Sometimes a company looks like a living organism, only without a nervous system.
Every department works, the company does not
The sales team may have its own CRM. It shows the status of negotiations and the promises made to customers.
The warehouse has a handy Excel sheet with stock levels. It is updated at the end of the day.
Purchasing has a notebook, or simply “we keep it all in our heads”.
Finance has a report that is compiled once a week. It lags five days behind reality.
Inside each department everything works. The failure happens between departments – at the seams – where the data of one system has to be handed over to another.
Right now there is no automatic hand-over: information is forwarded by e-mail, in messengers, and clarified by phone. A ravine opens up, and the business “falls” into it – deadlines, profit, customers...
From the outside it looks fine – every department works in its own convenient tool. In reality it is a failure that has merely been postponed.
Copies instead of transfer
Information in a company is not transferred exactly, it is copied: from the delivery note into a spreadsheet, from the spreadsheet into an e-mail, from the e-mail into the head of the “indispensable employee”.
Every copy becomes a version of the truth – and over time the versions drift apart. Where is the truth – in the warehouse, in sales, or in finance?
What ERP really is
ERP – enterprise resource planning – was invented to solve exactly this problem.
It is not an accounting program and not a module that the IT people install. It is a management model, shaped as an IT system.
Imagine a single digital loop in which any customer order immediately pulls in:
- stock levels in the warehouse;
- the production plan;
- the purchasing queue;
- the movement of money on the accounts;
- the history of work with this particular customer.
What it changes for the business:
- materials are reserved automatically;
- a manufacturing order is queued;
- a purchase request is generated;
- the cost price is recalculated the moment the price of raw materials changes, not after the goods have already been produced.
Reconciliation by e-mail or a call to another department is no longer needed. Not because the departments stopped caring, but because they share one source of data.
In the literature this is called the “brain of the company” – a single loop along which a signal travels between departments faster than an employee manages to ask.
The decision is made not at a meeting, but at the very moment the data is queried.
The two paths there used to be
Until recently a business had two paths.
The first – a large platform of the 1C:ERP class or comparable international systems. They are customised for years in their own development language. By the time the implementation is “finished”, the company already has different tasks. The price of such an implementation is a separate question.
The second – a boxed 1C:Accounting or 1C:Small Business. It covers the accounting, but not the end-to-end processes. Over time the system grows a crust of customisations, Excel, chats and third-party solutions.
Odoo has taken the best of both – dozens of pluggable business modules – with a single logic and a single database.
And, importantly – Odoo has a built-in layer of artificial intelligence, not one “bolted on the side”. It works with the same data, assisting the employees.
To be continued – unhurried, effective and done properly.