Traditionally, an Enterprise Resource Planning (ERP) system, has been used by manufacturing plants, but throughout the years, its usage has expanded to other industries, such pharmaceutical firms, distribution companies and shops that can benefit from a centralized environment. The ERP system is purchased in modular form, so companies buy the functions they need, such as inventory, accounting or human resources modules.
When businesses deploy an ERP system, they usually standardize processes and streamline tasks and financial reporting—instead of having to enter the same information in several systems, the data is input only once and can be used by different areas of a business. This level of efficiency can give firms a competitive edge in the marketplace.
Panorama Consulting has released a 2011 Guide to ERP Systems and Vendors that sheds light on which industries has been using ERP programs, such as SAP, Microsoft Dynamics and Oracle. The guide shows the main "needy" industries deploying ERP:
Manufacturing and Distribution
Transportation, Communications, Electric, Gas and Sanitary Services
Manufacturing and distribution industries lead the implementation of ERP systems, with retail trailing behind other sectors. According to the guide,
SAP is the top vendor in each of the four industries, with shares ranging from 25.0-percent to 35.0-percent. Oracle also plays a significant part in all four industries, with shares ranging from a 15.0-percent low in manufacturing to a high of 23.0-percent in transportation.
These large firms have also alternatives for small and medium-size businesses, such as Oracle E-Business Suite and SAP Business One. Some providers, such as OpenBravo, have focused on the small and medium size businesses, while others have focused on ERP add-ons that work with the popular Quickbooks accounting system. Examples of these add-ons are MISys Manufacturing and TracManager,which are affordable alternatives for the small manufacturer.
An ERP system can be expensive and take awhile to set up, but it is a worthwhile proposition for many firms that need the flexibility and the usefulness of a centralized depository of information. Recently, many ERP systems have been customized for certain industries, such as hospitals or car fleet firms, to minimize implementation and customization times and costs.
Prospective buyers of ERP products should assure themselves that the vendor, integrator and others involved in the implementation process are familiar with the industries they operate on. Implementing an ERP system for a hospital is different from doing the same for a distribution firm, for instance—the systems may be the same, but the functionalities are quite different.