Software experts continually ask, “Is ERP dead?” But frankly, this question isn’t beneficial. As the disruption cycle shortens, ERP software vendors frequently add features and functionality tailored to their customers. For example, a traditional ERP may not suit project and resource managers. Instead, they could look toward project-based ERP, aka ERP project software.

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This article will define project-based ERP and examine its top benefits and features.

Table of Contents

• Overview
• Project-Based vs. Traditional
• Benefits
• Features
  • Project-Based Accounting
  • Human Resource Management(HRM)
  • Supply Chain Management (SCM)
  • Customer Relationship Management (CRM)
  • Project Management
• Last Words

Overview

Project-based ERP is an enterprise software type that utilizes project management features. It supplies a holistic view of company processes, unlike a traditional ERP. This solution suits construction companies, project-based manufacturers, service-based organizations and more.

Project-Based vs. Traditional

Traditional ERP systems have a taste-of-everything appeal with functionalities for manufacturing, accounting, customer relationship management (CRM), inventory management, etc. Project-based ERP software focuses on project and resource management workflows.

Traditional systems are great options for manufacturing businesses with simple practices. They offer the tools necessary to manage straightforward production and overall finances.

However, organizations with many departments and other moving parts need comprehensive analysis to remain highly competitive, which a traditional ERP can’t provide.

In fact, before the rise of ERP-based projects, many businesses compiled reports without ERPs. They leveraged spreadsheets or other disparate systems to keep records of past milestones and timelines, order fulfillment strategies and other complex planning tasks.

Project-based ERP centralizes these tasks for increased productivity and less stress.

Additionally, project based ERP can collect and analyze data on all project-based processes. This analysis enables users to track metrics surrounding labor costs, customer retention and inventory turnover. Greater KPI visibility improves a project-based firm’s ability to plan projects, assess progress and collaborate.

Current ERP vendors offer individual modules dedicated to specific operation aspects. This method allows buyers to configure their ERP software to their needs instead of buying an inflexible, centralized system.

Modular ERP systems enable companies to get as much insight into their operations as possible. In other words, companies can configure a system to focus solely on manufacturing, or they could adopt several unique applications for an inclusive system. ERP modules make the distinction between project-based and traditional ERP systems slightly less significant.

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Primary Benefits

This platform comes with several benefits to streamline workflows and ensure you’re meeting your project expectations.

Thorough Project Accounting

Instead of looking at a company’s overall financial standing, you can leverage project accounting tools to ensure your projects are on budget with thorough reporting and forecasting. You can also check your numbers and determine if the project is worth your time and money or if you need to cut your losses and find a new venture.

Flexible Inventory Management

Whether you’re looking for specific raw materials or need to replenish items, the ideal inventory management tools can help. Some handy functional requirements include:

• Shipping
• Purchasing
• Demand Forecasting
• Inventory Tracking
• And more!

Improves Resource Management

Knowing which resources to use for specific projects is paramount in ERP projects and the entire project management industry. Ideal resource management tools help resource managers determine which employees, machinery, tools, materials and other assets are vital to best complete specific projects and garner the best results.

Think of resource management as sports coaches knowing each player’s strengths and when to put them in the game to increase their chances of winning.

Sells to Target Customers

Thanks to the ideal CRM tools, you can ensure specific projects and services appeal to the perfect clients. You can review client feedback and collaborate with customers to ensure their products and services are up to par.

Some necessary CRM features include:

• Database Management
• Client Interaction Tracking
• Mobile Support
• Knowledge Management
• Sales Automation

Offers Project-Based KPIs

Measuring KPIs, especially those regarding business and project health, are essential. You could invest in good business intelligence (BI) software or reliable analytical modules to ensure you’re meeting your target values regularly. You can also catch downtime and fix any visible obstacles to reach your quotas.

A few project management KPIs to consider tracking include:

• Number of Schedule Adjustments
• Resource Conflict Year Over Year (YOY)
• Budget Line Items
• Cost Performance Index
• Customer Complaints
• Employee Churn Rates

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Key Features

One of the most extensive additions a project based ERP brings is an emphasis on people. This purpose moves ERP away from a system that only focuses on manufacturing tangible goods to one that also includes services (and the people who provide them).

Especially in the US, the manufacturing age has given way to an age where people — the sales and transaction agents — are critically important to every business. To better accommodate this shift, project-based ERPs contain several critical features.

Project-Based Accounting

Project-based accounting allows users to see projects’ financial state. These tools enable your accounting staff to record project-related costs and revenues regularly. This recording process makes your financial reporting far more helpful, providing in-depth insight into your operations.

An example of a project accounting module.

If a project isn’t hitting its milestones on time, you can quickly look into your project-based accounting records and see if this project has been under-resourced. Or maybe you see it costs your company more money than the average project, leading you to reassess this task. This tool helps you understand the financial health of your business on a more granular level, allowing you to hone in on your most problematic areas.

Human Resource Management (HRM)

This component typically has recruiting, training, payroll, time tracking and attendance tools. You can employ HRM to understand specific employee history, and when incorporated with an ERP, it also shows more significant HR trends.

A preview of a HRM module.

These trends can aid project leaders as they designate workloads for specific projects. This tool can help users see team productivity during particular timeframes, when employees take time off and labor forecasts.

This visibility is advantageous during project planning and resource management. It can prevent your business from taking on too many new projects when your resources are tied up while reducing low productivity cycles.

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Supply Chain Management (SCM)

SCM tools provide project-based manufacturing software with a better way to manage an iterative supply chain. Newer platforms offer end-to-end supply chain management to gain a deeper understanding of your products’ lifecycles.

An example of a supply chain module.

First, modern ERP systems have advanced supply chain collaboration (SCC) software to simplify business partner collaborations. SCC provides all parties with ERP space to pool resources and communicate. Transmitting all essential information through a single channel helps prevent miscommunication and lost data.

Additionally, SCM capabilities can help users gain complete supply chain visibility via tracking tools, such as barcodes, RFID tags and serial numbers. These tools give real-time insight into where inventory and equipment are at all supply chain stages. This transparency can further assist with resource management, as you now have a precise understanding of how you utilize tangible components.

Lastly, project ERP software can provide analysis and forecasts. Demand forecasts are beneficial for project-based organizations because they support production planning and resource management.

Customer Relationship Management (CRM)

Managing customer relationships is essential for project-based businesses. Customer relationship management (CRM) tools supply users with complete customer data and history, such as previous conversations, pitches and purchase history. Many CRM tools give customers a designated portal, enabling them to communicate with your team directly

A preview of a CRM interface.

Instead of tracking dozens of email threads, CRM customer portals allow your team to manage all customer-related issues and inquiries in one system.

Moreover, CRM software is especially adept at managing marketing campaigns if you choose the correct solution. The tools involved in marketing management allow users to create campaigns while tracking potential and current clients’ progress through the sales cycle. Understanding where your leads drop off and what kinds of clients return is invaluable when planning your next project.

Project Management

The bulk of project based ERP systems’ benefits should come from the system’s ability to centralize and integrate different processes. However, some systems also provide standard project management tools to further aid project-based organizations. One of the most popular are Gantt charts.

An example of a project management interface.

These visual reports communicate project timelines concerning available resources, overlapping projects and milestones. They give users an idea of which activities to complete in a specific sequence, who’s involved and what other concurrent tasks they’ll finish.

Project management tools also enable users to manage invoicing, billing, proposals and contracts to optimize payment collection protocols. The best project-based
ERP software systems should provide a great deal of flexibility regarding these tools to accommodate different payment methods and schedules.

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Last Words

To review this and other solution types for your business, we suggest looking at our ERP comparison guide.

ERP project software takes information out of silos and puts it into centralized systems to analyze wholly. Integration is vital with project ERP, which may take stand-alone programs like CRM and manufacturing floor analysis modules and put them together for cross-departmental evaluation. The bottom line is that ERP based projects provide a package of tools to help project managers complete tasks from start to finish.

Do you think your business would ever implement a project-based ERP system? Or do you prefer a more straightforward solution that focuses on manufacturing? Let us know your thoughts by leaving a comment below!