms of efficiency and profitability. But do you know the differences between a generic ERP and a project-based ERP system?
What Is Generic ERP?
A generic ERP system can be bought 'off the shelf' meaning it offers obvious benefits in terms of convenience and cost.
Companies across many sectors use 'ready-made' ERP systems for storing transactional data. This data is then processed estimating, resource management, accounting, cost analysis and invoicing.
Many businesses find a 'one size fits all' ERP system is sufficient for their needs - especially if their operational structures are straightforward.
Yet, as a professional services firm, you may find a generic systems doesn't offer the depth of insight you require.
Project-based ERP for Dummies
Breadth Over Depth
In fact most ERP systems have evolved from software designed for product manufacturing. They have simply grown over time to appeal to as broad-a-market as possible.
This 'all things to all men' approach comes at the cost of providing a meaningful industry-specific solution that can provide real value to a professional services firm.
As a result, some firms choose to customise generic ERP in an attempt to gain the specific insight they need to capitalise on their unique strengths as a business.
Yet modifying a generic platform can be extremely time consuming and complicated.
As a professional services business, you may prefer instead to opt for an industry specific solution that is more attuned to your needs.
So, what kind of system could this be?
Whether you're an architect, law practice, media agency or engineering consultancy, you have the added complexity of managing project data as well as the transactional data say a manufacturing company will have.
As a result, you will benefit from using a system that can provide a 360 degrees view of your firm.
Project-based ERP systems are therefore designed to be "three dimensional" in their approach.
Whereas generic ERP can tie financial data only to an account and an organisation, a project-based ERP system will align all transactions to accounts, organisations and projects.
Take billing as an example. Most generic ERP systems will offer one or two billing types. But with multiple clients requiring different formats and billing terms then you'll need more options and greater processing ability to get the accurate picture you need.
You need to know how the different projects you have in the pipeline at any one time can impact the profitability of your firm.
Looking at the 'bigger picture' from different angles will help you make more meaningful decisions that can contribute to your firm's growth.
The Right System For Your Firm
Whether a generic ERP system will work best for your firm, or whether you require the in-depth, "3D" vision of a project-based platform, the ERP solution you choose will depend very much on your own company's structure, requirements and ambitions. However, relying on an ERP system that’s not fit for your business could cripple both your productivity and profitability. It is therefore worth ensuring that you select the right system to enable your business to function successfully and grow.
Understanding ERP - Introduction Series
- What Is ERP And Why Do Businesses Use It?
- The Five Components Of ERP Software And Their Individual Powers
- Mastering Project KPIs With Business Intelligence Software
- Using A Project ERP System To Plan A Project
- How To Make Time Recording Easier With Project ERP
- 7 ERP Terms Every Project Manager Should Know
- 6 Fundamental Questions Your Project ERP System Can Answer
Project-based ERP for Dummies