What is ERP and what are the advantages to the companies that implemented?

advantage erp

Most of the companies have an ERP, according to the study 2013, a figure that rises to 62.8% for large companies. But what exactly is ERP? And what are the benefits that justify its implementation, not always easy? We will learn more about these programs.

What is ERP? This “famous” acronym we hear so often are in Enterprise Resource Planning and usually translated into Castilian as System Enterprise Resource Planning or Enterprise Resource Planning. As its name suggests, it is software packages that allow business management plan and control resources and business processes of a company.

The ERP emerged in the United States during World War II. Taking advantage of the first computers, the American authorities created rudimentary management programs to plan and control the production war effort. After this kind of software passed the business sector and was developed into what we now know as an ERP.

 

The keys of an ERP

Unlike planning programs primarily focused on production, ERP solutions that are modern cover all areas of a business organization: finance, accounting, billing, sales, marketing, logistics, production, inventory, payroll, etc. To that end, the programs ERP are formed by different modules or tools corresponding to each of these areas. Thus, the company can decide which modules will be implemented at all times depending on the activities you need to manage your business. Therefore, the implementation of an ERP is always in some part a measure as well as chooses which modules are implemented; a process is required to fit the specific operation and the idiosyncrasies of individual companies.

In addition, unlike a pack of applications that operate separately (as might be the popular office suite MicrosoftOffice) in an ERP  all data is  integrated and connected . Thus, the company ensures that information flows seamlessly from one module to another and can gain valuable centralized overview of the status of your business, which can not be achieved with any other business program.

It is also necessary that the ERP is upgradeable as time can vary both the needs of the company (eg launch of new products and services, opening offices, creation of departments, etc.) and the environment in which it operates (eg changes in procedures to overcome an audit and be certified ISO , or changes in the legal framework and regulations SEPA ). In this sense, there are providers that offer upgrade plans to update the ERP without discarding all the investment made so far.

The advantages of an ERP

In a summary, the advantages of implementing enterprise software ERP are:

  • Increase productivity
    The ERP allows the entire company to work with the same applications and automate many business processes, which helps employees to work harder and better.
  • Increases control
    With ERP, you can know when everything is happening in the company. For example: Who has made ​​a sale? How much inventory is left? Are unpaid bills?
  • Improves safety
    T
    he information ERP is standardized and is traceable. So the risks are avoided dispersed information, loss of data, unauthorized access, etc.
  • Optimizes Service
    Just access the ERP , it is possible to know the exact status of a client, when your order will be served, if you have unpaid bills, claims or complaints, etc.
  • Generates savings
    The ERP reduces operating costs by automating business processes, increasing employee productivity and reducing the risk of error.
  • Supports decisions
    Many entrepreneurs say they have all your business in the head. But when the company grows, it is no longer possible: the support of a required ERP to make informed decisions.
  • Create corporate culture
    Implement an ERP requires all departments to document, systematize and coordinate their work processes. This is a professionalization of the activity.
  • Drives growth
    When a company acquires a certain size or complexity, ERP is the tool to manage the business professionally, instead of going putting out fires.

All these advantages translate into tangible and measurable results for the company. According to a study by consultancyPriceWaterhouseCoopers , implementing an ERP improves the quality of information by 65% of enterprises; reduces the need for staff in 35% of cases; and lowers costs Information Technology in approximately 20% of the implementations. However, these benefits are not immediate, because implementing an ERP is a process that requires time, effort and investment but then just worthwhile!

Does your company have an ERP? Do you think you need it?