Before we go any further, we need to talk about ERP. We’ll begin with what the acronym stands for: enterprise resource planning. ERP systems are designed to integrate an organization’s business information, including finance/accounting, customer relationship management, management accounting, procurement, human resources, budgeting, sales order entry, materials, and manufacturing.
It makes sense to integrate all these functions into one ERP system because it allows your company to establish business rules that will enforce critical processes. The whole idea is to seamlessly flow accurate and timely information between the different business functions. That gives leaders visibility into what is happening inside the enterprise, and a much greater control of the components of a business.
What’s an ERP like? Here are some key characteristics:
- There are transactional inputs.
- It has one central database for all information.
- Information is current (near real time).
- It’s modular in design.
- It features open system architecture.
A project-based ERP has all
of the above characteristics, just like any ERP. At its heart, though, it focuses all the processes and all the data on the company’s central revenue generator: the project!
Why Choose a Project-Based ERP
Project-based companies have their own distinct needs and requirements, (click to tweet ) and they must be able to view their business in three dimensions. They need to be able to see the nature of the expense, what resource performed the work, and the project for which the work was accomplished. But take that one step further.
Generic ERP systems depict the business as flat (see Figure 1-1). They can’t fundamentally understand the project dimension — they simply try to pancake over the top of the vastness with some level of project information. Projects are truly an afterthought in the system design, and the system requires customizations to make it operate with a project point of view. That costs big bucks upfront and results in a higher total cost of ownership.