A manufacturer might their set sights on a second factory, while a homebuilder hopes to attract and retain key employees. Beneath their various objectives, common to any business is the means to transform vision into reality: customers, revenue, and profit. Along the road, businesses will require tools and technology to get to the next level. And in terms of software that a business can’t live without, Enterprise Resource Planning (ERP) means different things to different industries.
Every business has its own unique obstacles to growth, and while it can be tantalizing to think an all-in-one software solution can remove those barriers, an inflexible, one-size-fits-all approach can often present new growth challenges.
Kayla, who owns that manufacturing business and employs about 100 workers, is looking to expand her operations. But, before she pulls the trigger she wants systems in place that track her inventory in real time and produced customized, advanced reports to keep her inventory operations as efficient as possible.
Matt’s construction business increased sales by 15 percent last quarter but the bottom line didn’t seem to change accordingly. He can recall some cost overruns but didn’t think profits would suffer from a few tentative forecasts.
Matt has financial software that is able to predict job costs, and by comparing estimates to actual results he can instantly run a report to pinpoint the exact source of the revenue hit. Armed with this information, Matt can address the shortfall and prevent the leak from trickling into the next quarter.
If your business has grown and requires industry-specific solutions, how will you find software that best suits your needs?
Is an ERP right for my industry?
ERP includes both payroll and job cost functions and estimating software holds more value for a contractor than a manufacturer. Consider all the modules packaged in a complex software suite. Each component performs a specific function but not all modules might be relevant for certain industries. Nor do the tools have the context or specialization of industry-specific tools available.
Does it make fiscal sense for a manufacturer to overhaul its existing systems in favor of an over-engineered ERP? In theory, ERP can look like a complete solution to all your business problems, but owners must beware of the significant cost both in time and money during implementation.
At a glance, Kayla and Matt have separate but not completely unrelated problems falling under the umbrella of finance—and while both business owners may show some love for an ERP, they might want to continue using what they already have.
Accounting-first software solutions don’t require expensive rollouts, extensive employee training initiatives or intricate customizations with systems you’re already using. Specialized features of standalone accounting packages can be added with minimal disruption, and a user’s familiarity with current apps allows them to plug in and play on.
A retailer will have a stronger appetite for an inventory management system than a construction firm. Each minute its doors are open, the former must anticipate and brace for shifting patterns of consumer demand while the latter’s success hinges on accurate job cost estimating and an obsession to complete all projects on schedule. Yet, no matter what industry you hail from, there are software applications that fall into the must-have category.
An ERP comes loaded with end-to-end modules that include vital accounting and payroll systems, but will a grocery store have any use for a comprehensive human resources information management system if it already utilizes an effective software solution?
A more affordable and valuable software alternative for small- and medium-sized businesses could emerge from picking and choosing a la carte menu items along the serving line rather than ponying up for the whole cafeteria. You want slick reporting bundles to disseminate sales, cost, and marketing data among departments. That’s a no-brainer. You’ll also develop a fondness for customizable account charts that provide at-a-glance and categorical summaries of assets and liabilities. ERP can fulfill both those needs but you’ll experience an adjustment phase while employees learn the system.
Across a range of business sectors, let’s inventory some components of specific applications that individual industry segments simply shouldn’t forego. You can reap the benefits of the following cutting-edge software features as easily in specialized, standalone applications as you could in a bulky ERP that comes with added maintenance fees and annual upgrade costs.
Manufacturing and wholesaling: Mobile barcode scanning cuts down on human error and speeds along the picking process in your distribution centers or warehouse. Tracking orders on a virtual dashboard also helps propel the sales process through each stage of the pick, pack and ship journey—from point of sale through fulfillment. Manufacturing ERPs can walk you through that journey but these systems might have you carrying some extra baggage along the way.
Contractors: Cash flow is king for contractors, so the job costing function in their business management software has to be both elegant and easy-to-use. Without the ability to ascertain which projects are most profitable and which are in the red, it is difficult to achieve sustainable growth. Contractor-specific reports like cost-to-complete, billed hours by person/job, and open purchase orders by vendor are all essential to projects getting completed under budget and on time.
Retail: The ability to efficiently manage inventory is key to protecting a retailer’s profit margin. Mobile barcode scanning has become a matter of necessity along with the ability to easily manage end-to-end inventory workflows. Along with inventory management, retailers must be able to quickly and accurately price their products based on changing demand. Without the ability to create sophisticated pricing rules and maintain flexibility retailers can miss out on revenue while holding the bag with excess inventory.
Professional services This is an excellent example of why bundled software solutions often pile too much on the plate—service organizations carry no physical inventory. Thus, any app that tracks stock and comes constrained within an ERP wrapper is useless to a law or medical practice. More essential to the success of a professional service business is the ability to set different rates for various levels and types of ministrations. Viewing unbilled hours and expenses by project or employee helps you monitor costs and forecast profits.
Nonprofits With sweeping changes to federal tax codes, not-for-profit organizations like NGOs face challenges like managing donors, staying current with IRS regulations, and the database management that comes with it. Compliance software modules play a central role in assuring that philanthropic entities spend less time navigating the law and more time seeking grants and raising funds. In and of themselves or with assistance from specialized tools, compliance modules integrate easily with an accounting-first solution for a potent one-two punch.
Accountants The ultimate number-crunchers, accountants crave the most effective financial packages available to assist clients and balance their own books. Any competitive edge an accounting firm can gain by leveraging advanced reporting tools also helps its customers isolate cost-cutting measures, along with new credits and deductions created under the recent tax code changes. When all is said and done, much of your business success will boil down to maintaining a healthy balance sheet. Real-time views of evolving financial statements help you continuously stay in tune with the top and bottom lines, and for CPAs, that’s where the story is told.
A final word
Like people, it’s fair to say no two businesses are alike. The ultimate quests for viability and profitability are commonly shared goals, but the path to those destinations are different for each organization. There does seem to be one constant: It’s tough to compete today without trusting some of your core functions to software—and there are a lot of options to choose from.
Before you do make that choice for accounting, customer relationship management or inventory tracking applications, you should proceed one step at a time to tailor the best fit between your business and technology.
No one knows the intricacies of your business better than you. Thus, you can quickly identify those one or two key areas that can benefit from software solutions. The continued success of your business will hinge on the knack you’ve had for making prudent investment decisions, so keep that momentum rolling down the line.