Nowadays, many companies need an ERP, but … Do you know exactly what an ERP system is and how it can benefit a company? Read on to see first-hand the relevance of these systems.
What is an ERP system?
An ERP software definition is next:
An ERP system (Enterprise resource planning or enterprise resource planning) is a business administration software composed of different modules that manage each area of a business and automate its internal processes. Subsequently, the data generated is shared with all departments, resulting in a unified system.
One of the objectives of these systems is the integration of the company's back office processes and the facilitation of the information flow, so that business decisions are based on data.
Thus, ERP management systems record and organize data, at the same time connecting the activities of the departments of a company. At the same time, standardize and automate business processes and improve the efficiency of operations.
At the same time saving time and money, Enterprise resource planning systems ensure that workers work with the same data and can see KPIs (Key performance indicator o key performance indicators).
3 characteristics of ERP systems
Now that you understand what an ERP system is, you should know that, even though in almost all ERP both the scale, scope or functionality varies widely, most offer the following features.
1. Integration across the company
Business processes are integrated between departments. This means that if there is a new order, a credit check starts automatically, product availability, at the same time updating the distribution schedule and sending the invoice at the end.
2. Real-time operations
Since the processes happen automatically, problems also do. This gives the seller precious time to correct the situation..
3. A common database
Since the data is recorded only once, all departments can access them at any time.
Types of ERP
ERPs are generally classified into different levels based on the size and complexity of the companies they serve. The usual levels are generally:
1. ERP level I (nivel I)
These enterprise resource planning systems support large global companies and manage affairs internationally..
2. ERP level II (level II)
For this case, an enterprise ERP system is compatible with companies operating in several countries, but not on a global scale.
3. ERP level III (level III)
They are the enterprise resource planning systems that support medium-sized companies, who often manage different languages and currencies for their businesses.
4. ERP level IV (nivel IV)
These ERPs are aimed at SMEs and are designed for accounting, therefore, they are not usually considered complete ERPs.
3 advantages of ERP systems
When looking for what a secure ERP system is, you also want to know some of its advantages, truth? An ERP business management system can improve business performance in several ways.
1. Internal efficiency
These systems allow companies to make the most of the time necessary to carry out business processes.
2. Improve decision making
An ERP promotes collaboration by sharing the data obtained in the organization, which enables departments to spend their time analyzing them, draw conclusions and make better decisions.
3. Greater agility
Both standardization and simplification result in less rigid structures, so the company can quickly adapt to situations.
Why integrate an ERP in the company
ERP systems improve business efficiency and effectiveness, Given the:
They integrate financial information
If ERP was not used, different company departments would use different independent software tools, with different income and expense figures.
They integrate the orders
ERP systems coordinate orders, manufacturing, inventories, accounting, distribution, etc. Evidently, with an ERP there is less tendency to errors than if there were several independent systems that organize each part of the procedure.
Provide insights from customer information.
Many ERPs have CRM tools designed to monitor interactions with customers who, when combined with order information, deliveries, returns or service requests, among others, provide information on customer behavior and needs. .
Standardize and accelerate manufacturing
Thanks to ERP systems, manufacturing and support processes can be standardized and automated. This saves time, increases productivity and reduces the number of workers needed.
Standardize human resources information.
ERPs enable workers to manage their personal information. At the same time, make reporting easy, expense tracking, vacation and leave requests, training …
Through the registration of information in a repository of human resources, Identifying the profiles that best suit the required competencies is very easy.
Standardize provisioning
ERP purchasing tools make it possible to identify the most used products and services in the company and negotiate directly with suppliers.
They facilitate the presentation of documentation to the administration
Since ERP systems are usually integrated with accounting departments, generates the necessary documents to comply with the corresponding tax obligations.
