The advantages and disadvantages of ERP software for companies
There are still companies today that work without ERP software. Those who belong to them should urgently think about changing this. The system simplifies many processes by mapping and controlling complex business processes. Large corporations usually already use this all-in-one solution, but even here there is still some catching up to do. SMEs in particular should not shy away from taking a closer look at this program. The following article sheds a little more light on what ERP means and what advantages and disadvantages it can bring to companies.
What is ERP?
ERP is the abbreviation for enterprise resource planning. The software is therefore responsible by name for planning the resources of a company. ERP achieves this by bundling all processes in one program, which is why the entire organization takes place digitally. As a result, the management software helps to quickly and easily get an overview of the business processes. As a holistic solution, the program covers almost all areas of the company.
- In merchandise management and logistics, ERP provides an overview of purchasing, warehouse management, and sales.
- In production, it controls production planning, the workshop and records the operating data.
- Finance reflects the accounting system and thus facilitates both accounting and controlling.
- Especially in human resources, it helps to manage employees, view their statements and also supports internal career planning through calculations.
What are the advantages?
Based on the functions, the advantages of ERP software are already very clear. The company only needs one software for all processes, which eliminates the sources of error. Due to the fact that the company only feeds one system with data, there are no duplicate data sets and all departments have access at the same time. This permanently reduces costs, as it extremely reduces the administrative burden. Customers are also more satisfied, as the companies can process and fulfill their wishes faster because of the custom enterprise software development. The overview of all responsibilities should be emphasized as well as the better planning of production requirements and warehousing.
What are the disadvantages?
Despite the many advantages that the software brings, there are of course also a few points that present companies with a challenge:
- Too much choice
- Introduction to the company
Especially the large number of manufacturers makes it difficult to find suitable ERP software. Therefore, there are now some websites that offer help to corporations. Because depending on the industry, size and needs, there are different systems that are recommended. So there are also differences in the installation. In the on-premises variant, for example, the installation takes place on the company’s own server. Local use was still standard until 2010, but there are now other access options that also have their advantages.
Fortunately, through trial months, companies have the opportunity to check compatibility. This allows the companies to see if they want to stick with the selected software or if there have been problems. These usually lead to the fact that the employees are overwhelmed by the operation. Therefore, a simple interface that every colleague can safely use is one of the most important criteria.
Accordingly, the biggest weak point lies in the introduction in the company. The software should replace the existing programs. Therefore, every employee must learn how to deal with the help of training. This is particularly time-consuming at the very initial point. The task of the managing director is to motivate employees to work continuously with the system even after the introduction.
The advantages clearly outweigh the disadvantages of ERP software. Therefore, there should no longer be a company that waives the use of this program. Rising profits usually convince the doubters additionally of their efficiency. As an important milestone in digitization, modern programs are important for every company.