What does ERP stand for? ERP means Enterprise Resource Planning and refers to a type of software that integrates across multiple departments in a company to improve interoperability between these business groups or business units.

Do you handle agribusiness payroll? Yes. Our platform includes the ability to pay agribusiness workers in a myriad of ways across many different companies with different ownership structures. This can be very complex from a reporting and compliance standpoint. US Agribusiness manages this complexity with you to ensure you meet strict local, state, and federal requirements.

Does it matter whether an agribusiness company adopts a general ERP versus an agribusiness ERP? Absolutely. The war stories companies can share when implementing SAP, Oracle, Dynamix, or NetSuite are immense. The challenges faced early on cannot be ignored. Don’t be someone else’s guinea pig. Adopt a solution built for the agribusiness industry. These non-industry built solutions lack the architecture to handle the uniqueness of the agribusiness industry. From having to teach the integration team about growing and packing to trying to reverse engineer systems built for manufacturing widgets or for oil & gas, you don’t have the time to teach a software company the basics. You need experienced professionals on your side helping you get insights from their IT experience in your industry. Something else to consider is that perishability of product has an enormous impact to inventory, finances, and even ordering. There is not a single place in the supply chain where perishability is not a factor. Your solution needs to have that as the foundation of its architecture. Besides, things change quickly in agribusiness. One change in the weather and a whole crop can be wiped out or the value of inventory can change quickly. With fast running crops like cherries or berries or leafy greens, shelf life is short. Operations have to move fast to get the product to market. Your system needs to be structured to move your product quickly.

When does ERP makes sense for companies to purchase & implement? In the agribusiness industry, things can vary company by company. Two companies may sell apples, but one may have operations all over the country and one may be centralized to one region. All of this may impact the urgency and need for a platform solution. In general, companies above $50M in revenues should seriously consider the adoption of an ERP. Out of the box software, such as Quickbooks or Famous Software, can work to a point. But once you exceed 50-100 users these solutions can reduce their effectiveness in your company. According to their websites, the average installation size for these companies is 10 users. The average starting size for an ERP is 50 or more users.

How much should a company spend on IT each year? This is a tricky question. A capital expense is very different than ongoing maintenance. This must be factored into budgetary discussions. Industries that are leading edge in technology typically spend 2-3% of annual revenues on Information Technology per year. Companies that are staying on top of technology but perhaps 2-5 years behind technology leaders spend 1% of revenues per year on Information Technology. Companies operating on a minimal or shoe string budget usually spend 0.5% of annual revenues on technology.

How much should a company budget for an ERP purchase? Enterprise Resource Planning solutions can be purchased on a license basis or on a service basis. When purchased on a license basis, these purchases are valued over a 3 or 5-year life-cycle. For service based purchases, these are usually contracts made for 3 or 5 years. Costs can vary but the initial purchase of the license and services can be estimated at 1-2% of annual revenues and is typically amortized over a 3 or 5 year life cycle. Ongoing maintenance and support should be estimated at 0.25% – 0.5% of annual sales. Compared to service based agreements, license purchase break-even is typically 3 years since this is usually the maximum duration between upgrade periods.