Enterprise resource planning software (ERP) is one of the most exciting business technologies out there these days. More and more businesses, from manufacturing to retail, are exploring their options. Many companies put all of their effort and time into the places where they interact with their customers. As much as investing in customer touchpoints is vital, you won’t reach your full potential until you properly invest in the main instruments where all of your company’s work gets done — your internal systems.
Every company is digitally transforming. Companies automate their processes, decrease manual work, and change out legacy systems and practices to achieve more efficient workflows and boost their profits. And it works.
Making informed decisions requires getting to know your options. We’ve prepared a guide to various types of ERP systems and what they do. We’ve also listed the best vendors for each type of system to make your research more efficient.
Enterprise Resource Planning (ERP) software has become an indispensable tool for businesses in Kenya, helping them streamline operations, improve efficiency, and make data-driven decisions. With various types of ERP software options available, it’s essential to choose a solution that suits your specific needs and industry. In this blog, we’ll explore some of the top types of ERP software systems commonly used in Kenya, providing insights into their key features and advantages. Know more about it on: https://aceteksoftware.com/erp-system-software-overview/
ERP Systems By Deployment Model
There are three common options for deploying enterprise resource planning (ERP) systems: cloud, hybrid, and on-premises. Each option offers distinct benefits and considerations. Let’s explore them further.
Cloud ERP System
Cloud-based ERP solutions have gained popularity, particularly among small and medium-sized businesses (SMBs). With a cloud ERP, the software and data are managed by a third-party vendor, reducing the need for extensive IT infrastructure and dedicated servers within the organization.
Cloud ERP offers several advantages:
- Low Maintenance: Cloud ERP eliminates the need for complex IT setups. The vendor handles software updates, security, backups, and server maintenance, reducing the IT burden.
- Scalability: Cloud ERP allows businesses to easily scale their system as their needs grow, adjusting user numbers, storage capacity, and functionality without significant upfront investments.
- Accessibility: Cloud-based ERPs enable remote access, facilitating collaboration and productivity from anywhere with an internet connection.
Hybrid ERP System
Hybrid ERP combines cloud-based components with an on-premises ERP system, catering to businesses with specific functionality needs or strict regulatory requirements.
Key benefits include:
- Data Security: Industries like healthcare and finance have strict data security regulations. Hybrid ERP allows storing sensitive data on-premises while leveraging the cloud for less sensitive operations.
- Customization and Integration: Hybrid ERP offers flexibility in integrating on-premises systems with cloud-based applications, allowing customization and integration with legacy systems.
- Cost Optimization: Hybrid ERP optimizes costs by using cloud services for non-critical operations while maintaining on-premises systems for core functions.
On-Premises ERP System
On-premises ERP refers to the traditional deployment approach where the software and infrastructure are implemented and managed within the organization’s premises. This option provides control and customization but requires a robust IT infrastructure and skilled IT staff.
Advantages of on-premises ERP include:
- Control and Customization: On-premises ERP offers complete control over software, data, and infrastructure, allowing extensive customization.
- Data Control and Compliance: Organizations preferring on-premises ERP maintain direct control over sensitive data, ensuring compliance with regulations and security standards.
- IT Expertise: Implementing and managing an on-premises ERP system requires a skilled IT team capable of handling infrastructure setup, maintenance, updates, and security.
Not One Size Fits All
Organizations may also opt for a mix of deployment options based on their needs and priorities.
ERP System by Industry
In addition to the categorization based on tiers and deployment options, enterprise resource planning (ERP) systems also vary based on industry-specific customization. ERP vendors have tailored their solutions to meet the unique needs of particular industries.
For instance, an ERP system designed for an industrial manufacturer will have distinct features and functionalities compared to one tailored for a retail enterprise. This industry-specific customization ensures that the ERP system aligns with the specific requirements and processes of the targeted niche.
When selecting an ERP system, it’s essential to consider the available modules that come with each type. The modules represent different functional areas that the ERP system covers. Depending on the system you choose, you can have a variety of modules available within your ERP solution. Some common modules found in ERP systems include:
- Accounting: This module manages financial transactions, general ledger, accounts payable and receivable, budgeting, and financial reporting.
- Order Processing & Tracking: This module handles the entire order lifecycle, from order entry to order fulfilment and shipment tracking, ensuring efficient order management.
- Logistics: The logistics module focuses on managing transportation, inventory management, warehousing, and distribution processes, optimizing the supply chain.
- Manufacturing: This module supports production planning, shop floor control, bill of materials (BOM), and overall manufacturing process management to enhance productivity and efficiency.
- Quality Control: The quality control module enables organizations to implement quality standards, perform inspections, track defects, and ensure compliance with regulatory requirements.
- Supply Chain Management: This module encompasses the end-to-end management of the supply chain, including procurement, demand forecasting, supplier management, and inventory optimization.
- Project Management: The project management module assists in planning, executing, and monitoring projects, including resource allocation, task management, and project collaboration.
- Budgeting and Forecasting: This module helps organizations in creating and managing budgets, financial forecasting, variance analysis, and financial planning.
- Human Resources: The human resources module covers employee management, payroll, benefits administration, talent acquisition, performance management, and training.
Small business ERP Systems
Small businesses have fewer operations than multinational enterprises, and hence they generally don’t need a robust system with a full suite of functionality. Moreover, small businesses usually can’t afford to invest a lot in an internal system.
Small businesses usually opt for a lightweight type of ERP that, although it might lack some features or modules, is much more affordable.
A cloud-based ERP is a great solution for small companies. It can provide the base level of tools and features with an upfront cost that’s much less compared to an on-premises ERP. There’s also no need to hire a designated IT team to maintain it, as everything is done by the vendor. Moreover, cloud-based ERP systems do not obstruct your growth and allow you to expand in the future as well as add new features and tools when the time comes.
Odoo is an open-source type of ERP software system that has gained a foothold in Kenya. It offers a range of applications for different business needs, such as accounting, inventory management, and project management. Odoo is known for its user-friendly interface and cost-effectiveness. Learn more on: https://www.odoo.com/
Sage 300 (formerly known as Sage Accpac) is a popular ERP solution in Kenya, particularly in sectors like manufacturing, distribution, and construction. It provides a comprehensive suite of accounting and business management tools, helping organizations manage their financial operations efficiently. Learn more on: https://www.sage.com/en-us/products/sage-300/
Midsize business ERP Systems
Midsize companies usually seek new types of ERP systems when they’ve grown out of their disparate programs and desire to implement a connected system that can automate some processes and provide visibility into all major business data.
Generally, midsize organizations don’t require a lot of customization options. Those who do, however, opt for a custom ERP system.
In other cases, midsize companies usually want to automate many of their operations to boost efficiency and have complete visibility of their data.
Oracle JD Edwards offers a simplified and modern user experience and enables your organization to work faster and smarter thanks to integrated digital technologies.
It also offers a wide range of databases and deployment options, including public and private cloud, on-premises, and hybrid cloud. JD Edwards has more than 80 application modules, personalization capabilities, and end-user reporting.
SAP Business One
SAP Business One is a widely recognized type of ERP system suitable for small and medium-sized enterprises (SMEs) in Kenya. It offers comprehensive features, including financial management, inventory control, and customer relationship management. SAP Business One is known for its scalability and flexibility, making it adaptable to various industries, from manufacturing to retail. Learn more on: https://www.sap.com/africa
Oracle NetSuite is a cloud-based type of ERP solution that is gaining popularity in Kenya. It caters to businesses of all sizes and offers modules for financial management, CRM, e-commerce, and more. NetSuite’s cloud-based architecture ensures accessibility from anywhere with an internet connection. Learn more on: https://www.netsuite.com/portal/home.shtml
Microsoft Dynamics 365
Microsoft Dynamics 365 is a suite type of ERP and CRM solutions that can be customized to fit various industries in Kenya. It combines powerful business management capabilities with robust analytics and artificial intelligence, helping organizations make informed decisions. Learn more on: https://dynamics.microsoft.com/en-us/
Enterprise ERP Systems
Large companies often go for on-premises or hybrid ERP systems to have unlimited control over their systems. This also allows them to connect company departments and share information with remote locations. Hence, if a company needs to send its specialists to another country to do work for an overseas customer, employees can retain access to the databases and tools they need.
Enterprise-level ERP systems are often generic, although they typically have an extensive set of modules, tools, and features. The most common ERP systems for enterprise-level companies include SAP S/4HANA and Oracle ERP Cloud.
SAP S/4HANA is available both on-premises and in the cloud. This ERP is aimed at large or upper midsize organizations, and consequently, it has complex structures to meet industry requirements. Its smart technologies automate various processes and connect analytics and transactions to provide accurate insights that help leaders steer their companies towards success and growth.
Oracle ERP Cloud
Oracle ERP Cloud is a Software-as-a-Service (SaaS) platform and an excellent scalable solution for large businesses. While small businesses can implement it too, consultants advise that the size and price of this ERP can be too much for them to handle.
How to choose the right ERP software System?
The best way to go about choosing your ERP software is to have a clear plan of action. Here’s what we recommend. Know the difference between an ERP System and an Accounting software on : https://aceteksoftware.com/erp-accounting-software-system-solution/
Prepare a plan
Preparing a plan includes defining your requirements and expectations:
- Which departments and locations are going to use the ERP systems
- Expected number of users
- Cost of ERP system
- Type of ERP systems
- Replacement vs upgrade
- Vital functionalities
- When preparing your plan, it’s also time to secure buy-in from your stakeholders.
Discover and consult
In the second stage of choosing your ERP, it’s crucial to look for the pain points in your current business processes. Consult with your company’s departments to discover their issues with the current system and detail how they would like to resolve them.
Analyze ERP systems
There are a number of ways to create a list of the top ERP system choices:
- Read reviews
- Consult industry professionals
- Collect advice from articles by reputable organizations
- Talk to leaders of companies similar to yours who have recently invested in an ERP system or are pleased with their current system
From there, contact vendors of the ERP systems you like and schedule consultations. Learn more about the leading ERP System on: https://aceteksoftware.com/sap-business-one-b1-erp-software-system/
Make a decision
At this final stage, it’s important to check everything one more time to make sure the system you’ve selected meets all your needs. Confirm costs with your vendor to ensure you didn’t miss any hidden fees. Finally, make sure you know which aspects of the ERP system are maintained by the vendor and which are your responsibility.
Selecting the right ERP software system for your business in Kenya is a crucial decision. Each of the ERP systems mentioned here offers unique features and advantages, so it’s important to assess your specific requirements, industry, and budget. To make an informed choice, consider consulting with ERP experts and conducting thorough research to ensure that the selected system aligns with your business goals and objectives. With the right ERP solution in place, your organization in Kenya can enhance productivity, improve decision-making, and stay competitive in today’s dynamic business landscape.