So you want to know more about why an ERP is better than a basic accounting package and some spreadsheets. I have mentioned that spreadsheets have a high error rate and are inherently single user. I’ve discussed reporting from a database as being much easier to do that the same from Excel. What you might be left with is an impression that using a database is the way to go. That would make some sense – and all things being equal I’d agree with you. But I don’t, all things aren’t equal.
The king of do it yourself databases is Microsoft Access. It’s actually a pretty decent product – with a good community of users who are, if not experts, at least familiar. There are a couple of reasons Access is a good choice, if you do decide to pursue this DIY direction.
Access is relatively cheap. It’s part of Microsoft Office – although the version with Access is more money. It’s about $300 more to get the database tools. You get a few more things, but not many more useful tools other than Access.
“Programming” Access using the built-in wizards can let you create a few tables and forms, reports and queries by the end of a solid work day or two. So, call that $500 of programming time and $1500 of software and you can have your item list, order table, purchase order report etc…
Now what starts to happen is pretty serious – and costs you a LOT of money over the next while.
Soon after your database is created and your purchase orders are going out to vendors, you realize you need to receive things. Vendors are annoying, sometimes they ship exactly what you wanted, in exactly the quantity and at the price on the PO – but often they don’t. So as time passes the simple access database begins an insidious march towards something deadly – COMPLEXITY!
As time goes on it gets more and more complicated.
If you were to go back in a time machine, and re-appraise everything you needed to do, you would realize that your original concept was lacking any kind of check and balance. Even if your people don’t make mistakes – your vendors and customers do. Your database (and spreadsheets) needs to CROSS REFERENCE things to try and detect and prevent errors. It turns out this is tricky.
Any decent database configured to do this stuff has to have programming in it. That means it’s got to have some Visual Basic and that is not something just anyone can do. You can hire a cheap college student to do that, but be prepared to have them for a year or two. And they won’t finish the entire programming.
I’ve seen some amazing Access databases in my day. I’ve seen databases that interface with CAD and CAM tools, calculate nesting requirements for their software, generate MRP demand etc. When I talk to those customers, the conservative estimates are that they spent 200 to 300 thousand dollars to write the app. It’s almost always a well-paid engineer or network admin that is on staff full time. The business reaches the point where (whether intentionally or not) they feel trapped. They are fearful of losing this person. Normally when I have arrived, it’s because the Access database technology has reached some limit (Access databases cap at about 500-800 megabytes for their useful size). Or it’s because the designer has quit, is retiring, got hit by a bus or won the lottery.
The checks and balances are required to make this system work, without them you’re a half step better than a spreadsheet but 100 yards back from the finish line. They are incredibly difficult to program and create. Don’t get fooled. You are way better off to spend 10-20k on a simple ERP than to go down this road.