How companies realize need of having ERP

This article will have following points:

• Why companies may need ERP
• Why companies may not need ERP
• Summary - ERP or not ERP

Why companies may need ERP

As usually companies are started by dreamers. But there are two kind of dreamers: those who lie on the sofa, and dream about wonderful future, and idling about how successfull they are.

But also there are people, who so much convinced in reality of their dream, that they start to make that dream a reality. Quite often that reality doesn't include learning of what other companies do, in order to pay taxes, track sales, manage inventory, open multiple bank accounts, insurance policies applied, and so on.

Facing these different tasks, company founders start from having different software, which manages one or the other aspect. Software #1 in that regards become excel spreadsheet or google spreadsheet. Some spreadsheets contain salaries, another spreadsheets contain insurance policies, another taxes, another inventory, ..., this list can be endless.

Some founders in such situation start to think, is there soemthing more efficient then spreadsheets? They wonder: if I have such a problem in my business, potentially I'm not unique. Probably others have solution. And quite often they replace software #1 or spreadsheets with bouquet of softwares: one software for accountancy, one software for warehouse management, one software for hr, one software for inventory management, .... again, this list may become endless. At this stage founders may start to think. Is there a way to have single source of truth about everything happening in my company, instead of having 5, 10, 15, 20 applications, each informing me about this or that. And suchlike family of software exists. It has general name ERP, or Enterprise Resource Planing.

After that company will have a dilema: what ERP to choose? I'm going to write an article about that another time.

Why companies may not need ERP

After such message that companies need ERP, to say now why companies don't need ERP may be like self contradicting. Or puzzling. But still, I will try to explain cases, when for some business owners I don't recomend to have an ERP.

Main idea/reason why not, would be statement: each creation is a reflection of it's creator. Or each company is a reflection of it's founder (s).

Biggest plus as well as minus of any software, is fixed set of business rules, which have to be coded. And after they coded, they in one or the other way need to be followed. Hence question for founders/owners: are you able/willing to elaborate fixed set of rules for your company to follow? Are you willing/agreeable to sacrifice flexibility, which your company has without ERP, in order to gain systemacity?

As usually when I ask such a question, everyone says, yes, I want to. Or I'm very systematic person. I or we woudln't be able to achive such a growth, without being very organized, scrupolous organization. But once BA starts to gather requirements, refine them between different team members and boom: left hand doesn't know what right hand does. Or as we jokingly say, it seems like company is ruled by different people.

ERP or not ERP

If to sum up, to implement ERP, or not implement is your choice. But in the long run I believe each company will come to ERP: either ERP on the market, or implement some kind of ERP for themselves. And as it often happens, the longer you postpone ERP implementation ( bought or self-created ) the more you need to invest into well being of your company.