Accounting System or ERP? Vendor or Partner? SAP Business One Answers.

As an SAP Business One Gold Partner, we talk to numerous businesses that are feeling stuck. They know they’ve outgrown their current accounting system, and they need to expand their capabilities.

What they don’t know is how to go about it.

Often, the answer isn’t finding a better accounting system or adding on yet another module. The true need is to expand system capabilities beyond finance and accounting, pulling numerous functions into a single suite.

Enterprise resource planning (ERP) software is that unified solution. But ERP systems can sound (and be) a bit scary and wide-ranging, leading many to wonder, is an ERP really the right move for right now?

We believe the answer is “yes!” for most, and we want to show you why in today’s post.

We’ll start by helping you understand the key differences between a basic accounting package and a fully functional ERP solution. We’ll then dive deeper into key functional areas where your business may be facing specific challenges. And then we’ll help you understand the pros and cons of working directly with a software vendor versus an experienced independent partner.

At the end, you’ll be armed with plenty of knowledge and be much more comfortable as you explore the best next steps for your business.

Accounting System vs. ERP: Key Differences

The difference between accounting software and an ERP is one of scope. Accounting software handles the financial aspects of a business: accounts payable and receivable, general ledger, billing, payroll, and the like. Some solutions offer extremely deep or complex financial capabilities, but just about all functions fall neatly into the finance category.

ERP solutions handle finances, too, but finance is just one of many categories under the ERP umbrella. Beyond financial elements, an ERP typically handles supply chain management, inventory management, procurement, production control, and sometimes even ops management or customer relationship management.

There is certainly some overlap between the categories, and the different solutions available have differing levels of depth. Some accounting systems offer basic project management or inventory management functions, but they’re quite weak compared to the average ERP. Conversely, some firms may rely on an ERP for everything else but find its financial module weaker than their current accounting solution.

The larger or more complex your business grows, the higher the likelihood an ERP will better solve your needs. For example, we talk to many companies that have badly outgrown QuickBooks or something similar and are looking for a more robust solution. While other accounting systems exist that might solve some of these growing pains, many businesses in this position are facing acute business process challenges that are holding them back. They would be better served moving to an ERP solution and gaining all sorts of additional functionality.

Functional Problems an ERP Solves

The right ERP solution addresses a wide range of functional matters that accounting systems can’t touch.

We’ll focus on three of these areas below: supply chain management, inventory management, and eCommerce.

Supply Chain Management

Businesses that deal in physical goods and components must navigate a supply chain that can be maddeningly complex. More than ever before, you need to know not just that you’re out of something but when you’ll be out of something— so you can restock proactively and overcome supply chain delays.

With better, more automated warehouse management, your business will rein in supply chain issues and solve the process problems currently holding you back.

Inventory Management

As your organization scales (especially when you move beyond a single-warehouse operation), inventory management becomes a greater challenge. The processes that worked before are failing you, and something needs to change.

SAP Business One helps growing businesses address the three Vs: validation, visibility, and velocity. It functions as a warehouse management system, updating data in real time and automating inventory tracking. It gives you forecasting power and ultimately enables you to speed up operations and processes, helping you compete better on speed.

For more on inventory management, read Leveraging SAP Business One for Inventory Management.

eCommerce

Businesses involved in eCommerce add a host of new complications to their inventory, supply chain, and operations—not to mention the digital tools they use to track everything. SAP Business One is a robust ERP solution that supports the eCommerce channel especially well (with a little help from us).

Third Wave’s exclusive software, Bizweaver, effortlessly syncs SAP Business One with any eCommerce platform. Seamless data syncing means no dual entry: the Business One database provides a single consolidated source for all commerce channels and transactions, eliminating redundant data entry and keeping your database accurate and up to date.

Learn more about how Third Wave integrates SAP Business One with leading eCommerce solutions.

Understanding the Difference Between an ERP Vendor and an ERP Partner

Next, let’s talk for a minute about what it means to work with an ERP vendor, and how that’s different (and much less desirable) than working with a true ERP partner.

So, what is an ERP vendor? It’s a software provider, a company that makes an ERP solution and will gladly sell it to you themselves. NetSuite is one example: NetSuite (the company) will sell you NetSuite (the SaaS platform) any day of the week—even if it’s obvious another product would serve you better.

Often an ERP vendor is perceived to have the most knowledge on their solution—they made it, after all. But the quality of support post-implementation can vary widely, as does support for (and knowledge of) third-party integrations.

An ERP partner, on the other hand, is a truly independent voice, one that isn’t bound exclusively to a specific vendor. An ERP partner has the freedom to put its customers’ needs first, truly understanding the problems each customer seeks to solve. With a clear and comprehensive understanding of the customer’s needs, an ERP partner like Third Wave Business Systems can then select and customize the best software solution to meet those needs.

To sum up, the distinction here is that an ERP vendor is the software provider itself and will always recommend its own solutions. An ERP partner is an independent third party that can guide your business to the optimal solutions, selecting from multiple vendors when needed.

Selecting the Best ERP Partner

Unless you’re comfortable being squeezed into a specific vendor’s mold (regardless of whether it’s optimal for your business), an ERP partner is the wiser choice. In any given ERP community, you’ll likely find a wide range of experience and service levels too.

To help you select the best ERP partner, we’ve gathered several evaluation questions. Use these with any prospective ERP partner (including us). Chances are, if you’re less than satisfied with a partner’s answers, you’ll feel the same way about their service.

Ask your potential ERP partner:

In addition, ask yourself this key question: what are the chances you’ll outgrow a given partner’s knowledge and capabilities? Perhaps they’re perfectly suited for your company as it is today, but can they keep up with your own growth?

Prioritize the Right Decision Criteria

As we conclude, take a moment to examine your decision-making criteria for selecting software (and the vendors or partners that support that software).

We’ve analyzed data from hundreds of prospects and clients over our long history as an ERP partner. Here’s what we’ve found.

The first time an organization implements an ERP, price, ease of use and a streamlined implementation are the three most important criteria. That’s not particularly surprising.

But what about the second time around?

With the full benefit of a complete ERP evaluation, selection and implementation, companies choosing their second ERP solution have wildly different priorities. Highest is the level of support the partner provides, followed by the vendor’s performance track record.

The software’s ability to fit the business (rather than the other way around) is third, followed by growth potential of the software. Price drops to fifth, and ease of use/implementation drop to last!

We believe this is because when an independent ERP partner gets the other elements right, ease of use is a given.

Third Wave Is Your Experienced ERP Partner

For more than 20 years, Third Wave has been serving clients as a true ERP partner, much more than an ERP vendor. We understand the importance of top-tier support and of a truly independent voice that guides you to optimal solutions.

Our decades of success show that clients value these same priorities, too.

If your business is on the fence about implementing a new accounting system or stepping up to an ERP system, we’re here to help you determine what’s right for you. And if you’re already convinced that an ERP suite is the right move, we’re ready to partner with you.

Reach out to our team through the form below!

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