Over the last decade, the vast majority of small and midsized businesses (SMB’s) have implemented one or more generations of Enterprise Resource Planning (ERP) systems to help manage their day-to-day business processes such as accounting, order entry and operations.
Distribution companies have typically augmented these systems with inventory control and warehouse management capabilities, while manufacturing companies have added bills of materials (BOM’s) and Material Requirement Planning (MRP I) or Manufacturing Resource Planning (MRP II) functionality.
During this time we have seen three distinct waves of business software implementations:
- In the first wave, most SMB’s were content to simply have the means to get their data (e.g., customer files, time estimates, costs, etc.) into the system correctly.
- With the second wave, the objective progressed into making sure the data reflected an accurate likeness of how things actually transpired (forecasts, planning parameters, shipping alternatives, budgeted vs. actual expenses, etc.).
- Recently, we entered a third wave of ERP implementations, characterized by a demand for access to and analysis of key information from the system in order to make better business decisions – Business Intelligence (BI). No longer the domain
of large companies with deep pockets, a growing number of SMBs, including manufacturers and distributors, want to be able to drill down into their data and extract information that an use to measure internal performance strengths and weaknesses. Thus, SMBs are increasingly utilizing BI to help identify areas of improvement that can lead to lower costs and increased revenues.