ERP (enterprise resource planning) configuration is a crucial step in implementing ERP processes in your organization. One of the reasons the ERP system is effective is that it doesn’t follow a one-size-fits-all concept. ERP software’s function varies on every organization and can be customized to fit the company’s needs and conform to the workflow.
Before implementing an ERP software, you can start by looking for an ERP platform matching your business processes and one that best understands your departmental needs. ERP consulting with NexInfo could help you find the best ERP software for your company.
But what exactly is ERP?
What is ERP?
ERP is the short term for Enterprise Resource Planning. It’s a type of resource planning software created to organize relevant business data and help the organization to have fast and efficient business operations. The planning software assists companies in managing and integrating a business’s vital operational aspects.
ERP software applications maintain resource planning by combining all the steps in running the company within one system. The software manages critical business functions, including human resources, purchasing, sales, and accounting. It can be extremely effective if maintained correctly.
What Is ERP Configuration?
Configuring an ERP system basically means setting options in the ERP. Since options can be numerous, this process can be tricky. Doing this requires a much deeper technical know-how of a particular ERP system before attempting any configuration. It’s also crucial for existing features to be arranged to fit the system’s requirements.
Setting up your initial configuration requires proper care since most choices cannot be reversed. The good thing is you can modify these choices as your business changes. Here are some examples of ERP configuration:
- Defining hierarchy and role based on access controls
- Setting up time zone, currency, and language preferences
- Creating a default email message and template for clients
- Creating page layouts
What is ERP Customization?
Customizing ERP systems is about modifying on a generic scale to meet specific organizational requirements. Essentially, ERP customization means creating functionality that isn’t found in the software. Customization requires coding skills and knowledge of software development.
Some examples of ERP customization include:
- Adding a specific task to processes
- Enhancing existing features
- Adding new options that aren’t originally included
ERP Configuration vs. ERP Customization
Configuration and customization can work hand-in-hand with one another, but they also have differences. Here’s how configuration differs from customization:
- In customization, more doesn’t always mean better.
- Some extended features that once needed customization can now be done during configuration.
- Most configuration systems will survive the latest software updates, but some customization cannot.
The Importance of ERP Configuration
Now that you know the definition of ERP and the differences between ERP Configuration and ERP Customization, it’s time to learn why ERP Configuration is essential. Here are several benefits of ERP Configuration:
- Higher management performance
- Efficient delivery of information
- Increased coordination
- Enables vehicle tracking
- Improved planning and reporting
- Facilitates in attendance checking
- Payment system integration
- Report improvements
- Improved organizational productivity
- Reducing errors
- Meeting customers’ expectations
- Cost reduction
- Data reliability
Setting Up the Configuration System
Below is a list of activities to set up the base system:
1. Company Creation
This stage is when a database is created. Some are made for actual transactions, while others are for training and testing.
2. Currency Setup
Currencies are configured by base currency, alternate reporting currencies, and transaction currencies. This setup will help your business during financial transactions.
3. Setting Up Of Periods And Calendars
Periods are time intervals that can be used for financial, statistical, cost control purposes, and planning. Calendars record the resources’ ability. These can help your business achieve organized operations.
4. Units Of Measure
Units of measure include surface area, length, weight, time, and their conversion factors.
5. Finance And Logistics’ Integration
This phase includes setting up intercompany relations, updating finance tables, inventory valuation, and defining number groups.
6. Defining Countries
If you have global reach, then you will need software that can efficiently generate the country code of your business partners and customers. Tax calculation and reporting fall under this activity.
The Users of ERP Systems
The benefit of ERP systems depends on the role of its primary user. Managers and executives can enjoy the dashboards and reports access. Staff members can use the production feature. Collaborating and access to information are allowed within a secure environment.
Wrapping It Up
Business operations can benefit from technological upgrades like ERP configuration to enhance customer support, reduce errors, deliver efficient information, and produce high-quality management. Moreover, without an efficient consultant that will help you to configure ERP systems, your employees might duplicate records, miscalculate data, and cause confusion
that could result in inefficient business operations.