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Enterprise Resource Planning (ERP) applications are vital to a company’s success. From small startups to large corporate enterprises, the ability to digitally manage processes, have end-to-end data flow and analyze information from all departments and units through one ERP software is critical to success.

ERP Software Functionality

ERP software accounts for all activity and transactions across all functional areas. All of this activity should be integrated ideally within one solution. The more integrated the solution, the more effective it will be in managing your organization. Customer data that can flow seamlessly through operations and populate reliable financial data creates accountability and the ability to analyze.

Operations and finances are the lifeblood of a company and data needs to be precise, accurate and reliable. Data should only have to be input once, especially master data.

Benefits of ERP Software

Enterprise Management

The fundamental benefit of ERP is the provision of end-to end-enterprise management. Typical functional areas within ERP include:
  • Financial Management
  • General Ledger
  • Accounts Payable/Receivable
  • Estimates and Quotes
  • Sales orders
  • Production Management – Planning, Scheduling, Execution
  • Purchasing
  • Receiving
  • Inventory Management
  • Customer & Vendor Master Data
  • Fixed Asset Management
  • Quality Control
  • Shipping

Automation & Digitalization

Both small companies and large enterprises often find themselves relying on manual processes with multiple points of double data entry. Digitizing and automating processes in addition to having one single point of data entry will streamline operations and significantly reduce errors.

Integration

Integrated departments with full access to data can supplement business processes, allowing technology to assist in growth. Most companies moving to ERP software applications realize improvements in productivity partly due to the integration of data and workflow among departments. Additional benefits include:
  • Better access to information
  • Higher customer satisfaction
  • Increased transaction velocity
  • Improved management of assets, including customers, inventory, and production

Vendor Tiers

ERP software vendors are grouped into Tiers – 1, 2, and 3. Tiers vary in cost, complexity, and vertical industry presence.

Tier 1 ERP vendors supply the most complex products, and their total cost of ownership is the highest. They usually have a presence in all vertical industries. Their customer sets are traditionally Tier 1 global companies where “multi” capability is important.

Tier 2 ERP vendors do not have as complex products, and their total cost of ownership is the median in the industry. Tier 2 vendors are typically present only in certain manufacturing ERP industries. Their customer sets are traditionally Tier 2 companies ranging in size between $50 million to $1 billion in annual sales.

Tier 3 ERP vendors sell the least complex products, and their total cost of ownership is the lowest in the industry. Tier 3 vendors are usually present in only a few vertical industries. Their customer base is traditionally Tier 3 companies ranging in size from $10 million to $50 million in sales annually.

In addition to vendors in tiers 1 through 3, we also work with several Cloud ERP vendors in the marketplace.

There are vendors that serve the Tier 4 or 5 markets with revenues under $10 million, however, Ultra does not address that market.

Sometimes we encounter companies that are startups or enterprises funded by capital that are expected to grow rapidly. We counsel these companies through considering where they will be in three-to-five years versus where they are today.

Vendor Qualities

There are many major and smaller players in the ERP space. These can be broken down into Tier 1, Tier 2 and Tier 3 ERP software providers. When assessing the overall viability of a vendor, companies must consider the longevity and stability of the solution provider.

Other criteria for consideration:

  • Technology Platform
  • Cloud ERP Presence
  • Research & Development – Product Allocations, Solution Roadmaps, Mobility
  • Direct Service & Partner Channel
  • ERP Implementation Methodology
  • Acquisitions & Mergers

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