Microsoft Dynamics 365 Business Central voted the Best ERP system in 2023
According to Forbes
Microsoft Dynamics 365 Business Central
What Is an ERP System?
ERP stands for “enterprise resource planning” and describes the process of analyzing business functions for increased efficiency and productivity. Companies have long sought to streamline business processes through the consolidation of internal data. The use of centralized ERP software has revolutionized the way these goals are carried out by integrating once-separate systems. As much as ever, ERP remains a data-driven approach to consolidating and improving business functions. Modern systems, however, afford a greater degree of simplicity, organization and automation to the employees and business leaders responsible for day-to-day operations.
At the core of any ERP system is a central database that’s shared by the many disparate elements of a company. Rather than having separate data collection and management programs for each department—one for sales, one for inventory management, another for production, and so on—an ERP system provides a single hub for it all.
Who Uses ERP Systems?
ERP systems are not just for massive companies—though they have become particularly essential to large, sprawling organizations. Small businesses, including independent retailers and services, may also find ERP software to provide valuable support.
Any business that strives for accurate data collection can benefit from EPR systems, including all businesses that wish to track sales, inventory and finances. ERP is especially popular in manufacturing and production-based fields, but it is now used in areas as wide-ranging as healthcare, e-commerce and nonprofit work.
How Do ERP Systems Work?
With a consolidated database as its foundation, ERP systems can be built out to accomplish a seemingly limitless variety of management and tracking functions. Doing so still requires technical know-how from a third-party ERP system provider or experienced internal staff, but it’s much, much easier for the company at large than the siloed management software systems of the past.
Employees usually interact with an ERP system through a centralized dashboard connected to the core database. This puts access to real-time information from various parts of the company at employee fingertips any time it’s needed. ERP systems may operate and store information on-site or, increasingly, in the cloud.
Benefits of ERP Systems
The most noteworthy advantages of ERP systems include:
- Greater productivity: Since an ERP system can enable you to streamline and automate your core business functions and processes, employees will be able to accomplish more with fewer resources.
- Easy reporting: ERP platforms simplify reporting so you can act on insights and improve performance in real time. Reporting is key if you’d like to make smart, data-driven decisions.
- Increased accuracy: Consolidating all data management under the purview of a single system reduces the risk of human and technological errors, minimizing discrepancies in cross-departmental reporting.
- Easier compliance: ERP systems can automate internal compliance-monitoring tasks and reporting compliance status in real time with a high degree of accuracy. ERP systems also make it easier to implement changes when new regulations or reporting burdens arise.
- Improved agility: To truly stand out among the competition, you must identify and act on opportunities quickly. ERP systems can help you do so through improved operations and access to real-time data.
- Better interdepartmental collaboration: Because departments share similar interfaces when interacting with an ERP system and can see each other’s data, one group never has to be totally in the dark about what’s going on with another side of the company.
- Scalability and integrations: One of the best qualities of an ERP system is that it’s designed to be built upon. An ERP system doesn’t only solve the compatibility issue—it also supports and enhances new systems with its core database. What’s more, it can provide a framework for expanding access to the new software across a company. ERP systems are commonly integrated with material resource planning (MRP) systems, point-of-sale (POS) systems, supply chain management (SCM) systems and customer relationship management (CRM) systems, to name just a few examples.
How To Choose the Best ERP System
When evaluating an ERP system that’s best for your organization, consider core features, cost, the demo and implementation:
- Integrations. As a unifying interface, the best ERP system for your company should integrate data from HR, IT, accounting/finance, CRM and whatever other suites your company uses in order to coordinate workflows across these areas of your business.
- Shared database. By drawing from one shared database, all connected software systems in the ERP surface real-time data for every user, no matter which module they’re accessing that data from.
- Automation. For cross-functional workflows that involve, for example, both HR and accounting, automations help staff in these departments complete repetitive tasks more quickly.
- Analytics and reporting. An ERP should deliver actionable business intelligence on internal and external factors that impact the entire business.
- Security. Given the sprawl of information circulating in your ERP system, it should keep your data secure. Data encryption, automatic backups, multifactor authentication and system monitoring are just a few examples of security features and measures.
ERP System Cost
Expect to spend upwards of $9,000 per user per month for your ERP system. The total cost of the ERP system itself ranges from $1,740 per month on average for small businesses to $9,330 per month for enterprises. These figures don’t include per-user fees or the cost of implementation, training and maintenance.
Factors that impact cost include customization, number of users and the number of modules you want to incorporate into the ERP.
Pricing models vary, depending on the type of ERP system you’re exploring, whether on-premise, cloud or hybrid. Pricing models may be license-based (typical for on-premise solutions), flat monthly or annual fees, or monthly or annual per-user fees. Some vendors stack these fees, combining a flat monthly or annual fee with a per-user cost.
Make the Most of a Demo
Prior to a demo, give the vendor representative a chance to thoroughly prepare by providing sample data along with all business requirements. The demo should be personalized to your unique business needs and goals, not a canned demo presentation. Prepare an ERP scorecard beforehand that you’ll use to evaluate each of the top picks according to the same key criteria. Also, ask to see desired functions and capabilities in action during the demo. Don’t simply take the representative’s word for it.
Consider the time, cost and scope of resources necessary for ERP implementation before making your final choice. Implementing a new ERP can take six months to over two years. Moreover, will you need to hire an implementation consultant, or does the vendor provide implementation support? If so, at what stages of implementation, and what is the cost? Implementing ERP software typically costs twice as much as the software alone.
In order to determine the best ERP systems in the market, Forbes Advisor considered over 20 of the leading providers in the space and narrowed it down to the top 16 providers. These were then analyzed across five primary categories for a total of 25 different metrics. We then weighted each of the overarching categories based on what matters most to businesses.
Here are the metrics we used to evaluate the top ERP systems:
Pricing – 10%
The best ERP systems are affordable and offer a high value for the price. So we considered pricing, as well as contract lengths, scalability, and the availability of free trials and money back guarantees.
Key Features – 30%
We placed an emphasis on the key features that matter most to businesses seeking an ERP system. For example, we considered whether the systems are cloud-based for accessibility, on-premises ERP, warehouse management, accounting, real-time updates, reporting and analytics and software integrations for maximum flexibility.
Unique Features – 20%
In addition to the key, must-have features, we also considered the unique offerings of each of the best ERP systems. This includes factors such as automation, budgeting and financial management, customer relationship management (CRM) features, forecasting, human resources functionalities, supply chain management and features designed to meet the needs of manufacturers.
Third-Party Ratings and Reviews – 10%
To get a deeper understanding of what real users think of the systems, we looked at third-party user reviews and ratings. This metric considers not only the average ratings across numerous rating sites, but also the number of reviews each provider has to ensure the rating is reflective of a broad user base.
Expert Score – 30%
Our final metric considers our own first-hand experience and expertise. This factors in qualitative metrics such as value for price, ease of use, support quality and popularity.