How ERP can improve project management in business
ERP systems are used in many businesses today but the full potential of this system is not always realised. One area where ERP systems are valuable in business is project management. Here’s a look at how.
Enterprise Resource Planning (ERP) explained
ERP allows for the integration and automation of business functions to enhance effectiveness and put a business on the path to success. An ERP system is specialised business software that has been designed to record and manage vital business data, including customer orders, scheduling operations, financial data, and inventory.
ERP system features for business
Here’s a look at some of the key features of ERP systems that make them such valuable systems. These include:
- Integration – a fully integrated platform for analysing and conducting data-driven tasks.
- Automation – automate daily business tasks including orders, payroll, accounting, and invoicing.
- Data analysis – find trends and patterns in business processes to assist in future business decision making.
- Reporting – vital business tools such as customisable dashboards and visual representation.
- Customer relationship management – tracks customer details and allows companies to use this for better customer relations.
- Accounting – management of accounts and tax-related documentation.
- Tracking and visibility – supply chain visibility including material tracking from raw material to delivery.
Project management explained
In terms of business, project management is the application of processes, methods, skills and knowledge to achieve project objectives within time and budgetary limits. The major indicator of project management specifically, is the allocated timeframe given to the delivery of products or services.
How ERP systems assist project management
To achieve the goals of project management, businesses are well-advised to turn to ERP systems to facilitate the process. Here’s a look at the various ways ERP systems work in project management.
1. Project planning
ERP systems are able to assist in project planning from the get-go. In the planning stage, ERP can be used to update tasks with project-specific details, consolidated on one database for ease of use. This task management can include everything from task segregation through to definition. ERP will then allow for advance planning to ensure deadlines are met; sequentially align tasks; and then record tasks accordingly.
2. Monitor costs of project management
One of the biggest risks of project management – outside of missed deadlines – is overstepping the project budget. ERP systems enable projects to be assigned a specific production job number so that all related project costs are consolidated in one space. This can keep track of aspects such as labour hours, subcontractor and material costs and purchase orders to monitor all associated project costs.
Using ERP, project managers can define budgets, record funds, classify billable and non-billable projects, and combine all expenses using real-time data. Because ERP is extremely flexible, the tools can be adapted for each project.
3. Performance tracking
An important part of project management is performance tracking which can be accommodated through ERP systems. Using this functionality, risks can be identified swiftly and resolved, and areas for improvement acted upon. Tracking includes recording project details such as milestones and resources; mapping and comparing outcomes; as well as analysing project pitfalls and resolving them. It’s important not to lose focus on the fact that all transactions and recorded information are people-related. ERP provides real-time information so that corrective actions can be taken as a matter of urgency.
4. Business Intelligence
ERP comes with Business Intelligence (BI) tools that can prove to be incredibly valuable in project management. Through BI, project milestones can be clearly outlined with achievable dates included as a guideline. Using project identification codes, costs and benefits can be monitored and a detailed project analysis enabled for immediate management review.
5. Improve project profitability
Through thorough budgetary analysis, project managers are able to carefully examine the profitability of each expense-related decision using ERP systems. The planned expenses can be carefully assessed and compared, and the future expenses forecast using real-time data. By including this information, thorough reports can be created and a record maintained for future reference and accountability.
6. Unique orders
For businesses that need to customise orders for a specific project, then ERP systems can assist with this particular project management tool. ERP supplier management tools can help with the co-ordination of resources so that the project is carefully managed despite using multiple sub-contractors.
Elements to remember when using ERP for project management
It’s evident that ERP can vastly improve project management across a number of sectors, so if you’ve decided to implement this strategy, then here are some key considerations:
- Manage any changes – within a project, the roles of those involved will undoubtedly evolve, and it’s important for the project manager to keep on top of this. Using ERP systems, these changes can be recorded and updated easily.
- Project requirements – these need to be carefully itemised before incorporating ERP systems in project management. Aspects such as software functionalities, project differentiation, and system access are important.
- Adequate training – an industry professional will need to train all relevant parties in the use of ERP systems for this specific project.
Benefits of ERP systems
Once established, project managers will begin to see the benefits of using ERP software in project management. These will include improved accuracy; enhanced profitability and sales; avoidance of costs; management of risks; achieving deadlines; optimised equipment use; and improved customer satisfaction overall.
By working with a reputable ERP software supplier, businesses are able to leverage the project management benefits of this progressive system while enjoying ongoing support and guidance. Check the supplier has industry experience as well as a proven support team that offers a personal touch.