ERP VS. STAND-ALONE SOLUTIONS
Stand alone business solutions or a single business management solution? This debate is familiar to all those who are involved in the running of a company, be it big or small.There are advantages and disadvantages to both solutions, but as you’ll read on in this blog, the case for a single business management solution, or ERP, is very strong. Stand-alone solutions are highly specialized programs that have the advantage of being customized to a particular area of business – finance, CRM, HR etc.The development time, deployment and running cost of these is low and they are a good option for those organizations that are specialized, or feel the need to focus especially on one particular area. The workflow of these solutions is simple and easy to manage. Reports generated by stand-alone solutions are very detailed and data is easily visible for analysis. Stand-alone software could offer more advanced functions than an integrated solution. A key advantage of stand-alone programs is the privacy it offers. Data is secure and only relevant personnel can access it.The program can be managed by a minimum of in-house resources, which cuts down on monthly retainer fee charged by companies selling integrated solutions. Modifications to a single program will be easy to manage in terms of cost, time and money.
However, this privacy, low price and in-depth analysis come at a cost where stand-alone products are not talking to one other. This inflexibility makes coordination between different departments, such as inventory, purchase and finance difficult. Data and orders get misplaced, time is lost in communication and consequently time-sensitive decisions could get delayed. Furthermore, the very nature of stand-alone systems makes the data unique to each system, making reconciliation of information across systems impossible.
In the event of unavailability of the in-house resource, any issue that arises will delay work until such a time as the resource returns or an alternative is found.This is why the need for an integrated solution is felt by organizations that are frustrated by the delays associated with stand-alone programs. ERP typically refers to an integrated business solutions platform designed for large companies. However, with the practicality of it becoming clear, small business ERP is now an option where SMEs can pick and choose a combination of modules that suits them best.
In-depth customization of ERP products means this solution can be tailored to a business’ requirements.Having an integrated solution deployed within an organization means all departments are synced to each other and same instance of data are shared. This means that all departments have unilateral view. A request generated from one department is instantly and automatically communicated to the relevant department(s) and decision-making is quick.
ERP does away with silo mentality in businesses. With the option to limit access to information, only those people can see data that need to. Information is available on “need to” basis. With the help of an integrated system that can access all data simultaneously and which eliminates the need for human involvement, generation of multiple reports, cross-department comparisons, and daily / weekly overview is made easy and quick. When an enterprise is generating these reports, the depth of details needed can be customized, and can give a cursory or detailed drill down as needed.
The down side of ERP is the cost. With a high purchase cost, many SMEs balk at implementing this product. However, this investment pays off in the long run.
In the end, stand-alone software could work for businesses that are highly specialized, for e.g. in pay roll or supply chain management. For companies that need different departments to run simultaneously and efficiently, an ERP solution that is customized to their needs will be the best option. An affordable ERP option is to modularize the ERP deployment. Start with only the Finance module, then later add on material management, HR and Procurement. The end result for any ERP solution is that it pays for itself over a period of time and provides industry wide best practices and optimized processes to streamline your business operations.