Modular Accounting Systems vs ERP Systems?

Growing companies who find they are straight-jacketed by their current accounting systems are typically faced with the difficult decision of upgrading as they grow. They can either choose to implement an all encompassing system or to ‘bolt on’ smaller applications in order to add capabilities to what they already have.

The first approach, typically an ERP (Enterprise Resource Planning) system, deals with every aspect of business: from controlling marketing campaigns and sales reps, order collection, product warehousing and distribution, payroll and HR, workflow, reporting, financials and more. ERP systems are excellent but be prepared for long and costly implementation projects.

The second method: adding functionality to a core accounting system, is usually much less stressful and costly to implement. The pitfalls may include: duplication of data (such as customer records) which may be overcome with newer systems designed with seamless links. This modular approach ends up less painful,as individual modules are purpose built with more capabilities than ERP systems.

Which approach is best for you? In order to assess this, you need to list and prioritise your requirements and note which are not adequately achieved by your current solution. The modular approach is only ever a viable option if you are relatively happy with your core accounting system and there are a range of available bolt on applications (to satisfy the missing needs) that link seamlessly with it.

In evaluating both options, you must include all costs such as additional hardware; system software; costs of data conversion, configuration, testing, training and on-going support; and maintenance costs.

The selection process is complex and often risky especially in recessionary times. You may choose to seek the advice of a Business Consultant with deep knowledge of a number of popular Modular and ERP Business Accounting Systems.

About the Author

Rick is the director of marketing and operations at Axsapt, a consulting organisation specialising in business software across a range of products and offerings. Rick has been involved in software consulting for over 30 years and brings a depth and breadth of expertise in technology.

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