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It is inevitable for all growing companies to reach a critical software junction where the spreadsheets used by the start-up can no longer handle the information needs of the company, and the walls are already covered with sticky notes and the whiteboard is overloaded. When starting research on what would be needed, you will find yourself faced with two different roads: choosing an ERP system complete with a manufacturing module or choosing the “lite” manufacturing solution compatible with your accounting software. Choosing which road to take is a decision that is bigger than software itself.
The Heavyweight: ERP Manufacturing Modules
ERP systems are the “all-in-one” monsters of the software world. An ERP system consists of a suite of applications including manufacturing, HR, CRM, payroll and financials.
The Good Side: ERPs include a single database. This means that all information will be centralized into one place, providing a “single source of truth”. For large companies with complicated international supply chain and their own IT department, an ERP system may be the perfect choice.
The Bad Side: Implementing an ERP system is extremely costly and time-consuming. In addition, the manufacturing module in an ERP is very generalized to cover all industries which means it may not suit the process of your business. Also, implementing an ERP system means you must replace your favourite accounting system.
Agile Contender-Lite Manufacturing Solutions
Then comes the “Lite manufacturing solution”. Lite solutions are specialized applications that are customized for smaller and midsize manufacturers (SMBs). Unlike full-scale ERP systems, which usually replace your current system, Lite solutions usually work in conjunction with them, typically with QuickBooks Online.
The Benefit – Efficiency and Speed. One of the key benefits of Lite solutions is their specialization. Since these applications focus on performing specific tasks, they tend to be more user-friendly for shop floor employees. Moreover, they can be rolled out within days or even weeks, instead of months. Most importantly, they will enable you to retain your financial management application and add powerful manufacturing functionality.
The Effectiveness – No Bloat. You only pay for what you need.
The Selection Process
Well, how would you decide?
Selecting an ERP Module When:
You are a huge company (> $10M turnover).
Have a complicated needs involving multiple entities or currencies which cannot be met by ordinary accounting systems.
Want a 6-12 months-long implementation process for all departments.
Consider Lite Solution if:
You are a growing manufacturer who has grown beyond spreadsheets but want to retain flexibility.
Satisfied with your existing accounting software and do not want to abandon it.
Require a solution that can be quickly deployed for immediate issues such as inventory management problems or job cost estimation inaccuracies.
Your shop floor employees should find the solution easy to use with minimal training.
Conclusion
The “Lite” solution option is more suited to many growing manufacturers. This is because it provides the necessary functions required for growth without all the expense and headaches associated with an ERP system. You are free to choose technology based on what makes sense for your business.
