What distinguishes a management software from an integrated software for the automation of business processes?
Many people call the first “accounting programs” or “business management programs” and the second “Software Erp” or “integrated business systems”.
We go beyond simple definitions and try to understand the main differences.
Accounting and management software
Accounting software is mainly used to comply with regulatory requirements established by applicable laws (calculate VAT to be paid, withholding tax, newspaper, balance sheet, etc.). Almost always these software are used by administrative employees who work mainly for the above purpose. Other business users do not use these procedures and are therefore excluded from the system.
In many cases, especially in the smallest businesses, the choice is made on the basis of suggestions from the accountant, who obviously recommends using a software compatible with the one he used in the studio, without considering that the accounting of a company may require criteria of organization and evaluation very different from those set for the sole purpose of fulfilments …
With the management software for companies, in addition to the functions of accounting, we find other functions such as sales management, purchases, warehouse, production etc. In this case, therefore, many business users use management software to enter data and to consult updated information.
Not just functionality
However, the fact that a software has multiple features is not sufficient to create efficiency and automation of operations.
Many management software, for example, have been written over many years of activity, adding new modules and functionalities over time. This approach is often not efficient because the system does not have an overview of business flows and above all there are no functions to create automation rules that connect all the user’s operational steps.
If we take, for example, the accounting functions of a management software, we will see that administrative users manually perform a series of operations that are completely free fromactive and passive cycle documents (sales and purchase invoices, receipts, payments, etc).
What can this do?
First of all, the accounting facts could represent a different reality from the management one. This is not a secondary aspect, especially for the ownership of the company, which in this way does not have adequate tools for control. Let’s assume that the new administration employee is wrong to associate some accounts of the chart of accounts with accounting records and a revenue item that was associated with a certain category of products is associated with another category, how will we realize this error?
Another important factor are the times of the activities, which in this case are certainly longer, and the impossibility of creating automation rules that modern systems provide. To learn more about this topic, read the experience of Matteo Pillon , an expert in management control, on how to manage accounting with an ERP software.
Beyond accounting. Marketing and sales management.
Let’s move for a moment from accounting and think about sales. Very often the company sellers do not use management systems as they do not have applications that support their needs. A seller must be able to track the activities he / she does with a potential client or with the client acquired, must have simple and immediate information to decide the actions to be taken. We talk about users who are often off-site and therefore have to work with mobile devices and in completely different contexts from the user who works comfortably seated in front of the computer in the office.
What we usually see is the “do it yourself” solution, that is: the commercials manage their activities with individual tools (file word, pdf, excel, so many mails etc ..) then they pass the orders to the commercial back office via e-mail. provides to enter the data in the management program. Once again we lose the benefits of automation, manual management processes with a high risk of errors and obviously higher costs for operations .
You do not have an overview of what the company is doing towards a specific customer. Once again we have the different departments that access information that is isolated on different systems.
Marketing does not have complete information to plan targeted campaigns and automatic actions when precise sales-related events occur.
Integrate the management with other vertical software
Many companies try to integrate management software with customer relationship management systems (CRMs). Integrating completely heterogeneous systems involves considerable costs and concrete management difficulties. These strategies pose again the problem of automation .
How can I program automatic checks throughout the supply chain if a data is processed by different programs at different times? What happens when the software manufacturer performs updates? Will the synchronization system continue to work or do I have to take action? If the seller opens the card of the customer in his CRM will be able to see in real time the administrative data, ie the payments situation, the purchase history, open orders etc.? And if the commercial inserts a note on the CRM related to the agreements made for payment, can the administration view this information?
What kind of company?