What is Critical Data?
As the first step towards enterprise resource planning development, we need to define the key
information for decision-making.
Critical data is a list of key metrics describing the bottlenecks for company business processes.
For a production company, this can be the planning of the slowest operation machine and the
calculation of raw material demands.
For a distribution centre it’s warehouse space planning and cargo processing; for a sales
department it’s sales staff facilities.
For the financial sector, it’s trend analysis and transaction, and discounted cash flow.
In order to build an effective system, business management together with software developers determine
the data set for a bespoke ERP system that is really necessary for operational control and
decision-making. The core of the data is a list of processes and information, unique for each company.
The structure described above is typical for ERP from a logical point of view. Some solutions do not
have a pronounced modularity - they are all already built into the program but can be used separately
from each other as needed. Some refer to plug-in modules as subsystems. Part of ERP software’s role is
to allocate all the modules to separate products. They also offer the option of buying a kernel and with
it a list of modules to choose from, with the possibility to buy and add features in the future as
needed.
Advantages of the modular ERP structure
An important advantage of ERP systems is the ability to connect and make use of any of the modules
(internal or external) in a short time. The possibilities that are thus connected to the ERP are added
to the system absolutely seamlessly. This is an important difference between ERP and the integration of
several software products among themselves or from a system that has grown from a specialised one via
numerous improvements and add-ons implemented by its own or invited IT specialists.
Each of the modules of an ERP system operates independently of others and can be connected or
disconnected at any time or simply not be used while other modules can continue working. To
connect a module, you do not need to make changes to the kernel code of other modules.
When using an ERP system to expand capabilities and connect a new unit, there is no need to
complete the program code, create a new part of the program from scratch or engage in the
complex and sometimes inconvenient integration of different programs. Simply select the right
module, connect and configure it as necessary.
In ERP software, almost everything that can be required for business automation has already been
implemented. Self-written improvements are required in a small number of cases.
Clients
The Single Database Principle: Control, Management, Accuracy and Efficiency
To understand this principle, let's introduce the company before and after implementing ERP. Suppose an
organisation has its own production. Most likely, the account at production is conducted via tables in
Excel or a specialised program. Warehouse accounting works in its own system, accounting - in accounting
software. The transfer of data from unit to unit is carried out in the form of paper documents, and
sometimes even orally, after which it is manually entered into the required accounting system.
This approach depends on the human factor. As a result, the information comes with often significant
delays, distortions and errors. In some cases, some data does not reach the system at all due to the
human error, leading to malfunctions, the need for regular reconciliations, etc. Moreover, any error and
subsequent correction can lead to significant losses.
If the software is implemented, a single database is created, in which all the information used by
different departments is collected. In this case, the percentage of errors is significantly reduced,
since the data is entered once by a specialist and then automatically read by all units in the required
format and encoding.
Complex Business Processes: Integration No Longer Helps
Another case where an ERP system can’t be dispensed with is companies where complex processes require
significant amounts of data exchange.
At a certain stage, integration between several software systems
becomes complex, cumbersome and unprofitable. An ERP system becomes the solution to this problem.
What Prevents Business from Implementing ERP?
ERP offers the ability to combine all business processes into one powerful and convenient system. The
advantages of the solution can therefore be considered long-term.
Here are the Most Significant:
Consistency of data - The use of a common database avoids the stages of reconciliation and
reconciliation of data. For example, if the design department has introduced and approved a
project, the procurement department can use the data from this project to work immediately,
without an additional confirmation step.
Data availability - Once entered, information becomes available within the system without
additional reconciliation and verification.
Control over employees’ work - In cases where one division enters data, for example, about
the flow (transfer) of the goods, the other unit immediately receives information about it,
and after actually obtaining the listed items sets the transfer in motion. A discrepancy in
the figures in this case is almost impossible - the general database excludes the
possibility of many abuses and the head can reveal any discrepancies and their causes in
real time.
Significant reduction in the number of errors associated with the human factor - The unified
system will not allow you to write off goods from the wrong warehouse, since the general
database will indicate that the goods are not there. Information about payments will be
transferred to the accounting department and the sales department automatically based on
data from the bank or cash register, which also excludes errors. Technical parameters and
project data will also be transmitted automatically, without distortion, etc.
A ready-made set of interconnected tools - For example, if the sales department creates an
invoice, this then serves as the basis for the automatic creation of accounting documents
and, after payment, the expense documents from the warehouse.
A significant number of tools that may be needed in the future - Virtually all ERP systems
are very versatile and powerful. They have the capacity to implement multiple different
processes. Almost always, at the implementation stage, only some these possibilities are
taken advantage of. As the company grows, modules are added or bought, allowing the
connecting of new departments of the company and introduction of new solutions to work - and
all of this with a minimum of finance and time.
Our development specialists have gathered expertise, implementing ERP systems for dozens of clients from
different industries - so, being deeply involved in hundreds of practical cases, the Magora team
understand not only the technical features of the software product but also your business goals and are
ready to share cross-industry knowledge with our partners.
IT Proficiency and Excellent Results
Our development specialists have gathered expertise, implementing ERP systems for dozens of clients from
different industries - so, being deeply involved in hundreds of practical cases, the Magora team
understand not only the technical features of the software product but also your business goals and are
ready to share cross-industry knowledge with our partners.
If you need to develop your business’ efficiency via the implementation of a bespoke enterprise resource
planning system - contact us.
