Are you wondering what an ERP really means for your business?

Introduction

With over 30 years’ experience building industry-specific software for over 25,000 customers globally, we were surprised to learn that many of our delegates don’t know what an enterprise resource planning (ERP) system is. That’s despite nearly half (47%) of all companies worldwide using the technology to streamline operations, automate processes and cut costs. 

You might have actually been using an ERP system without knowing – maybe you call it your ‘business software’ or ‘the system?’ 

ERP software pulls all of your business processes like HR, accounting and production into a single system to offer visibility into your operations, create a single source of truth and improve communication between departments. It’s made up of different modules for each business process that have advanced functionalities. For example, a bill of material (BOM) management function contains the amount of materials and parts needed for production.

An ERP system provides a bird’s eye view of your operations with access to real-time data through a dashboard, so you can automatically generate reports, identify bottlenecks or trends. It also eliminates the need for standalone software for functions like accounting or planning. That said, existing software can be integrated within your ERP system. For example, it’s easy to integrate payroll software into the ERP system so that your HR team doesn’t need to manually add the data.

Without an ERP, you may experience:

• Slower processes
• Less efficiency
• Errors
• Communication challenges
• Difficulty scaling
   

Many companies implement an ERP because they want to save time and money. Research shows, following implementation, 95% of businesses notice substantial improvements to operations.

The ERP market

Experts have predicted there are over 138,000 manufacturing enterprises in the UK and in 2023 it was ranked as the 8th largest manufacturing nation in the world. 

With around 2.86m manufacturing enterprises in 2024, the EU is also excelling in this sector - retaining its position as the third largest region in the global smart manufacturing market. The industry is certainly competitive but the UK manufacturing market continues to grow because of demand. 

Solutions like ERP systems help to improve efficiency and productivity so manufacturer’s can increase output and maintain a competitive edge. Furthermore, as the smart manufacturing market rises, ERPs will become all that more important to drive digitalisation and manage operations. 

The ERP market is huge – and that’s not an understatement. Experts have predicted the ERP global market size is valued at USD 81.15bn – and that figure is expected to grow rapidly by 13.8% by 2032. The manufacturing industry is the top user of ERP systems with almost half of ERP users being manufacturing companies. This is followed by distribution and logistics, and retail. But ERP is used across industries including the IT sector, financial services, distribution, public services and healthcare. 

Digitisation and the rise of smart factories have also made ERP systems more important. The data collected by the software could eventually be used to train artificial intelligence (AI) and machine learning (ML) models, allowing you to make predictive decisions and automate more tasks.

What is an ERP and why is it important?

What it is:

• Single system combining business processes
• Essential for automation and digitisation
• Single source of truth

What it isn’t:

• Too expensive for small and mid-sized businesses
• Difficult for staff to learn
• A replacement for staff

Survey insights: The UK’s attitude to new software 

We wanted to find out more about attitudes to new software in the workplace, particularly ERPs. So, we commissioned a survey asking 200 people based in the UK their thoughts and experience with business software. 

According to our research, 69% of adults in the UK don’t know what an ERP is, despite 38% recognising that their employer uses business management software for processes like finance, customer management or HR.

• Nearly 70% don’t know what an ERP is;
• Only 38% recognise that their employer uses business management software;
• Almost 85% would be open to using new software.

When it came to new software in the workplace, 30% cited security as a top concern, followed by difficulty to learn (25%) and change (12%). Despite concerns around resistance to change, 85% of survey respondents actually said they would embrace and be willing to try new software. Almost a quarter of respondents would want the software to improve efficiency and over one fifth want it to be easy to use.

A brief history of ERP systems

• 1960s - The first material requirement planning (MRP) system was created to improve production management.
• 1970s - Larger companies began developing and using MRP systems.
• 1980s - This software became known as MRP II with its advanced features.
• 1990s - MRPs become ERPs. Gartner introduced ‘enterprise resource planning’ to describe a system covering multiple sectors and processes.
• 1998 - As cloud computing developed, ERP shifted over giving access to the system over the web.
• 2000 - Gartner published an article introducing ERP II – flexible software that integrates with other systems.
• Today - Organisations today rely on ERP systems to streamlining operations, support automation and digitisation.

Digital transformation

Until recently, factories relied heavily on paper records and physical labour, and communicated with suppliers or customers through phone calls. As we know, that isn’t the case today and if it was, lead times would be substantially higher and we would make more mistakes. 

As technology advanced, so has the digitisation of factories. We are actually in the fourth industrial revolution, industry 4.0, where technology like cloud computing and AI is integrated into manufacturing processes to boost productivity, efficiency and safety. For example, robots can take over dangerous jobs like handling hazardous materials. 

Factories fully embracing the new technology are known as ‘smart factories,’ but equally small and medium-sized enterprises (SMEs) can also transform operations by using the technology in key areas. For example, an ERP system helps modernise your factory because you don’t have to rely on paper documents when they are uploaded into a single system for all the relevant teams to access. 

The global smart factory market is valued at USD 100.6bn in 2024 and this is expected to grow to 164bn by 2029. New technologies are driving growth and manufacturers are more focused on automation, data exchange and real-time analytics,  to boost productivity. 

While SMEs may not be ready to invest in new technology just yet, an ERP system lays the foundations if you want to do so in the future. But before we get into that, here are some of the ways new technology can transform operations:

Artificial intelligence (AI)

Modern manufacturers are using AI to speed up production, improve quality and predict demand. For example, predictive maintenance models have been transformed by AI because it can analyse large volumes of data at speed. The predictive maintenance results can be presented in an ERP dashboard – or alerts can be set up with a workflow – so manufacturers know if equipment is at risk of breaking down or needs a service. This helps prevent downtime or bottlenecks caused by machinery faults.

Machine learning (ML)

Where manufacturers are developing strict environmental, social and governance (ESG) strategies, new technology like machine learning can analyse energy or water usage to help you cut down. It can also be used to improve the quality control process because pictures of damaged goods are fed into it so it learns what a product shouldn’t look like.

Internet of things (IoT)

With IoT, connected devices like smart shelves can detect when you’re running low on materials or products – it’s automatically reordered if stock is low so production isn’t disrupted. Sensors can also be added to equipment to monitor things like temperature or pressure. Machines can also be operated remotely. That means manufacturers can control machines from the other side of the planet, as long as they have a device and internet connection.

Robotics

Although there are a lot of misconceptions around robots, they are common practice in factories and incredibly useful for repetitive tasks. Think of an assembly line. How long would it take humans to put components on it one after the other, not to mention the strain on their bodies? Robots handle tasks like that with ease and they do it way faster, speeding up production, saving on labour costs and improving safety.

Where does your ERP system come into this?

ERP systems play a huge role in the successful rollout of new technology. It means you can centralise all of your data, standardise and automate processes, and get full visibility into operations. 

New technologies are often data driven, so they rely on good quality data to be effective. Managing the data in your ERP system is a good place to start. It contains high-quality master data, so teams across the company have access to a standardised dataset to make evidence-based decisions or generate reports. 

Without an ERP system, you would need to use separate tools to manage and store information which could result in data silos. The data in an ERP system is also secure and backed up in the cloud.

There is lots of new technology on the horizon like blockchain and digital twins. These are in the experimental stages, but they could be adopted in factories over the coming years. With industry 4.0 well underway, we are seeing the birth of industry 5.0 where humans and machines work in collaboration. A few manufacturers are already ahead of the curve but once developed, it’s likely to be a gamechanger for SMEs.

“Industry 5.0 focuses on combining human creativity and craftsmanship with the speed, productivity and consistency of robots.”
Source: The University of Manchester

How to choose your ERP

1. How do you want the ERP system to serve you?

   Identify all of your business processes, and which modules and features would fit them best. Work out exactly how the ERP system will contribute to your goals.
    

2. Strengths and weaknesses

   Evaluate your business. What processes are efficient or lacking, and where could an ERP system support it?
    

3. Get researching

   Research ERP vendors who have experience and expertise in your sector. Consider your budget, the implementation process and training available. Read reviews and case studies.
    

4. Ask for more information

   Don’t hesitate getting in touch with an ERP provider. Ask lots of questions about implementation, customisation, security, modules, training and scalability to help you come to a decision.
    

5. Selection time

   Pick the ERP system best suited to your goals and needs. Will the vendor work with you to ensure a seamless implementation?
    

6. Roll it out

   Working with your ERP provider, create an implementation timeline and plan highlighting key milestones, testing and training.

ERP myths busted

Technology will take my job

That is absolutely not the case because ERP systems are designed to make your job easier, not take over. It automates processes so you can work on more important tasks and learn new skills like data analysis.

My team won’t be happy with the new tech

As long as you explain the benefits and value of your new ERP solution, your employees should get on board. Speak to an ERP vendor to find out how they can help with staff training and implementation.

I’m an SME so it’s irrelevant

Wrong! Technology isn’t reserved for big organisations. Even small technological upgrades like a cloud-based ERP, will help you modernise and improve operations.

The new tech isn’t in my budget

While it may have a high upfront cost, ERPs help you cut costs and increase productivity so you can take on more work. Automating the quality control process will reduce the amount of waste you produce too.

Implementation is a hassle

ERPs are designed to be user-centric and the implementation should be done in steps to prevent disruption. As long as your provider is supportive and experienced, implementation should be a breeze.

Five benefits of an ERP system

1. Efficiency

   Manufacturers can automate tasks like data entry and ordering, which saves time and prevents overstocking. Ridder iQ has a production planning module that enables you to generate orders automatically and alerts you to any shortages or if deliveries are likely to be late. It can also generate reports like order forms or receipts instantly helping to save time. Greater supply chain management also means processes like manufacturing and procurement are more efficient so customer orders are quickly fulfilled.
    

2. Accuracy

   Because all of the relevant teams have access to the same data, there’s less likely to be miscommunication or errors. Decisions can be made confidently and with a customer relationship management (CRM) module, your email or calendar can be linked for greater efficiency. Not only that, the CRM app lets you view any tasks or information from any location which is essential to managing production. And integration with KnowledgeSync keeps you in the loop with alerts sent to your email or mobile. There’s also a PDA logistics application which contains your stock levels. Your team can use the barcode hour application to add stock to inventory keeping records up to date and digital.
    

3. Collaboration

   With real-time access to documents, teams can work together to create or edit them. This saves time chasing information and suppliers can even be given access to documents. It helps speed up the supply chain, especially with a project management module, that provides visibility into different processes like engineering and purchasing so teams can know if the project is on track. Shop floor control also improves communication between your team. They get a good understanding of the tasks assigned to them and then can complete it on the system once done, so you know if it has been done or if there were any issues. The system also has a location management application, so your team can easily find materials that they need saving time tracking them down.
    

4. Compliance

   With an ERP you can automatically generate reports and it keeps track of changes to maintain an audit trail. ERP workflows tend to be set up so that only authorised staff members can access data. Documents like drawings and manuals are always accessible in Ridder iQ – and it comes with a traceability function so you can identify things like production errors right away. This is especially helpful for creating digital passports for products which are becoming legislation in some sectors.
    

5. Cost savings

   With an ERP, you can analyse financial data to find out if you’re overspending and generate financial reports for stakeholders with ease. Greater efficiency and productivity leads to cost savings over time and gives you the opportunity to boost revenue with more work. Ridder iQ helps to reduce lead times because it predicts how long it will take to manufacture a product. Its calculation and bill of materials (BOM) functions means you can also predict costs more accurately to set a competitive price point.

A few facts about Ridder iQ

• Many companies are using FINANCIAL PROCUREMENT Ridder iQ to transform operations.
• Developed in 1982, Ridder iQ continues to meet the demands of manufacturers today.
• Supported by the latest software tools like .NET, C#, and Microsoft SQL.

Ridder iQ modules

• CRM
• Costing
• BOM (integrated with your CAD software)
• Work preparation
• Purchasing
• Inventory management
• Production planning
• Document management
• Reporting
• Financial

Step by step guide to ERP implementation

You might be worried that implementation of your ERP system will fail. And if you haven’t made your goals clear, planned well or trained your team, it won’t put you in good stead. 

But that doesn’t have to be the case. As long as you choose the right ERP provider and product, implementation should be straightforward. ECI supports your implementation from the very beginning to the end – and the support doesn’t stop once it’s successfully rolled out. You will have a dedicated account manager on hand to help with training and to oversee the project, and can chat to a support team every week virtually or on-site. 

Implementation is different for every company. So, working together, we put together a tailored implementation plan for your business with a timeline including the following touchpoints:

• Blueprint
• Milestones
• Data migration
• System set up
• Review
• Testing
• User training
• Go-live planning and support

Step 1: Query

Typically companies get in touch with us after discovering operational challenges that are preventing their growth. Our first step is setting up a discovery call where we find out more about the business, its processes, goals and pain points. By the end of that first call, we are usually in the position to determine if we have a solution or not.

Step 2: Demo

If we find that our software can solve their challenges, the natural next step is to move onto a system demo. Our demos can be in-person or virtual, whichever suits the company best.

We have two different types of demo: 

1. Look and feel

This is a high level and short overview of the ERP where we take a quick walk around its menus, tables and most commonly used features. The idea of this demo is just to give you a taste of what the ERP can offer and how it can fit within your business.

2. Tailored demo

With the tailored demo, we demonstrate how it can help specific business processes. For example, we’ll visit your finance team to show them how to raise invoices, purchase orders or request payments. Or we might head over to your production team and ask for their BOM or customer list. We’ll then demonstrate how this data can be used in real life. We’ll also show you how we can fix challenges with processes like inventory management.

Step 3: Blueprint phase

The planning or blueprint phase is the first phase of our implementations. By this point, we already have a rough idea of the implementation project but creating the blueprint will help to clarify and make sure both parties know what to expect. We look at your goals, how your current processes would fit within the system and how your challenges would be solved.

Step 4: Collaboration

Once the plan is set, we get on with tasks like data migration, system configuration and installation. This is where the project becomes more of a collaboration.

Step 5: Testing and training

We hand it over to you to test the system and share the results. If you have any issues or concerns, we then address these. We also give you training to complete, and tasks to practise such as scheduling jobs or raising sales orders.

Step 6: Go live

The system is then ready to go live. It normally takes a couple of days and we like to be on site with you to check it’s running smoothly, answer any questions and of course, to celebrate.

Step 7: Post implementation

Selecting and implementing an ERP doesn’t happen overnight. As the trusted advisors, we are here to be a guide over every step of the process.

Five tips for successful ERP implementation

1. Do your research

   When finding an ERP provider, check their security credentials. Cloud-based systems like ours are especially suitable for SMEs. We handle cyber security, disaster recovery and protect customer data, whereas SMEs might not have the resources to handle that in-house.
    

2. Set your expectations

   Get a clear idea of what you want the system to do. For example, if you’re a manufacturing company, does it support your manufacturing vertical? Can it solve the issues that you’re facing? What return on investment (ROI) are you expecting? At ECI, we are very clear on what businesses our solutions can and cannot support. If at any point we discover that our solutions aren’t a right fit for your business, we are the first ones to speak & often recommend suitable alternatives.
    

3. Beware of hidden costs

   There are a lot of ERP solutions out there with low initial investments and this can look attractive. But show diligence and check the provider is upfront with all ongoing extra fees, so your implementation costs don’t triple down the line.
    

4. Opt for a scalable solution

   Implementation can be challenging which is why it’s important that you don’t do it multiple times. Systems that aren’t scalable don’t support growth, so you might find yourself needing to implement a new system as your business develops. ECI Ridder iQ grows with you and is scalable.
    

5. Get your team involved

   If your employees are using the system to its full potential, your ROI will be better. Make sure that each employee is learning how to use the system and bring them into the buying process to keep them engaged. Ultimately, they will be using the software everyday so they’re feedback is incredibly valuable. I recommend getting as many people involved with the ERP selection process as early as you can.

Questions you were afraid to ask:

How can we support staff with change? 

Keep staff updated with changes and encourage continuous learning and development. Role-specific training can really help individual teams feel confident using the system, or a phased rollout can ensure you don’t overwhelm your team.

What are the common challenges when implementing ERP systems?

Resistance to change is common, so get your team involved at every stage and encourage them to be vocal about their opinions. Data migration is another concern but fortunately, that’s an easy fix. We spend time cleaning the data and can create a solution if a field isn’t in Ridder iQ. If the project goes over budget, that’s usually because planning wasn’t sufficient. That’s why we work closely with you to ensure that we’re on the same page.

What support can we expect from a vendor?

It’s important to understand your processes and learn how an ERP can support them. At ECI, we create a timeline so you know what to expect and we provide extra support for customers who have just gone live. We can solve any issues virtually to minimise disruption and offer monthly or quarterly check-ins, or a business review to check on your progress.

Your ERP dictionary

Automation: Technology can be used to automate tasks like data entry or packing without the need for human intervention. 

AI: Artificial intelligence (AI) is a computer system that can complete tasks and learn just like humans can. 

Blockchain: Blockchain technology stores digital records securely in linked blocks that are almost impossible to edit or delete once uploaded. 

BOM: Bill of materials (BOM) is a comprehensive list of the materials and components needed to create a product. It contains detailed information like quantities, item numbers and descriptions. 

CRM: Customer relationship management (CRM) is a module within your ERP used to manage relationships with customers and analyse data for segmentation or lead nurturing. 

Dashboard: Your ERP system should have an easy-to-use dashboard when you login, where you can view the latest data and insights. Workflows can be set up to create alerts for overdue orders or low stock. 

Digital twins: A digital twin is a virtual copy of a process or object used in manufacturing to create models, analyse data or predict system downtime. 

ERP: Enterprise resource planning (ERP) software is a single system that integrates your business processes like accounting, production or HR, with custom-built modules, to enhance operations.

Industry 4.0: The fourth industrial revolution, industry 4.0, represents a phase in manufacturing where technology is used in operations to improve speed, efficiency, productivity and quality. 

Industry 5.0: The fifth industrial revolution, industry 5.0, is an emerging phase of industrialisation where machines and humans work in collaboration to complete tasks drawing from each of their strengths.

IoT: The Internet of Things (IoT) is a network of connected devices that share and collect data. For example, devices like sensors are attached to machinery to predict when they need a service. 

Master data: ERPs contain master data – standardised information that’s critical to running the business. It might be customer or supplier information used across different departments. 

ML: A field of AI, machine learning, uses algorithms to learn from data, make predictions and improve performance over time. 

Modules: An ERP module mirrors your business processes with advanced features. So, for your supply chain you will have a supply chain management module to streamline processes like procurement and supplier relationships. 

Robotics: Through engineering and technology, robots are designed and manufactured to help with tasks like packing or loading. 

Smart factory: A smart factory is almost fully digitised and uses the latest technologies like AI, ML and IoT to meet its objectives quickly and efficiently. 

Supply chain management: This process includes managing all of the activities related to an order, from sourcing the raw materials to delivering the end product. 

Workflows: ERPs come with built in workflows to enable automation and standardisation. These are a sequence of steps created, but you can also develop your own.