ERP vs Excel

Why Excel at All?

You might be asking yourself why do I need to Excel at all?  Don’t today’s ERP Systems provide all the information I need?  The ERP systems available today have evolved since their early origins in the 1960’s.  Not yet known as ERP systems, the term was coined by the Gartner Group in the 1990’s. ERP Systems have been used by manufacturers from the beginning, but what do they do? The acronym provides some clues.  

What is ERP?

• Enterprise: These systems are enterprise-wide systems that can handle all your business processes. However, not all ERP systems are equal, and some enterprises are bigger and more complex than others.
• Resource: An enterprise’s business resources can be anything from its people to the equipment, essentially the company’s assets.
• Planning: Increased complexity in managing resources and efforts requires planning to run the enterprise as efficiently as possible. This is where MRP (Material Requirements Planning) from the 1970s comes in, now encompassed in today’s ERP systems.

ERP systems also cover accounting, customer and supplier relations, marketing, engineering management, quality management, service management, and human resources.  ERP systems are now very comprehensive in the processes they support, so why use Excel?

When to Use Excel

There are some areas where Excel beats ERP with the general rule being in ad hoc analysis and reporting. Accountants are Excel power users, and expecting them to relinquish Excel is unrealistic.

Advantages of Excel

• Customization: Spreadsheet reports are easily customizable in layout and formatting.
• Ad Hoc Analysis: Ideal for capturing financial data at points in time for future reporting.
• Flexibility: More judgment-based decisions and calculations are best done in tools that provide flexibility.

When to Use ERP

ERP systems are complex but add rigor to business processes when properly and fully implemented. This does not always occur, and bad implementations can cause lingering problems and undermine trust in the ERP system.

Advantages of ERP

• Comprehensive Data Repository: ERP systems provide a great repository of data.
• Integrated Business Processes: They help in managing integrated processes and improving operational efficiency.
• Scalability: ERP systems can be scaled according to business size and requirements.

ERP vs Excel