Q+A With Toshi Hatashita, The Profit Line's VP of Client Services
What is an ERP system?
An Enterprise Resource Planning system is a software that has separate modules that integrate the different parts of a business together. This could include accounting records, human resources, inventory management, sales and invoicing, and manufacturing all in one software.
How much does it typically cost?
They can be expensive. Some companies start by paying high consulting fees to research and help select their ERP. Then there is the implementation stage often done by another team that can be costly and usually takes months. Lastly, they is the ongoing monthly/annual fees on top of this, that can be over $50k per year.
What are the upsides?
The software industry-specific
Modules are integrated
All of the company’s information is kept in one place
What are the limitations?
While ERPs may integrate the modules within its own software, they often don’t integrate with other external apps.
Can be expensive to implement and there are further costs to maintain it.
Such a large and complex software means that the latest technological advances are slower to be implemented, if at all
They take time to implement. There are often steep learning curves for employees to learn how to use the software
How does TPL offer an alternative approach?
At TPL, we focus on building our own ERP-style systems for our clients, but we try to keep it simple. This often revolves around QBO as the core accounting system and then we integrate our favourite standard apps that work for most businesses, like Dext and Plooto. Our first choice is to keep core functions within QBO, but sometimes our clients have a more complicated operation that goes beyond QBO’s capability. We identify the issue and then research additional apps to address these concerns. This may include inventory management, extended financial reporting, or a separate commerce platform.
The advantage of this? There are new apps being developed constantly. Alternatively, older ones that were insufficient in the past might improve significantly after a few years of operation. We constantly re-evaluate our current family of apps and determine if they are still the best for the specific client. We can rather easily switch a single app to a better one, without changing the rest of the app network that are working well.
How you measure success?
When we have streamlined and simplified our client’s processes to provide more useful information; this is success for us. When we’ve created the right network of apps, the accounting function runs smoothly and minimizes unnecessary input from our clients.
Some of the new apps provide more useful reporting to our clients. This doesn’t usually mean more detail, rather, it is a more focused analysis. We can assist our clients to determine and then track key performance indicators over time. Budgeting and forecasting are other options. We can also run reports for a consolidated group, rather than the individual entity. There are many more options, which we can curate to meet specific needs that provides useful reporting, rather than an overload of unnecessary information.
This all allows clients to focus on running their business, worry free and on budget.