We’ve compiled a list of the most frequently asked questions that we hear when speaking with sales prospects and customers. Learn more about these topics and educate yourself on industry terminology to help your business make the right choice when searching for software.
ERP stands for “enterprise resource planning” and is essentially used to describe software that is designed to manage all aspects of a company’s operations including accounting, order entry and processing, purchase orders, quotes, invoices, inventory management, contact management and warehouse management. Unlike introductory software or software designed for one specific functionality (like accounting), ERP is a fully integrated solution where information from one aspect of the software flows through to information from other aspects. The system is designed to heavily automate processes across multiple departments and across multiple areas of functionality.
ERP software is characterized by a single database and point of entry, which eliminates the need for double entry. Although ERP solutions include functionality to manage the main business processes of any wholesale and distribution business, robust ERP solutions also provide advanced functionality such as: point of sale, lot tracking, landed cost tracking, eCommerce integration and mobile barcode scanning. ERP software is typically implemented once businesses have outgrown their introductory, standalone systems.
Cloud-based software is accessed via the internet and all hardware and servers required to run the software are managed and maintained by the software vendor and it’s IT team. Most cloud-based software systems charge a monthly (sometimes paid annually) subscription fee to access the system. This allows your team to access the software and functionality without the need to maintain expense equipment in-house. All IT maintenance, upgrades, data backups and security is taken care of by the software vendor.
On-premises software refers to software that is installed locally on your own hardware and servers in-house (or on-premises). This means you need a dedicated team of IT staff to continuously monitor your software and systems. On-premises software solutions require a large initial investment to purchase the software licenses and for implementation. It also requires that you budget for regular hardware upgrades. Because on-premises software requires a significant upfront investment and ongoing IT resources, many small-medium size companies choose a cloud-based solution instead.
For more information on installation methods, read our article: Cloud vs On-Premises ERP (bluelinkerp.com)
The term “cloud” is often used interchangeably with the terms “hosted” and “SaaS”, and refers to the software deployment method. Essentially, with cloud implementations, the client pays the vendor an ongoing “subscription” fee for access to the software (off-premises) via the Internet. The software lives on hardware and servers maintained by the vendor who then also manages upgrades and backups.
Landed costs are those sometimes hidden costs that are involved in making goods available for sale. This includes the total expenses incurred to purchase, transport and import goods from one place to another, within a country or across continents. Typical landed costs might include freight, duties, handling fees, insurance and other charges that, if ignored, would distort the cost of the product being sold. A landed cost will therefore involve the calculation of three main elements: the actual cost of the goods; transportation and insurance; and other government fees assessed on the goods.
Lot tracking, or batch tracking, allows for product traceability to keep track of which customers received specific groups (or shipments) of items and when they were received. The supplier and date these items were purchased are also tracked allowing managers to track an individual group of products (or shipment) from the supplier to their own warehouse and ultimately to the customer.
For more information on lot tracking, check out our blogs:
The enterprise software industry is typically divided into 3 different tiers and/or segments: Tier One introductory systems such as QuickBooks, Tier Two mid-market ERP systems such as Blue Link ERP and Tier Three, top-tier or Blue Chip solutions. Each different tier is geared towards companies of a particular size, with certain business processes a
nd future strategic plans. QuickBooks and ERP systems fall into different software tiers and therefore are not directly comparable. The relationship comes from the fact that once a businesses grows out of a tier one solution (such as QuickBooks), the next logical step would be to implement a tier two or true ERP solution.
QuickBooks is designed to manage one main aspect of your company’s operations – accounting – whereas ERP software manages functionality across multiple business areas including accounting, inventory, contact management, warehouse management, purchasing, eCommerce and more. ERP solutions provide much more advanced functionality right out of the box such as multiple units of measure, multiple company and location management, and multi-currency. They also do not have limitations when it comes to transaction volume, number of users or database size.
The cost of ERP depends on several different factors, and so the answer will vary by company. Most ERP solutions price based on number of users, functionality, implementation services and deployment method (whether you want a cloud-based or on-premises solution).
No matter which deployment method you choose, there are specific factors that contribute to cost. These include license fees for on-premises implementations and monthly fees for hosted/cloud, maintenance fees for upgrades and warranty, implementation fees for data migration, training and set-up, external consulting and customization costs, infrastructure upgrade costs and internal costs. With cloud-based solutions, infrastructure upgrade fees do not apply, as the software is hosted on the vendor’s servers. Sometimes components that are not usually included in out-of-the-box software packages are also available as needed at an additional cost, and can most often be added at any time. Examples include lot tracking and industry specific modules such as POS for retail operations.
For a specific example of what ERP will cost a medium size company, download our ERP Pricing Guide.
For mid-market ERP software solutions, a typical implementation takes anywhere from 3-5 months from the time a decision has been made and an agreement signed. In some cases this timeframe would be shorter (especially when dealing with small or start-up companies), and longer for much larger businesses. In general, software implementations take time based on data migration, training, configuration and the vendor’s schedule.
For more information on the specific tasks involved with each part of the implementation, visit our Implementation page.
EDI stands for “Electronic Data Interchange” and in it’s simplest form, is used to exchange documents between trading partners. EDI represents a set of standards, outlining formats for information that can be electronically exchanged between two parties. Essentially, EDI allows companies with different hardware/software systems to exchange business documents, sales orders, shipping information and other data in a common format. For example, it allows for easy communication between locations, for big-box retail stores it helps track and update inventory, it enables the sharing of information between vendors and distributors and can even be used to transmit financial information and payment in electronic form (Electronic Funds Transfer or EFT).
To learn more, read our blog article: What is EDI?
RDP stands for “Remote Desktop Protocol”, and is a Microsoft licensed technology. RDP is available for a large range of computers, tablets and other devices, including most Windows and Mac computers, iPads and iPhones, Android devices, and systems running Linux or Unix.
RDP allows users to use one of the above devices and then over the internet or a local area network (or both), connect to and run all kinds of software which physically resides on one or more servers somewhere else – and NOT on your computer or device.
Learn more about RDP and the Cloud
There are several different ways in which you can integrate your website with your ERP system, and this will depend on how much information you want to share between both systems, how often you want that information to be shared, and whether or not you are looking to implement a B2B website or B2C website.
Simply put, eCommerce integration is the coordination between a company’s eCommerce site and back-end accounting and inventory (ERP) system. Proper integration enables the flow of information bi-directionally between the two systems meaning data only needs to be entered into your ERP system once. Information such as inventory descriptions, images, pricing and product availability will flow between your back-end ERP and front-end website, and orders placed online will automatically populate in your ERP system for further processing. This results in various efficiencies such as inventory levels automatically updating in your ERP as product gets sold online and inventory updating at the front-end as product gets added into inventory. eCommerce integration also ensures sales order, payment and shipping information is automatically shared between your ERP and eCommerce store.
Learn More About eCommerce Integration.
API stands for application program interface and is used to describe a means for systems to interact with one another. Specific protocols, routines and tools that make up APIs help programmers build software applications and dictate how multiple applications will talk to one another. APIs provide limited information about a system’s internal infrastructure so that outside developers can use the information to build new applications that work with the original system. By limiting outside programmers access to specific information, businesses can integrate with other solutions without providing access to their entire data set/code infrastructure. A great example of an API is use is when it comes to integrating your back-end ERP and your front-end website (such as your Shopify site or even marketplaces like Amazon). The ability to integrate your ERP with your eCommerce is done with the help of an API.