Integration: ERP & Legacy Systems

ERP stands for Enterprise Resource Planning and its pupose is to integrate business and management processes into one company-wide system. Theoretically (as no system is perfect), ERP manages company financials, human resources data and, if applicable, manufacturing information.

The goal is to create software that incorporates all departments and functions of the company and runs from a single database (don’t be scared; the system will not come alive like in “Terminator” the movie).
In most companies, each department often has its own computer system optimized for specific tasks. When a customer places an order, it begins a mostly paper-based voyage from in-basket to in-basket, often being keyed and re-keyed into different systems along the way. These are the problems that ERP and Legacy systems are supposed to solve for you.

Why do Companies Purchase ERP Systems?
There are typically three reasons purchase an ERP system. The first is to consolidate financial data. As the CEO tries to understand the company’s overall performance, he or she may find many different versions of the truth (we only need to look as far as Enron to see that numbers can lie). Finance has its own set of revenue numbers, sales has another version, and the different business units may each have their own versions of how much they contributed to revenues.
ERP is also used to standardize manufacturing. Standardizing processes and using a single, integrated computer system can save time, increase productivity and reduce headcount.
Human resources it the third reason companies invest in this technology. Especially in companies with multiple business units, HR may not have a unified, simple method for tracking employee time and communicating with them about benefits and services. ERP is supposed to fix this.

Will ERP Fit the Way I do Business?
ERP is in some ways like Marxism; let’s face it, they are both great in theory. However, many companies have run into terrible problems while implementing the system.
The first major problem with ERP is the prohibitive cost associated with it, especially for small and mid-size companies. The cost of implementing a new ERP system can often run well into the millions. Of course, even after the system is up and running, unavoidable glitches must be dealt with, and employees must be trained on the system. Another problem commonly cited with ERP systems is their compatibility. A business may find, for example, that the system does not function with one or more of their business processes. At that point there are two things they can do: They can change the process to accommodate the software, which can require major changes in long-established ways of doing business (not so rosy an alternative). Or they can modify the software to fit the process, which slows down the project, introduces more glitches, and makes upgrading difficult, because the customizations will need to be torn apart and rewritten to fit with the new version.
The implementation of ERP is a massive project, and the costs associated with it can easily scare any CFO. In addition to budgeting for software costs, be sure to plan on writing checks to cover consulting fees, integration testing and a long laundry list of other expenses before the benefits of the system start to become visible.
One alternative is a business-to-business marketplace, such as Beautportal.net. For a mere fraction of the cost of an ERP system, Beautyportal.net has an automated purchase order and invoice system, workflow tools, an accounting system, marketing tools, and much more.