In this article we explain the definition of ERP, its importance in companies and its main advantages and disadvantages.
What is an ERP?
ERP stands for “Enterprise Resource Planning“. That said, an ERP software is a software or set of them that take care of the most important internal operations of a company, such as operations related to expenses, sales, customers or inventories.
ERP softwares usually offer integrated solutions by modules or functionalities that allow centralizing all the company’s information in a single and secure database. For example, these are some modules that an ERP could include:
Initially, adopting ERP software was a large investment in time and money that only large companies could afford, but it improved productivity by up to 50%.
Thanks to new technologies, solutions have been created in the cloud that have allowed lower costs, any company can enjoy an ERP software or management software for SMEs to improve their productivity.
Advantages of an ERP system
An ERP mainly offers the following advantages:
- Centralized and traceable information: It allows the company not to suffer important information losses.
- Integral centralized management: Any member can use the same ERP for their daily management.
- Automation of repetitive tasks and processes.
As a sum of all the above, we will obtain the main advantage which is the saving of time, costs and productivity increase.
In addition, it also allows managers to make better decisions by having all the information centralized with transparent reports on any area of your company.
Disadvantages of ERP software
ERP systems have two main problems and disadvantages. The first one is the price, since if a company needs its software to be adaptable to 100% of its needs, it will have a higher cost.
Fortunately, ERP software is designed so that any company can use it without leaving behind any important function, so the percentage of companies that need a custom-made ERP software is decreasing and almost non-existent.
The second disadvantage of ERP is its implementation, which will take more or less time depending on the adaptation of employees to abandon their previous management system (paper, excel, word…) and take all the information to the ERP in its mobile or computer version.
While it is true that today, the price of ERP software is affordable for most companies because it has been greatly reduced over the last 20 years. The biggest problem is in the implementation, which can lead to loss of information or delays in the operation of the company. To counteract this, ERPs usually offer help to companies to facilitate the use of ERP in the shortest possible time.
Types of companies that need an ERP
A software that optimizes all of a company’s resources is necessary whatever the size and role of the company. As for any freelancer, the ability to adopt the functionality required for your internal operations gives greater flexibility when implementing ERP, so if you’re reading this, an ERP is likely to boost your company’s productivity along with the other advantages we’ve discussed above.
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