Having an enterprise resource planning system that can address all the needs of an organization used to be a difficult proposition, if not entirely impossible. Because the all-in-one platforms that were common a generation or two ago required so much in the way of in-depth customization and implementation, crafting a fully useful system involved extreme amounts of effort. Additionally, lead times for installation were very long. If an error was found in such a system, it was a difficult, drawn-out process to change and update it. When the organization adding the system had a variety of operational needs, like manufacturing and warehousing companies often do, the process involved even more potential roadblocks.
As compared to previous types of ERP, the advantage of a modular system such as Microsoft Dynamics NAV is the ability to add components based on the needs of a specific industry as well as an individual company. Different add-ons can be incorporated into the software to deal with concerns like tracking sensitive or hazardous materials, or broader issues like barcode data collection and overall inventory recording. As Manufacturing Business Technology points out, the ability to add and use these individual attributes is one way that good ERP solutions differentiate themselves from the pack.
Automating processes can save time and money
One area where the effectiveness of modular ERP truly stands out is in the field of process automation. There are plenty of tasks and recordkeeping requirements that are important yet simple enough that it's often a waste of time to dedicate employee hours to these issues. For example, tracking hours worked is a vital part of operations as it leads to the right level of compensation for workers – especially important in an hourly environment – and producing the correct paychecks. This is a process that can easily be controlled by ERP with a module for timekeeping software.
Project scope is another area where component-based ERP has an advantage. Venture Outsource highlights "scope creep" as a common fault among ERP systems, where the desires for functionality outstrip the ability of a company to fully use such a platform. Modular ERP allows companies to target specific processes during the initial implementation phase as well as after installation, reducing the risk of scope creep.
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