ERP for the Manufacturing and Utility Industries
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3 Essential ERP Systems You Need to Compare

ERP solution

3 Essential ERP Systems You Need to Compare

The search for an ERP system is a long and daunting process that usually takes a few months but it is critical to make sure you take the right decision since it will impact your business for the next few years and sometime decades. If you make the right choice, it will streamline your processes, make your life easier and take your efficiency levels to a level you never imagined.

The first step toward choosing the right ERP is to find the type that will be right for your business. You have three options here: out of the box, customizable or configurable. We will try to help you choose the right fit by presenting each system, their benefits and the pitfalls to avoid.

Out of the box

An out of the box ERP is a pre-conceived system that needs zero to very little configuration or customization. Relatively quick to install and launch, it includes vital functionalities of an ERP system that are repetitive across markets and industries. For example, a manufacturing company and a retailer will use the same standard supply-chain management module to run their logistics. Although it may be sufficient for a young business trying to quickly put a simple system in place, it can be problematic for corporations with sophisticated processes. A manufacturer of pre-engineered metal buildings with a large and complex Bill of Materials will probably not gain as much efficiency if he uses a standardized system that was built for retail vs a production module that incorporates processes developed for the metal Industry.

If it demands less customization than other systems initially, buyers have to keep in mind that an out of the box ERP is also less flexible. This means that the company will have to bend its processes to fit the ones created within the software. It can be a good option; sometimes processes are unique to a business for a reason, because they are not the most performing within the industry, and the standard process will improve efficiency. But buyers must be careful that implementing an off the shelve solution will not impact negatively their comparative advantage.

Customization is regularly required to have a better fit-solution that will truly impact a business efficiency but it will require major investments that can double or triple the amount initially invested.

Read Also: How to choose a Manufacturing ERP Software?

Customizable ERP

A customizable ERP is a solution built from scratch to fit your current processes. It requires heavy development and budget but also senior management and a team of experts in ERP implementation. Because of the amount of work that goes into, it will be the solution with the highest risk and overall cost.

Because of the very nature of customizable ERP, the budget and timeframe required are extensive which makes them complicated to estimate. Since some of the modules are created for the first time, it is not rare to need more for testing and development than anticipated; generating delays and increasing initial costs.

A good fit for this type of projects is typically a large corporation with decades of best practices and unique processes that already give them a clear competitive advantage over competition. They are ready to put together a team of experts in project management and to invest millions of dollars into a system that will reflect their unique way of doing business. This type of company will typically have the resources and such unique processes that creating a fully tailored ERP system will reinforce their competitive advantage and justify the resources invested into a brand new solution.

Configurable ERP

A Configurable ERP is a middle ground-solution between the two. Probably the most common, they still require some development but they are easier, quicker and cheaper to implement than customized systems.

Such systems are basically a list of modules that the business chooses from to create a solution. The programming phase will consist in selecting and setting up the right modules.

In this extent, configurable ERP systems are fairly fast and easy to implement. They require a lower risk management than customizable systems while fitting more of the business than an out of the box solution. Since the modules are pre-conceived, buyers must pay close attention to the functionalities offered and the way they have been developed.

Are the new processes more efficient than the ones in place? Have they been primarily designed for another industry? Do they include the best practices of your industry? There are so many configurable ERPs out there that you can certainly find the perfect fit for your business, and industry knowledge should be a major part of the selection process.

Two concerns usually rise with this model. The first one is on an economic standpoint. Vendors usually offer a rate-card per module and charge the client for each module activated. The prices presented are usually prohibitive and too often clients have to sacrifice functionalities to stay within budget. The second is on a technical level. Consider a vendor offering manufacturing, shipping and accounting modules. The evaluation team may select only the first and the last, leaving the logistics aspect to another program or the process currently in place. IT managers will be tasked to fill the gaps between the missing parts, which can not only be challenging (or worst, dysfunctional) but also annihilate the whole benefit that was sought after in the first place:  to centralize every aspect of a business and bring transparency.

Read Also: How To Calculate an ROI for your Manufacturing ERP?

The perfect fit – Configurable solution and industry specialist

Our first recommendation is to go with a system that knows your industry. We, at ABIS, Inc, specialize in Manufacturing, Metal, and Utility Industries. It is what we know, and what we have been recognized for during the past three decades.

But it is not only logical because of our industry knowledge or our experience. Every single module developed in Adjutant, our software, has been written to fit the best practices of a specific industry. For three decades, our client-partners have shared their processes and we have taken the best of them to input them into Adjutant. Today, it is a formidable collection of best practices that plays in harmony together. We called this collaborative sharing, and it is the base principle of ABIS, Inc technology.

As a configurable solution, client-partners can choose to activate the modules they primarily need. But unlike most configurable system, they do not pay each module individually: we directly offer and install the entire system. Client-partners can choose to activate the most important options now and progressively integrate new functionalities as they grow for the same price.

This is not only cost-effective for our client-partners, we also find it more ethical, because there is nothing more frustrating in our eyes than buying something without using it to its full potential. It would be like ordering a 20oz Ribeye at your favorite steakhouse and only being allowed to eat two bites out of it. Nobody would want that. So at ABIS, Inc, we serve you the 20oz Ribeye, and not only do we let you eat all of it, but we also make sure it’s the best one you will ever have because we have spent 30 years in every steakhouse and farm in the US to find the ultimate piece that will make you forget what a regular steak used to taste like.

So whether you are a manufacturer, a metal business or a utility company, ABIS, Inc has compiled into one software the best practices of your industry. If you want to learn more about us, you can take an introductory tour of Adjutant, and when you are ready, let us know and we will schedule a personalized demo to show you the functionalities that you want. And if you happen to be in Houston and looking for a 20oz Ribeye, feel free to give us a call and we will give you a few pointers that will be worth your time.

About Author

Simon De Brito

I support Marketing Operations at ABIS, Inc. We are making industrial businesses smarter by automating their processes to gain productivity, increase margins and generate more profits.

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