There’s a lot to know about enterprise resource planning (ERP) solutions. All the acronyms and jargon can be overwhelming when you’re trying to make a large investment like selecting, implementing, and configuring an ERP system.
That’s why it’s a good idea to acquaint yourself with common ERP terminology before you begin so you can make the most informed decision for your company.
In this article, we’ve divided our ERP glossary into three relevant categories depending on what you need to know at different points in the selection process, starting with the very basics and then moving into more technical terms.
ERP Terminology 101
Before you reach out to an ERP consultant or vendor, get acquainted with these basic ERP terms so you have the language to discuss ERP software.
- Cloud-based software – Software solutions that store data in remote servers as opposed to servers at your manufacturing facility. Cloud-based ERP systems can be accessed from anywhere via the Internet.
- Configure, Price, Quote (CPQ) – Software that streamlines the sales process by automated menial tasks like providing estimates for customized products. CPQ software can come with an ERP system or be integrated separately.
- Customer Relationship Management (CRM) – CRM systems collect and analyze customer data, including demographics and sales cycle timelines. While there is sometimes confusion between CRM vs ERP, CRM systems can be used independently or integrated within a larger ERP solution.
- Enterprise Resource Planning (ERP) – An ERP solution is a holistic and centralized data base capable of storing, managing, organizing, and analyzing vast amounts of data. ERP systems integrate with modules that serve more specific purposes, but maintain the ability to communicate data among them. The ultimate goal of an ERP system is to streamline and optimize all parts of a business.
- Implementation – ERP implementation refers to the process of rolling out the software solution within a company. This includes everything from the technical application of the software and migration of data from one database to another, to ensuring successful employee adoption and correct use of the software.
- Migration – ERP migration refers to the process of moving data from an old database to a new database during the upgrade of an ERP system. You want to ensure your potential ERP partner has experience successfully and accurately migrating vast amounts of data.
- Module – An ERP module is software that serves a more specific purpose than the broader ERP system. For example, you might want to include a financial module in your ERP solution.
- On-premise software – Some manufacturers opt for ERP software that is hosted on local servers, often at the manufacturing facility itself. On-premise ERP systems cannot be accessed remotely over the internet like cloud-based systems, but rather via an internal intranet network.
- Partner – Your ERP partner is the consulting service that helps you select, implement, optimize, and maintain your ERP system.
- Selection criteria – Selection criteria refers to the set of requirements that your business needs from your ERP solution. You will need to discuss the needs and goals of your business with your partner in order to make the best selection for your unique situation.
- Software license – When you select an ERP system, you are essentially renting the software solution from the ERP vendor. Your software license is proof that the ERP vendor is allowing you to use their product.
- Vendor – An ERP vendor is the creator and distributor of an ERP software system, like Oracle or Infor. You typically do not purchase an ERP system directly from the vendor. Instead, an ERP partner acts as a mediary between you and the vendor.
ERP Terminology for Choosing a Partner
Now that you’re familiar with the basics, use these ERP acronyms and terms to talk with an ERP consultant or firm. Using these terms, you will be able to gauge the expertise of your potential ERP partner.
- 3rd Party Application – A third party application is software that was not created by the vendor. You’ll want to ask if your current third party software can be integrated with your potential ERP system. CAD integration is an example of a 3rd party application integrating with an ERP system.
- Advanced forecasting – Advanced forecasting software uses features like artificial intelligence and data collected by smart devices to make predictions. It can be used by many departments, from sales forecasting to procurement forecasting. Ask your potential ERP partner if their systems offer advanced forecasting.
- Demo – Refers to either a video or live demonstration of the product or service. View Godlan’s video demos for an example.
- Drill down – Drilling down is to example a specific and detailed section of a larger data set. Ask your potential partner if advanced drill down capabilities are a feature of their ERP vendor’s software.
- Hybrid solution – A hybrid solution is when a manufacturer uses cloud-based ERP software for some tasks and on-premises ERP software for other tasks. Ask your partner if your situation requires a hybrid solution.
- Integration – Integration refers to the connection and communication between two sets of software. Many ERP systems allow for integration among other third party applications, like IIoT solutions or CAD software.
- Mobile data collection – The remote collection of data that can be access from anywhere in the world that has internet. Mobile data collection allows for real-time analysis.
- Module – An ERP module is a software solution than serves a specific purpose or department. Modules can be easily integrated with the broader ERP software. You’ll want to discuss with your ERP consultant the types of modules that you need and learn what modules will have the greatest return on investment for your situation.
- User Interface (UI) – The user interface is the browser for your ERP system. It’s what you see on screen. Ask your ERP consultant how intuitive the user interface is. You want a system that is easy for all departments to use correctly.
ERP Terminology for Selecting Your Product and Service
Once you’ve decided which ERP consultant to go with, you will need to be able to talk to them about the product you want to implement and any ERP modules you might need. The ERP terms below will help you make the best product selections. Bear in mind that these are manufacturer-specific.
- Advanced Planning and Scheduling (APS) – APS is a method manufacturers use to optimize their production process. APS software is often a module within a larger ERP system.
- Business Intelligence (BI) – BI is the collection and analysis of data that can help a business run smoothly. BI software can come with or be integrated with an ERP system, like Birst Business Analytics from Infor.
- Infor SyteLine ERP – Infor SyteLine is an ERP system designed for manufacturers. It offers inventory management, production planning, scheduling, procurement, and financials, and can be integrated with other software solutions. It is Godlan’s preferred ERP system for manufacturers.
- Materials and Inventory Management – A set of inventory reduction strategies and methods to aid in the minimization of wasted materials. This is an optional ERP module.
- Product Lifecycle Management (PLM) – PLM refers to a set of strategies that aim to minimize waste and cost throughout the life of a product, from conception to termination. PLM is an optional ERP module.
- Sales and Operations Planning (S&OP) – S&OP is the process of aligning sales, marketing, operations, and financial departments. S&OP software can be used within a broader ERP solution.
- User Adoption Platform (UAP) and Training – Always ensure your ERP partner offers user training so your employees are well prepared to use your new ERP system intelligently.
Practice Your ERP Terminology with Godlan
We love to talk ERP. Tell our ERP experts about your manufacturing business so we can learn your pain points and needs. Then, let us help you find the optimal solution. Reach out to us today.
