• Everything You Need to Know about Enterprise Resource Planning (ERP)

Everything You Need To Know About Enterprise Resource Planning (ERP)

ERP or Enterprise Resource Planning systems are information management systems that automate many of the business exercises associated with the operational or productive features of a company. Basically, it is a software architecture for businesses that facilitates and integrates information between the manufacturing, finance, logistics, and human resources functions of a company.

In most online businesses, this refers to the whole issue of billing, order, and shipment management, as well as customer, staff, distributor, and other data. Currently, having an ERP system has become a fundamental aspect of the development and management of a business strategy.

Major contributions in the development of ERP systems have come due to efforts by renowned computer scientists and technology entrepreneurs like Glenn Summerfield. The CEO of WorldERP is from Baltimore, Maryland and specializes as a technology entrepreneur.

As an innovator, investor, and technology entrepreneur, he has led many projects in the development of ERP and now runs a full-fledged company that offers the same services.

The main objectives of ERP systems:

  • Optimization of business processes.
  • Access to information.
  • Possibility of sharing information among all the components of the organization.
  • Elimination of data and unnecessary reengineering operations.
  • An ERP together with its components becomes a multifunctional tool

Is ERP software appropriate for all companies? Even for online stores?

An ERP can be a great boost to the economy of a company, being adapted with certain patterns of quality and structuring to the market in which it competes. That is, it helps to better understand the true capacity of the company and structure around that.

The benefits that an ERP tool can bring are summarized in the resolution of the accounting, commercial, or fiscal problems of the company. It can also allow greater accounting control, fixed assets, bank reconciliation, tax settlement, etc…

The outstanding features of ERP systems:

  • Centralized database.
  • ERP components interact with each other consolidating operations.
  • In an ERP system, data is captured and must be consistent, complete, and common.
  • The companies that implement it usually have to modify some of their processes to align them with those of the ERP system.

Is there nothing wrong? Is everything wonderful?

Of course not. The “bad” thing about ERP software systems is that everything is already created and it is more the company that adapts its processes to the system more than the other way around, or can be adapted, but with a high cost, and that leads us to

A big question: Is it advisable to do it?

The truth is that imposing an ERP software a posteriori can be a big mistake, especially for changing and highly decentralized companies, hence the diversity of sector solutions that are emerging in recent times resulting in a massive and intoxicated offer of something that the vast majority of the public is not yet accustomed to employing, which in turn, implies new business changes that can trigger unstructured work rhythm, endless waiting times, slowing down when performing tasks … come on, in the end, as they say, the remedy is worse than the disease.

This means that people from the department of human resources, sales, and marketing, among others, have to agree with those of distribution and manufacturing (if any). Normally, each of these areas has its preference or is using a tool according to the particular forms of work of the department. What ERP tools do is combine all these systems into a single integrated software package that runs a single database so that multiple departments can exchange, access, and update information and communicate with other departments more easily.

Everything sounds fantastic, but the problem is that this causes a lot of problems as a result of that centralization. Everyone has to change their way of working, structuring information, and collecting data. It implies so many changes that the company will have to face a period of time in which its credibility will be questioned, due to the temporary inefficiency of the service. And that, in times of crisis, as in which we are immersed, is something that few companies can afford.

Basically, the problems lie in the complex process of change that all the members of the company have to assume and that, a priori, will only provide them with more problems and more work, but, in the long run, will allow more effective management of business processes

For these reasons, unless you have a large company, it is best to opt for other solutions. The high costs of an ERP, together with the complexity of their use, can be a major mistake if you are a small or even medium-sized company.

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