What is Critical Data?

As the first step towards enterprise resource planning development, we need to define the key information for decision-making.

Critical data is a list of key metrics describing the bottlenecks for company business processes.

For a production company, this can be the planning of the slowest operation machine and the calculation of raw material demands.
For a distribution centre it’s warehouse space planning and cargo processing; for a sales department it’s sales staff facilities.
For the financial sector, it’s trend analysis and transaction, and discounted cash flow.

In order to build an effective system, business management together with software developers determine the data set for a bespoke ERP system that is really necessary for operational control and decision-making. The core of the data is a list of processes and information, unique for each company.

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ERP System

Platform

The platform includes:
  • The core - The software environment in which the work will be done, for which you can write some add-ons and components.
  • Basic functionality - List of directories and functions, without which no company can work. This is a directory of users with access rights, a directory of customers, a directory of goods / services, etc. This functionality is built into the platform - unlike the modules it cannot be turned off.

Modules

Components that connect to the platform as needed. Each of these works with a single database and applies basic functionality (as needed). The remaining modules work independently of one another and can seamlessly connect and disconnect without issue if the need for them expires. Such a modular structure is an important distinguishing feature of ERP systems. Modules can be divided into several types, described below.

Data Management

The database, including storage and data processing methods (interpretation). This category includes data storage on the server, software for working with databases (SQL or any alternative) and tools for interpreting and processing data and directing it to program modules. The structure of the DB depends on the business needs and unique identificators, to be used in different external systems.

ERP Modules

This level includes plugins used by company employees. These cover warehouse management, production, accounting, CRM, etc. Modules can be connected, disconnected and customised by specialists during implementation. The standard set usually includes - MRP, CRM, HR, Supply Chain Management and Purchasing.

This layer contains the modules necessary for interaction with external users, actual and potential customers of the company, partners, product users and suppliers. This can be an online store, specific sections for suppliers and buyers on a corporate website and other similar solutions. Some ERP software contains ready-made CMS systems for creating an online store or a corporate site from scratch, while others offer only separate tools for "add-ons" to the site and / or client applications (for mobile and tablets).

Ready-made solutions for communication with third-party applications. This is the most common use of APIs from the core of the platform, allowing you to integrate telephony and configure the exchange of data with the site or with any given software products. Connectors are for data exchange only and are commonly used with EDI, CMS, CAD, BI, OLAP, etc. - that is, with those systems that are not part of EPR but are used within the company.

The structure described above is typical for ERP from a logical point of view. Some solutions do not have a pronounced modularity - they are all already built into the program but can be used separately from each other as needed. Some refer to plug-in modules as subsystems. Part of ERP software’s role is to allocate all the modules to separate products. They also offer the option of buying a kernel and with it a list of modules to choose from, with the possibility to buy and add features in the future as needed.

Advantages of the modular ERP structure

An important advantage of ERP systems is the ability to connect and make use of any of the modules (internal or external) in a short time. The possibilities that are thus connected to the ERP are added to the system absolutely seamlessly. This is an important difference between ERP and the integration of several software products among themselves or from a system that has grown from a specialised one via numerous improvements and add-ons implemented by its own or invited IT specialists.
Each of the modules of an ERP system operates independently of others and can be connected or disconnected at any time or simply not be used while other modules can continue working. To connect a module, you do not need to make changes to the kernel code of other modules.
When using an ERP system to expand capabilities and connect a new unit, there is no need to complete the program code, create a new part of the program from scratch or engage in the complex and sometimes inconvenient integration of different programs. Simply select the right module, connect and configure it as necessary.

In ERP software, almost everything that can be required for business automation has already been implemented. Self-written improvements are required in a small number of cases.

Clients

unilever
yandex
danone
cisco
trivago
mandara

The Single Database Principle: Control, Management, Accuracy and Efficiency

To understand this principle, let's introduce the company before and after implementing ERP. Suppose an organisation has its own production. Most likely, the account at production is conducted via tables in Excel or a specialised program. Warehouse accounting works in its own system, accounting - in accounting software. The transfer of data from unit to unit is carried out in the form of paper documents, and sometimes even orally, after which it is manually entered into the required accounting system.

This approach depends on the human factor. As a result, the information comes with often significant delays, distortions and errors. In some cases, some data does not reach the system at all due to the human error, leading to malfunctions, the need for regular reconciliations, etc. Moreover, any error and subsequent correction can lead to significant losses. If the software is implemented, a single database is created, in which all the information used by different departments is collected. In this case, the percentage of errors is significantly reduced, since the data is entered once by a specialist and then automatically read by all units in the required format and encoding.

Complex Business Processes: Integration No Longer Helps

Another case where an ERP system can’t be dispensed with is companies where complex processes require significant amounts of data exchange.
At a certain stage, integration between several software systems becomes complex, cumbersome and unprofitable. An ERP system becomes the solution to this problem.

Nuts and bolts of ERP systems
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What Prevents Business from Implementing ERP?

ERP offers the ability to combine all business processes into one powerful and convenient system. The advantages of the solution can therefore be considered long-term.

Here are the Most Significant:

Consistency of data - The use of a common database avoids the stages of reconciliation and reconciliation of data. For example, if the design department has introduced and approved a project, the procurement department can use the data from this project to work immediately, without an additional confirmation step.

Data availability - Once entered, information becomes available within the system without additional reconciliation and verification.

Control over employees’ work - In cases where one division enters data, for example, about the flow (transfer) of the goods, the other unit immediately receives information about it, and after actually obtaining the listed items sets the transfer in motion. A discrepancy in the figures in this case is almost impossible - the general database excludes the possibility of many abuses and the head can reveal any discrepancies and their causes in real time.

Significant reduction in the number of errors associated with the human factor - The unified system will not allow you to write off goods from the wrong warehouse, since the general database will indicate that the goods are not there. Information about payments will be transferred to the accounting department and the sales department automatically based on data from the bank or cash register, which also excludes errors. Technical parameters and project data will also be transmitted automatically, without distortion, etc.

A ready-made set of interconnected tools - For example, if the sales department creates an invoice, this then serves as the basis for the automatic creation of accounting documents and, after payment, the expense documents from the warehouse.

A significant number of tools that may be needed in the future - Virtually all ERP systems are very versatile and powerful. They have the capacity to implement multiple different processes. Almost always, at the implementation stage, only some these possibilities are taken advantage of. As the company grows, modules are added or bought, allowing the connecting of new departments of the company and introduction of new solutions to work - and all of this with a minimum of finance and time.

Our development specialists have gathered expertise, implementing ERP systems for dozens of clients from different industries - so, being deeply involved in hundreds of practical cases, the Magora team understand not only the technical features of the software product but also your business goals and are ready to share cross-industry knowledge with our partners.

IT Proficiency and Excellent Results

Our development specialists have gathered expertise, implementing ERP systems for dozens of clients from different industries - so, being deeply involved in hundreds of practical cases, the Magora team understand not only the technical features of the software product but also your business goals and are ready to share cross-industry knowledge with our partners.

If you need to develop your business’ efficiency via the implementation of a bespoke enterprise resource planning system - contact us.

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