Project industry must choose specific ERP system

Project-based companies face challenges of managing complex projects where each job looks similar and is in need of Enterprise Resource Planning that can provide a specialised solution for these companies, writes Sudheer Nair, Chief Executive Officer, eresource Infotech Pvt. Ltd, a leading enterprise solution company that provides end-to-end solutions that leverage technology-enabling customers to grow their business.

Today, ERP or Enterprise Resource Planning has become a widely accepted business application that integrates the diverse data and processes of a business into a unified system or process. To make matters more simple and clear, it is better to understand that ERP systems are a natural evolution of Material Requirement Planning (MRP) systems, and Manufacturing Resource Planning (MRP2) systems, that were basically related to manufacturing process. However, the effectiveness of integration and automation process in an ERP solution has promoted the application becoming the most suitable business tool in every industrial vertical.

The case of project-based industries was not anything different. Project-based companies face challenges of managing complex projects where each job looks similar, but with a number of small differences. Actually, the project-based industry was badly in need of some good Engineering-to-Order (ETO) category ERP solution which could provide a specialised solution for these companies.

It is not surprising that by now many large organisations have already realised they cannot do their business operations efficiently without an ERP system and all of them have already implemented one. The only difference is that some of them have developed their own systems in-house under the supervision of a dedicated IT team. And others went for a third party system and implemented it into their infrastructures. However, there is some drawback to the whole episode as many of them deployed an ERP solution that has not been specifically developed for project-based industry and unless the companies go for an ERP that has been exclusively developed for project-based industry, they may lack many of the features needed to handle project-based industry operations efficiently.

Costly affair
It is true that implementing ERP system in a large organisation is a costly affair and involves significant time and resources, especially when the system is internally developed or requires an important degree of customisation. While estimating the cost of an ERP system it is not just its development cost but expenses like training costs, implementation costs, customisation costs as well as maintenance costs all must be considered. However, these factors can overcome if the company chooses an indigenous third-party ERP system that has been exclusively developed for project-based industry. Companies like ours provide exclusive and affordable ERP solution for project-based industries.

Another misconception among the small and medium sized companies is that ERP is meant for only big organisations and they can postpone its usage till they have grown into the large scale. But this kind of mindset may cost them more in the long run. This is because as the amount of historical data grows, the more difficult ERP implementation may be. Over and above when a company grows it will have many additional process being added into its business operations.

In general most of the ERP system available in the ERP market today is scalable solution, meaning that it can grow as the business grows. It makes practical sense for a small business. These Small companies can now go for ERP system with what they just need to manage their tasks, and upgrade to additional users and modules as the need arise. Why I advice this is because starting early could prevent future large-scale ERP implementation headaches.

I feel the decision makers in these small and medium scale industries must realise that not having an ERP system can make their employees in the company spending a significant part of their time trying to figure out the status of certain jobs in progress, instead of simply solving it through their computer monitor.