The Great Debate: ERP vs. Accounting Packages

The Great Debate: ERP vs. Accounting Packages
Written by: Marco DErcole
Published: March 18, 2011



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    Aspirations of greatness notwithstanding, you’re still a fairly small organization at this point in your development. Your employee count is modest, your daily operations straightforward, your technical requirements few.

    Only the big guys, surely, stand to benefit from the complex computerized infrastructures that come by way of installing sophisticated ERP systems. Or so you tell yourself as you start yet another day with the technical support of nothing grander than a basic accounting program.

    SMEs Benefit From ERP

    In fact, many small companies are surprisingly complex entities that may, in fact, stand to benefit greatly from an investment in ERP software. Increasingly, business leaders acknowledge the fallacy of the longstanding assumption that ERP systems are the province of larger organizations alone. Indeed, a company’s personnel tally is no more an indication of its technical requirements than the size of its lunchroom or the age of its chief executive.

    Given that ERP software can be among the single largest IT investment a company makes, it behooves clever managers to determine their operation’s suitability for such a technological outlay (or to accept that a solid accounting package actually does the trick just fine, thank you very much).

    Consider This

    Some considerations to undertake:

    1. Bear in mind the inherent strengths of each system. An accounting package exists to sort through a company’s accounting and financial data. It tracks the financial activities of the firm, focusing particularly on accounts payable, accounts receivable and cashflow management.An ERP system expands upon these functionalities, promising oversight of an organization’s entire oeuvre of business processes. In its rich database resides the great bulk of a company’s story — including its finance, manufacturing, supply-chain and HR activities — with different functions drawing from different elements thereof.

    2. Does your organization regularly exchange large parcels of data with clients, or import in great volumes from overseas? You may find the sophisticated offerings of an ERP system more in line with its daily needs.

    3. Consider your patronage of spreadsheets. If you use them sparingly and specifically, an accounting system will probably suffice. If, however, they genuinely dominate the ongoing operation of your business and provoke in-house contention about which spreadsheet version is the best, consider moving up to the more accommodating embrace of an ERP system.

    4. Think carefully on the total cost of ownership associated with an ERP purchase. More than just up-front pricing and ongoing support fees, consider the fallout such a fundamental addition to your operation would have on the rest of your legacy systems, and its attendant costs. Critical here is the engagement of a vendor partner that can help an organization, new to the ERP space, to manage its purchase.

    5. Look to the future with clear eyes. An organization with enough confidence in future expansion may well find that the installation of such enabling scaffold from which to grow — at a point, maybe, when it is yet to specifically require it — simply makes sense.By contemplating plans for tomorrow seriously, managers of smaller businesses can position their technology to be a fundamental part of future growth, and sophisticated ERP software can play a big part in this.

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