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Many businesses that don't find traditional ERP useful are looking for project ERP. For enterprise software, this is a relatively novel approach to leveraging project management practices and capabilities. Project ERP is designed to provide a more comprehensive overview of company processes than traditional ERP. This type of solution is a good ERP for project companies such as construction companies or project manufacturers. Some service organizations may also find project ERP useful.
Project ERP vs Traditional ERP
Whereas traditional ERP systems focus almost entirely on manufacturing and accounting, project ERP software provides a true end-to-end solution for project companies. For manufacturing companies with simple processes, traditional systems are a good choice. They provide the tools needed to manage direct production and overall finances. But for companies with many departments and other moving parts, traditional systems cannot provide the comprehensive analysis needed to be highly competitive.
In fact, before the rise of project ERP, many companies started working outside of the ERP platform, aggregating reports for the entire project. Companies use spreadsheets or other disparate systems to record past milestones and timelines, order fulfillment strategies, and execute other types of complex planning.
Project ERP provides the capabilities needed to manage the above tasks in one system. Since many different functions are managed by a single system, project ERP can collect and analyze data for all these processes. This enables users to track metrics such as labor costs, customer retention, inventory turns, and more. Greater visibility into these metrics improves the project company's ability to plan ERP projects, assess progress, and collaborate.
That being said, many ERP vendors today offer separate software modules that focus on a specific aspect of your operation. This allows buyers to configure their ERP software as needed, rather than buying an inflexible but fully packaged system. A modular ERP system enables companies to gain as much insight into their operations as needed. This means that companies can configure the system to focus solely on manufacturing, or they can take multiple modules to build an inclusive system. ERP modules make the difference between projects and traditional ERP systems slightly less pronounced.
Key Features of Project ERP
One of the biggest additions that Project ERP brings is the emphasis on people. This shifts ERP from a system that only focuses on the manufacture of tangible goods to one that also includes services (and the people who provide them). The era of manufacturing has given way to a time when people—as agents of sales and transactions—are essential to every business. To better accommodate this transition, Project ERP consists of several distinct components:
Project Accounting allows users to view project-level financials. These tools allow your accountants to record costs and revenues associated with different projects on a daily basis. This makes your financial reports more useful and provides insight into your operations.
If a project doesn't meet its milestones on time, you can quickly review project accounting records to see if the project is under-resourced. Or, you find that your company is spending more than the average project, which prompts you to re-evaluate the project. Project accounting can help you gain a more granular view of the financial health of your business, allowing you to focus on the most problematic areas.
Human Capital Management (HCM)
This component of a project ERP typically consists of recruiting, training, payroll, and time tracking and attendance tools. HCM can be used to understand the history of an individual employee, but when incorporated into an ERP, the tool can also reveal larger HR trends. These trends can be described in a number of ways, including visual reports such as graphs and charts.
This helps project leaders specify workloads for specific projects. The tool can help users see if teams are particularly busy at a particular time of the year, and it can even provide workforce forecasts. This visibility is useful during enterprise resource planning, project planning and resource management. It prevents your business from taking on too many new projects while reducing periods of low productivity when your resources are tied up.
Supply Chain Management
This type of ERP provides item manufacturing software for better management of iterative supply chains. Newer ERPs not only focus on production, but also provide end-to-end management of the supply chain to gain a better understanding of a product's life cycle. First, modern ERP systems feature advanced Supply Chain Collaboration (SCC) software that makes it easier to work with your business partners. SCC provides a space for all parties to centralize resources and communicate within the ERP system. Transmission of all important information through a single channel helps prevent misinformation and loss of information.
In addition, SCM capabilities can help users understand the entire supply chain. This is done through tracking tools such as barcodes, RFID tags and serial numbers. These tools give you insight into where inventory and equipment are at each stage of the supply chain. This can further assist resource management as you now have a very specific understanding of where tangible components are used.
In addition to real-time location tracking, project ERP software can also provide analytics and forecasting. Demand forecasts are especially useful for project organizations because they support production planning and resource management.
Customer Relationship Management (CRM)
Managing your client relationships is critical to project business. CRM tools provide users with complete customer data and history. This includes previous conversations, pitches, and purchase history. Additionally, many CRM tools provide customers with a designated portal that enables them to communicate directly with your team. Instead of trying to keep track of dozens of email threads, a CRM customer portal allows your team to manage and query all customer-related issues in one system.
Also, CRM software is especially good at managing marketing campaigns if you choose the right solution. The tools involved in marketing management allow users to create campaigns while tracking the progress of potential and current customers throughout the sales cycle. When planning your next project, knowing where your prospects are dropping and the types of customers who tend to come back is invaluable.
Project Management (PM)
Much of the benefit of a project ERP system should come from the system's ability to centralize and integrate different processes. However, some systems also provide generic PM tools to further aid project organization. One of the most popular charts is the Gantt chart.
These are visual reports that communicate project timelines in relation to available resources, overlapping projects, and milestones. It lets users know which activities need to be done in what order, who is involved, and what other tasks they will be working on concurrently. PM tools also enable users to manage invoices, billing, proposals and contracts to optimize the collection process. The best project ERP software systems should offer a lot of flexibility in these tools, accommodating different payment methods and schedules.
A message from the 8Manage team: To find the right solution for your business, we recommend checking out 8Manage FAS, which takes information out of silos and puts it into a centralized system that can be analyzed holistically. Integration is key to 8Manage, which can take previously separate programs such as CRM tools and manufacturing shop analytics tools and bring them together for cross-departmental assessments. Most importantly, 8Manage FAS provides a set of tools to help managers work from start to finish and bring together corporate functions.
Acknowledgments: Most of the above information is from https://www.selecthub.com/enterprise-resource-planning/project-based-erp/except for some discussion about 8Manage FAS.