Carlos-barraza-logo-50

What is ERP and how does it help companies?

For a company to remain operational and generate revenue, it requires certain operations and processes, often routine, but essential to keep everything under control.

However, thanks to technological advances today it is possible to have an enterprise resource planning system that does all this easily and cost-effectively; discover in this post what is ERP and how it helps companies?

What is ERP and how does it help companies
Written by

This post is also available in: English Español Deutsch Italiano Français Русский

Table of Contents

What is ERP?

ERP stands for Enterprise Resource Planning, which translates as the planning of business resources through a series of software applications that work in an integrated manner to enable the automation of common processes within a company.

In other words, by using an ERP all the functions of a business can be centralized in digital applications created to control processes such as purchasing, production, warehouse, logistics, human resources, marketing, projects, services, customer service and more.

Many companies have begun to enjoy the versatility of ERP, since it is software that operates in the form of modules and in turn can be expanded, implementing any additional functionality required by the company at any given time and without the need to invest large sums of extra money as part of its digital transformation.

startup business, software developer working on computer
Business people installing software

Importance of implementing an ERP

Using an ERP within your company will be a step towards its digital automation, as it facilitates the organization of all processes according to the available resources in order to reduce costs and increase revenue, without losing sight of the relationship with your customers.

With ERP applications you can centralize information, record it in real time and make it available to all departments involved with just one click. This is extremely useful, as it simplifies tasks, reduces operating costs and avoids wasting valuable hours with paperwork or other types of paperwork as part of the traditional procedures within your company.

Once you install the ERP in your business, the next step will be to unify all the data coming from the different departments, whether it is finance, production, warehouse, distribution, human resources or any other, to avoid duplication and facilitate the flow through the digital system.

In short, it can be said that implementing ERP software is necessary to address operational problems that often arise in companies and for which the solution is already known and can be precisely applied in an automated way.

When the company faces a crisis, it is imperative to make timely decisions quickly and for this ERP is vital, because you will have all the information classified and organized instantly, so you can take a look before deciding the way forward.

Advantages and disadvantages of an ERP

In recent years, changes have been experienced in the lives of human beings, which in turn have led to many companies having to adapt to the new way of life in order to continue generating profits. 

Therefore, implementing an ERP will be the basis to start optimizing your business operations, efficiently managing your resources to generate only the expenses that are essential to maintain a favorable profit rate.

ERP will provide your company with a series of advantages, not only in the reduction of expenses or improvement of its image through marketing, but also with respect to the following:

In your company there is vital business information for its development, to which you want to have access securely and quickly, which you will achieve by maintaining a database that you manage efficiently through an ERP.

In spite of all the benefits that an ERP will bring to your company, the more customized it is, the higher the costs you will have to spend to keep it running.

Following this order of ideas, it is appropriate to consider the disadvantages that could be associated with the implementation of an ERP, since precisely the preparation of your business processes for coupling it to the automated system is already a negative factor, since it is not a quick change, but in many cases requires adaptation of infrastructure or specialization of some employees in the management of digital tools.

In reality, these should not be considered disadvantages but rather limitations, since to evolve it is essential to make sacrifices and take risks. Therefore, if you want to acquire an ERP suitable for your company, you must make an investment and have the ability to maintain it over time. 

Additionally, you should consider that the more customized the ERP system you choose for your business, the higher the acquisition and maintenance costs will be, but this investment will be justified when you begin to experience an improvement in the internal processes of your company.

Over time you will begin to reduce costs, reduce the time required in production and distribution chains, improve communication with your customers and be able to closely manage your image in the commercial world, evaluating the preference of your products over those of your competitors.

References
More about Digital Business.