Excel spreadsheets are often a company’s first foray into the world of data aggregation, management and forecasting. In this way, Excel, often paired with Quickbooks, is a first ERP system of sorts for many. There are benefits and drawbacks to using Excel, either as its own solution, or paired with other tools or ERP systems. As a company continues to grow in the marketplace, they often get to a point of asking: Is it time to upgrade from Excel to ERP?
Here are some considerations...
The Benefits of Excel
Many companies run their data through Excel for good reason. It’s simple to use, easily shareable and customizable. Most everyone in business, knows how to use Excel -- no special training required. The simplicity of using Excel, is much like the ease of customizing it. There is no shortage of affordable experts worldwide that can create custom formulas, reporting and templates for many of your company department’s needs.
When it comes to collaboration, sharing Excel data and files is also easy. Anyone can hop into a shared Excel file, access the data, and use it for their needs. Easy sharing can mean security issues with data. Excel may not be able to manage more complex processes, such as inventory management, or workflow, in real time.
The Benefits of ERP
Workflow optimization is one benefit of ERP. For example, inventory information is used by sales, accounting and other departments. Accessing and using data with Excel means lots of email sharing, exporting, importing and manual entry. With ERP, all that is eliminated as data is pulled in real time from one single, secure and up to date source. This not only minimizes error and omissions, but makes the data more reliable and useful across all departments and for operational and forecasting purposes.
This single source of interconnected data also allows modern ERP systems to streamline operations by building in useful functionality, such as emailing automated reports on a schedule or notifying key employees about incoming supply shipments or supply issues.
But what about the user training required for an ERP system? Typically training classes are available but vary in terms of class format and delivery, location and frequency. Timing of education is important; you want your users to remember how to complete transactions but have time to consider possible exceptions from the norm. Successful implementations result from more than just attending educational classes. Users should have access to the software before it goes live, to re-enforce their training and experiment with unusual transactions. Ask your software vendor about creating a “sandbox” for your users and structuring a conference room pilot.
The primary reason companies eventually switch from Excel to ERP is operation efficiency, security and business intelligence. Data housed on individual PCs, held by gatekeepers across departments and in different formats slows down operations, leaves too much room for error and risk, and keeps real-time information out of reach. At some point in a business’ life cycle, companies find themselves outgrowing Excel.
Making key set-up decisions are mandatory for success. Experienced consultants can help the project team make informed decisions lessening risk and costs associated with experimentation during a system implementation. Your staff understands your business; they are not experts in implementing ERP software. With proper training and care in implementing the business processes, a company can realize significant cost savings from an ERP system
Do you feel your company may be outgrowing Excel’s usefulness? Give us a call at Parallel Solutions at (440) 498-9920 to talk about the different options available for your growing needs. You can also download our free resource checklist, Questions to Ask Before Buying an ERP System.
Mary Jo O'Neill