What is ERP software? When should businesses use ERP software? Is ERP really “effective” when applied to businesses? Let’s find out in the article below!
Technology is growing, not only big businesses but also small businesses want to increase productivity and better manage their resources. Many businesses have come to ERP software as an effective solution to help them solve this problem well. So what is ERP software? What are the benefits and limitations when businesses apply to businesses?
1. What Is ERP Software?
ERP stands for Enterprise resource planning which is understood as enterprise resource planning. Application of information technology solutions to managing and collecting business activity data. Instead of having to use a lot of software for many different departments of the company, the tools will be integrated together. Helping optimize the cost as well as maximizing the efficiency of management.
2. Benefits Of ERP Software For Businesses
Reduce operating costs
This is a problem that any business is going to find a job. ERP software will unify the data flows, limit manual jobs, and optimize employee performance.
Elimination of redundancy
Eliminating manual tasks that cost a lot of effort, such as reporting, data, etc. Now, with the most accurate data collection system, it does not take much time to review.
Security of enterprise information
Instead of spending a lot of time synthesizing reports from committees, passing through many people. Data is only given to those who are competent to resolve. This makes “unintended” information not leaked to the business.
Improve the relationship between customers and suppliers
If before, customer interaction with suppliers must go through many intermediaries. Aggregate data takes time, sometimes not knowing exactly what customers want. Many employees who are in charge of a customer cause overlapping information and confusion.
With the use of ERP software, employees will immediately have access to the system immediately to capture customer information quickly.
All workflows are optimized. Now it is easier than ever to check your work history and work schedule announcement. Since then, the system helps businesses increase labor productivity
3. Limitations Of ERP Software
Any software has limitations. ERP is not an exception.
Large investment costs
The cost of investing in an ERP system is quite expensive. And usually calculated according to the number of users used. Therefore, not all businesses have strong financial resources to apply ERP to their businesses
Besides, with the ERP system, there are many other services such as updated version and other related software. This makes the cost much more for the team
Extended deployment time
The process of implementing an ERP system can take a long time, usually about 1-2 years. Not to mention that businesses need to optimize and re-plan their resources accordingly. And of course, this planning process is not easy.
The Final Words
The above are the benefits and limitations when using ERP. Using ERP software will help businesses solve many problems. However, the successful process of implementing and applying ERP is a long way. In short, enterprises should objectively evaluate both sides to make optimal choices for their businesses.