We will show you the most exciting functions of Enterprise Resource Planning software for large companies and pay particular attention to when choosing ERP here.
What exactly is the difference between large corporations and SMEs? Apart from the size of the company, the list of different business processes is quite long. Ultimately, the requirements for a corresponding ERP system are pretty high.
Special Requirements Of Large Companies
At this point, we want to look at ERP systems that have been specially designed for large corporations. On the one hand, it is about the particular functions that have been developed for the large companies and the many other requirements around the nature of these companies.
First, however, let’s take a look at the general workings of ERP systems. This should help us precisely understand the requirements of large companies in the field of ERP systems.
What Is Enterprise Resource Planning? – A Definition
ERP stands for Enterprise Resource Planning and describes the entrepreneurial task of using all the resources available to the company in the best possible way. Therefore, it is about the administration, organization, monitoring, and control of all processes and supplies these with the necessary resources.
All Resources At The Right Time In The Right Place
It is essential to use materials, tools, machines, personnel, financial resources, etc., in such a way that a maximum operating result. All processes are put to the test and, if possible, optimized.
In this way, uneconomic processes are to be uncovered and renewed. Since modern companies have a confusing variety of techniques, ERP systems are used, and the planning, control, and monitoring of these cannot be realized without help.
ERP Systems Centralize All Processes
These are software applications that map all processes of a company and merge them into a central database. In this way, all functions are initially visible, and the status of the respective process can also be viewed by all parties involved.
This centralization of processes creates various automation and thus accelerates the entire business process. Information is shared faster and is more consistent in itself because everyone accesses the same data.
Development Of ERP Systems
ERP systems are usually structured in different modules, carrying other functions for solving and supporting specific tasks. For example, the following modules can be found in a standardized ERP system:
- Business Intelligence
- Customer Relationship Management
- Document Management
- Human Resources Management
- Installation and maintenance
- Professional Services
In addition, however, many more modules are integrated depending on the industry and the company’s size. A vital module is, for example, that of production. Since not every company needs this, it can be found in industry-specific solutions for a while.
The History of ERP Software
ERP systems have been around since the early 1960s, or as MRP systems (Manufacturing Resource Planning). Initially, these applications were used almost exclusively in large companies before the market expanded to smaller companies.
First MPR Systems, Then ERP
Often these MPR systems were created by car manufacturers and the defense industry itself. It was not until the beginning of the 90s that more and more functions were integrated, such as finance and accounting functions or personnel and asset management, etc.
The focus was no longer only on production, which led to more and more companies from different industries liking such software applications, which helped make their processes leaner.
Small And Medium-Sized Enterprises Attracted Interest
In addition to large companies, many small and medium-sized companies also benefited from ERP systems created especially for them. The market grew steadily and is still thriving today.
Individualization Is Progressing
More and more new possibilities and more and more specifications enable companies today to make highly individual adjustments to their ERP systems. In this way, they can be perfectly adapted to the needs of any company.
But what are the needs of large companies? What do their ERP systems have to do, and what specific tasks do they cover? At this point, we want to get to the bottom of this in more detail.
ERP Software For Large Companies
Large companies are all those that exceed specific company sizes in terms of the number of employees, the balance sheet total, or even turnover times. This is based on various definitions. For example, it assumes that a corporation is considered significant if at least two of these three requirements are met:
- Total assets after deduction of deficits exceed 20 million
- Sales revenues in the twelve months before the reporting date exceed 40 million
- On average, more than 250 employees were employed for the year
There are also various other classifications, which differ, for example, from industry to branch or assume a minimum number of employees of 500. For the sake of simplicity, let’s keep it with the former definition.
Unique Challenges Of Large Companies
Compared to small and medium-sized enterprises, large companies have some unique features. The farm size effect is especially noticeable here. Large companies can produce more cost-effectively than SMEs. In mass production, fixed costs per unit become smaller as capacity utilization increases.
Increase Capacities And Find The Optimal Price
Such a cost reduction can also be achieved by increasing capacities. Here, a particular challenge of large companies can already be recognized. Pricing and its underlying production must also be reflected in a corresponding ERP system.
Different Laws And Regulations
Large companies also work internationally for a while and have to fulfill corresponding tasks here as well. They consider many different legal bases, through differences in the sales markets to other production conditions, etc.
ERP Systems For Large Companies
Let’s take a look at ERP systems and their possibilities for large companies. We have already dealt with the structure and general functioning of ERP systems. Now, however, other areas need to be covered with an ERP system.
Requirements With Under Enormous
We want to look at a few of these modules, particularly important for large companies, and focus on how they work. It is not so much a matter of approving these modules’ assets but highlighting the possibilities of ERP solutions.
Research And Development In Large Companies
Large companies usually maintain their research and development departments, constantly working to improve existing products and develop innovative new products. Project work in research and development is characterized by complex requirements in holistic project and financial planning.
Information Flow Must Be Guaranteed
This requires a dynamic provision of all information from different areas. Target-actual comparisons of budgets or requirements of investors must be taken into account and converted into reports. ERP systems can automatically generate such reports at various levels and regular intervals, daily or weekly.
Mapping Projects In The Long Term
Project controlling is also supported with various functions. In this way, even long project durations can be mapped, and these can also be evaluated and evaluated about hard and soft facts.
Many Other Functions In Research
Other functions at this point include comprehensive resource planning, targeted milestone management, and holistic information management. By connecting all modules, all research and development results can be easily transferred to other systems, such as CRM.
Internationally Active Companies Need More
If a company operates internationally and maintains subsidiaries or production facilities abroad, these must, of course, also be connected to the ERP system. However, it is also essential to comply with the local legal provisions.
Data Protection Under Different Requirements
For example, other countries often have different regulations regarding data protection, and other tax laws also complicate everyday processes. For example, international companies need an ERP system adapted to various legal requirements and still guarantees workflows.
Multilingualism Must Be Given
The ERP system also needs to be multilingual. For this purpose, translators must be able to quickly and intuitively translate all relevant texts into other languages, and the system’s interface should also have different language outputs.
Workflows Across Company Boundaries
Another point for international companies concerns the creation of uniform workflows and data. For the processes to run optimally, the same conditions must be created on both sides.
Production Modules For Large Companies
Large companies often have their production, which must also be covered in the ERP system. Numerous functions have to adapt perfectly to the respective production processes.
CAD Integration Is Important
Whether contract manufacturing, production planning, or targeted supplier management, the functions mapped in a production module can be almost endless. CAD integrations have also become increasingly important in recent years.
CAD allows the user to create digital design drawings in 2D, but also in 3D. In conjunction with the data from the ERP system, key figures can be easily transferred to the model and can now be used in the model.
Guarantee Consistent Quality
Targeted and comprehensive quality management ensures that products or services are consistent and find their place here. Errors in production can be detected directly and corrected at an early stage.
In this context, machine learning always plays a more critical role. Production plants connected to the ERP system can be in good time before wearing parts have to be replaced, and create a corresponding work order in the ERP. In this way, the production processes are not disturbed, and there are fewer failures.
Product Configurators Are Increasingly Important
Recently, product configurators have also become increasingly important. In times of increasingly individualizing markets, production must also continue to adapt. From self-designed shoes to your name on beverage cans to particular components, etc.
Conclusion – Large Companies Have Extensive Requirements
The range of requirements of large companies for an ERP system is far higher than that of small and medium-sized enterprises. In addition to the modules listed here, many other areas have to be covered with an ERP.
Logistics Significantly More Complex
For example, logistics modules or extensive warehouse management are crucial for large companies, especially if several warehouses are in different countries. Here it is essential to plan and control holistic logistics.
Adaptation To The Company, Not The Other Way Around
ERP systems must adapt to the business processes of large companies. Unlike smaller companies, which can adapt to the ERP system in many places, a complex production process, for example, cannot simply be adapted to the ERP.
Focus On The Right ERP Partner
Therefore, large companies must always find the right partner who can adapt the system to deliver optimal results when choosing a suitable ERP solution. Therefore, many system houses that specialize in large companies are also active and networked worldwide and can support production facilities and subsidiaries abroad in the best possible way.