Implementing an ERP is becoming increasingly popular, not only within large companies, but also among SMEs.
The advantages of an ERP are numerous: from the perfect integration of the different departments of the organization, it is possible to automate tasks and respond to specific needs as the organization grows.
Against this backdrop, are there any drawbacks to ERP systems? In this article, we analyze the advantages and disadvantages of ERP systems. In short, why and what an ERP is for.
What is an ERP and what is it for?
Let's quickly recall that ERP stands for Enterprise Resource Planning or Enterprise Resource Management system. The objective of this system is to optimize the workflow within an organization, based on different functionalities that allow processes to be automated and centralized.
Among other things, it serves to improve the business management of organizations and to accompany them in their process of adapting to the needs of the business with respect to market dynamics.
What are the advantages of an ERP?
Considering the costs involved in implementing an ERP program, it is normal that financial management should evaluate in detail what an ERP brings to the company. Let's see what an ERP is for; that is to say, what competitive advantage can be developed with its implementation.
1. Centralization and unification
An ERP allows the centralization of the company's data in the same database. This is its main asset. The information is managed within a platform to which all members of the organization or structure have access.
2. Optimization of document management
This tool avoids the redundancy of information between the different poles of the company, as well as the restitution of divergent information between the different departments, which is a source of errors on a daily basis.
By sharing information, business units benefit from better coordination, making their actions more efficient and logical.
3. Integrity in management
ERP software is able to cover different key functions of the company and support its different departments, namely:
4. Greater control and traceability
Having a judicious follow-up of the company's documentation leads to a much more fluid internal communication, which contributes to a better and faster decision making.
The company's productivity is positively impacted, since the ERP solution centralizes and automates all processes and communications, thus covering all key functions of the structure.
5. Accelerated growth and expansion
Thanks to its intrinsic scalability, ERP gives companies the flexibility to consider possible restructuring. Whether at the management, organizational or communication level, ERP software supports companies seeking to give a new impetus to their business so that they can evolve in the direction they need to go.
6. Increased competitiveness
Optimized process management and centralization of information lead to improvements in processes such as order processing and stock management (input/output).
Because stocks are better controlled, actions such as sending invoices can be carried out on time, avoiding delays in payments. In short: the company's organization and incoming and outgoing flows are reorganized to be controlled and allow the structure to avoid organizational errors that have an impact neither on the company's finances nor on its competitiveness.
7. Internationalization
One type of organization that can benefit greatly from the implementation of ERP software is a multinational. Thanks to being a multilingual and multicurrency management tool, it automatically adapts to different international contexts.
Likewise, companies that need to manage subsidiaries in different countries and geographical areas can benefit from the standardization of human resources management that this type of system allows.
Disadvantages of ERP tools
Considering all the advantages that companies that use an ERP obtain, are there any disadvantages to consider? More than disadvantages, companies that opt for an ERP do face some challenges:
Start-up time. On the one hand, the migration of information can take a long time and, on the other hand, the training of people for its correct use can entail delays.
Cost. This may be true at first and depending on the type of company that is considering its implementation. However, today there are solutions that adapt to the needs of all types of companies, such as myGESTIÓN, which, in addition to being an invoicing software in the cloud, offers SMEs all the power of an online ERP. Its different configuration and customization options make it adaptable to most sectors.
ERP in the era of digital transformation
The implementation of an ERP makes it possible to consider an organizational restructuring based on the optimization and digitization of processes. With this restructuring, not only the company's structure benefits internally, but also its external relationships with customers and suppliers.
The advantages of an ERP are numerous: from the perfect integration of the different departments of the organization, it is possible to automate tasks and respond to specific needs as the organization grows.
Against this backdrop, are there any drawbacks to ERP systems? In this article, we analyze the advantages and disadvantages of ERP systems. In short, why and what an ERP is for.
What is an ERP and what is it for?
Let's quickly recall that ERP stands for Enterprise Resource Planning or Enterprise Resource Management system. The objective of this system is to optimize the workflow within an organization, based on different functionalities that allow processes to be automated and centralized.
Among other things, it serves to improve the business management of organizations and to accompany them in their process of adapting to the needs of the business with respect to market dynamics.
What are the advantages of an ERP?
Considering the costs involved in implementing an ERP program, it is normal that financial management should evaluate in detail what an ERP brings to the company. Let's see what an ERP is for; that is to say, what competitive advantage can be developed with its implementation.
1. Centralization and unification
An ERP allows the centralization of the company's data in the same database. This is its main asset. The information is managed within a platform to which all members of the organization or structure have access.
2. Optimization of document management
This tool avoids the redundancy of information between the different poles of the company, as well as the restitution of divergent information between the different departments, which is a source of errors on a daily basis.
By sharing information, business units benefit from better coordination, making their actions more efficient and logical.
3. Integrity in management
ERP software is able to cover different key functions of the company and support its different departments, namely:
- sales,
- inventory and stock,
- digital marketing and sales,
- accounting,
- purchasing,
- CRM, etc.
4. Greater control and traceability
Having a judicious follow-up of the company's documentation leads to a much more fluid internal communication, which contributes to a better and faster decision making.
The company's productivity is positively impacted, since the ERP solution centralizes and automates all processes and communications, thus covering all key functions of the structure.
5. Accelerated growth and expansion
Thanks to its intrinsic scalability, ERP gives companies the flexibility to consider possible restructuring. Whether at the management, organizational or communication level, ERP software supports companies seeking to give a new impetus to their business so that they can evolve in the direction they need to go.
6. Increased competitiveness
Optimized process management and centralization of information lead to improvements in processes such as order processing and stock management (input/output).
Because stocks are better controlled, actions such as sending invoices can be carried out on time, avoiding delays in payments. In short: the company's organization and incoming and outgoing flows are reorganized to be controlled and allow the structure to avoid organizational errors that have an impact neither on the company's finances nor on its competitiveness.
7. Internationalization
One type of organization that can benefit greatly from the implementation of ERP software is a multinational. Thanks to being a multilingual and multicurrency management tool, it automatically adapts to different international contexts.
Likewise, companies that need to manage subsidiaries in different countries and geographical areas can benefit from the standardization of human resources management that this type of system allows.
Disadvantages of ERP tools
Considering all the advantages that companies that use an ERP obtain, are there any disadvantages to consider? More than disadvantages, companies that opt for an ERP do face some challenges:
Start-up time. On the one hand, the migration of information can take a long time and, on the other hand, the training of people for its correct use can entail delays.
Cost. This may be true at first and depending on the type of company that is considering its implementation. However, today there are solutions that adapt to the needs of all types of companies, such as myGESTIÓN, which, in addition to being an invoicing software in the cloud, offers SMEs all the power of an online ERP. Its different configuration and customization options make it adaptable to most sectors.
ERP in the era of digital transformation
The implementation of an ERP makes it possible to consider an organizational restructuring based on the optimization and digitization of processes. With this restructuring, not only the company's structure benefits internally, but also its external relationships with customers and suppliers.