How ERP Requirements Differ Across Industries

How you employ Enterprise Resource Planning (ERP) technologies varies widely from industry to industry. At its core, ERP works the same – The goal is to manage and distribute resources as effectively as possible between different pools of employees across a diverse organization. However, how this is done in different industries depends a lot on the needs of that industry.

Before you begin selecting and/or customizing an ERP platform, get very clear about the unique requirements of your industry. For example, in the finance industry security might be tantamount. In a recruitment agency, people and contacts might be tantamount. In a sales organization, your ERP system should be closely integrated with your customer relationship systems.

A Concrete Example: Grocery Stores

Let’s take the example of a national grocery chain. Many of this chain’s resources will be similar to other businesses. These stores need to manage accounting and taxes, they need to manage people, they need to manage vendors and so on. However, there are a few things that set this company apart.

First of all, there are a lot of deliveries they need to manage. These deliveries need to be coordinated to very specific times of the week so that goods arrive soon enough to fulfill demand but not so soon that shelves get overstocked. The process from ordering to actually having the goods stocked and sold can be quite complex, involving several steps.

Furthermore, you have to track spoilage. How long can each item stay on a shelf? What happens when it spoils? Who manages that? How much does spoilage cost the company and what can be done about it in the long run?

Then you have statistical analysis. Are there certain products that customers buy a lot more of in spring? Are there products that tend to spike when certain events happen? One unexpected example is that grocery statisticians found that demand for PopTarts goes up significantly in the Florida region when there’s a hurricane warning.

These are all factors you’d design into an ERP system designed for a national grocery store. Many of the ERP software’s functions will be pre-built into it. However, the more unique aspects of the software will need to be custom built depending on your organization.

Identifying and Implementing Your Organization’s Unique Needs

Begin by contacting each department of your company. Ask each of them what they need in a comprehensive ERP package. Ask about what unique needs your company has based on your approach. Make sure that you cover:

  • Marketing. An organization that does face to face sales is going to have very different needs than an organization that does primarily TV advertising. Online advertising requires different management software as well.

  • Product Creation. If you’re physically manufacturing products, that’s a very different business than if your product is a service. Identify the ERP needs of your product creation process.

  • Human Resources. How do you hire and fire people? How do you track performance within a company? Though the term “Human Resources” is an umbrella term, the reality is that different companies have very different procedures.

  • Finance. How do you handle investor relations? What about accounting and taxes? How do you store the company’s cash on hand and how do you manage cash flow? Who gets access to accounting systems and who doesn’t?

  • IT/IS. Do you have an on-staff development team? How is your server managed? What unique needs and resources does your organization need to manage? An online dating website’s IT concerns might center around server load and date-matching technology. On the other hand, a retailer’s IT needs might center around warehouse management.

  • Supply Chain Management. How do you manage your supply chain? Do you need to coordinate various different suppliers for different parts to assemble your final product? What do you need to track and improve to ensure fast and affordable delivery of your company’s supplies?

These are all ERP requirements that differ greatly across industries. At its core, your ERP software could share a lot of properties with other ERP platforms. However, in order to really have a piece of software that can help you manage all the resources your company needs, your ERP systems must be carefully customized to your industry and your company.

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