What is the function of an ERP?
We are immersed in a global era in which technologies are part of our daily lives and within the business sector, they are considered a fundamental resource for the development of productive and economic processes that lead companies to renew their action model towards one more automated and improved.
However, by technological resources it is usually thought that we are referring to state-of-the-art machinery and devices, but in reality it is even more than that because what companies today are requiring are specialized systems that adapt to their particular needs.
We talk about ERP’s, Enterprise Resource Planning by its acronym in English which means Enterprise Resource Planning System. They are advanced technological solutions that help manage the daily activities of a company, covering each of the areas (accounting, supply chain, production, etc.).
An ERP system fulfills various functions: planning, predicting, controlling, budgeting, projecting business processes, which it manages to integrate from a single digital platform that provides a broad visualization of each action that is carried out and promotes an optimal flow between them.
Its capacity for analysis and data collection marks the before and after of its implementation because, based on all the information, it manages to improve decision making that positively impacts the performance of companies and to delve deeper into the subject. Below we present the advantages and disadvantages of an ERP
Advantages of an ERP
Improves decision making
Decision making is an essential activity in any company and it is best to base it on a ERP systemBecause it applies an analytical orientation taking real data and indicators as a reference, which allows each area to act safely and implement its processes efficiently.
On the other hand, it has the ability to integrate all the information into centralized databases with which it is possible to make long-term predictions. It is an intuitive and easy-to-use program that becomes the reliable platform to know where to direct operations.
Eliminate duplications
Many companies seek to improve their productivity, but cannot find how to do it because they do not know which areas they should work on. Therefore, with ERP software it is possible to automate tasks, eliminate duplication of information and excess activities that only affect the operational capacity of the company.
It helps optimize response times, standardizes operations, allowing for greater control, eliminates downtime, and all of this together makes employees work more efficiently.
Modular system
Each company has its specific work areas according to the sector it belongs to and by integrating an ERP it is possible to install its functionalities in them. That is, the modular design of this software allows you to choose the components that you want to implement.
There are basic modules that help all companies, we are talking about the purchasing, inventory, sales, human resources and accounting module, but new modules can be incorporated to continue improving the areas.
Flexibility and adaptability
The flexibility of an ERP software refers to its ability to adapt to different needs, which is closely related to the previous point of its modular design, but it must also have compatibility with other applications with which it can be improved even further. the processes.
On the other hand, its adaptability helps it satisfy the particular needs of each company and at the same time, it seeks a simple integration, since an optimal and adequate system is one that adapts to the company and not the other way around.
Maintain security
Data security is a priority at all times and a specialized system like this helps protect all of your company’s information and minimizes the risks that can put databases at risk by mishandling them.
The ERP is responsible for detecting threats of theft or leaks, prohibits access to unauthorized users and constantly creates backup copies to eliminate detected errors.
Customer and supplier integration
One of the best advantages that the ERP system offers is the integration and customer management and suppliers, which allows for a notable improvement in profits, since the tasks and procedures to be carried out can be managed, taking into account the requirements of each one.
In this way, it helps to integrate a logistics activity into a single platform and also improves relationships with suppliers and customers by having both parties involved satisfied with their performance.
Automation of activities
Without a doubt, one of the biggest changes when integrating the advantages of an ERP is the automation and simplification of processes, that is, it replaces manual procedures with new and improved systems that integrate all areas of the company, increasing productivity and efficiency. and reduce human error.
Disadvantages of ERP
Initial costs
When you have in mind to acquire an ERP, the first thing that is considered is the cost of this software and this can be considered a disadvantage because it is usually a «high cost», but in reality in the short, medium and long term it turns out to be one of the best business investments.
Training for staff
The management of this type of systems requires prior training of the company’s personnel, since when they know and know how to implement all the functionalities of the ERP it is possible to take full advantage of its advantages. However, this requires adaptation and time from each person.
Updates
Depending on the ERP provider that is acquired, at a certain time the system may need updates that the company must pay an additional amount to implement and, in addition, this may mean new staff training.
Implement an ERP system for your company with QAD Mexico
At QAD we know the advantages and disadvantages of an ERP, but our activity is aimed at maximizing its functionalities so that companies can implement this system effectively, quickly and safely. Adapting to new business needs is easy when you have the support of an expert company.
Currently, strategies have become obsolete, if your company is looking for new areas of opportunity and growth, a solution ERPIt is what you require to renew your objectives, face new challenges and, above all, continue satisfying the needs of your clients.
