Enterprise Resource Planning (ERP) is a system with a shared database supporting several business functions. Different divisions in an organization can use ERP-dedicated software to access information to help accomplish specific tasks. An ERP software can help complete certain operations like merging generated reports, flowing financial data with re-keying, and managing orders. Set your expectations when using ERP software as it’s not an all-in-one system. Here are a few advantages and shortcomings of using ERP applications:
ERP systems are beneficial for organizations in various industries. These applications help businesses to operate smoother by streamlining different tasks. Below are a few excellent benefits of using ERP.
- Centralized IT Costs
ERP software like Brightperl can help your business focus its IT costs and improve efficiency. You’ll save valuable resources by relying on one application instead of trying to maintain multiple systems. Also, your firm doesn’t have to hire an additional workforce, build more infrastructure, or acquire more licenses as all fees regarding resource planning falls under one program.
The use of an ERP software also helps reduce training requirements for all end-users regardless of their position in the company’s job hierarchy. ERP system developers may design their applications to become modular. Programmers may develop and install patches to the program to benefit business departments such as accounting, HR management, and customer resource management (CRM).
- Immediate Access to Information
Sharing business data is possible and comfortable with the use of reliable ERP software like SAP. Employees can share various information to different departments in an organization. Gain access to accurate, timely, and authentic pieces of information to help improve proper communication among the business’ units.
- Decision Making
The speed and quality of decision making improve with the availability of consistent information. Management teams can identify potential operational issues, which may affect delivery times or productivity levels. Finance teams can also remain updated with works in progress and inventory stocks. As for the Human Resource department, the use of ERP can help recognize the need for the additional workforce or employee deployment to specific departments.
- Enhanced Reporting and Planning
Implementing an ERP suite to the different divisions in a company creates a unification for the business’ reporting system. You and your staff members gain access to a single source of data to readily give employees useful analytics and reports at any desired time. Use the system’s ability to analyze and compare business functions to foresee possible bottlenecks in productivity.
It’s essential to know both sides of the story when you’re choosing an ERP software for your firm. Understand the drawbacks and risks associated with this system to ensure transparency during use. The following are a few disadvantages to using this system in your organization.
- High Initial Costs
A traditional ERP system might present companies with a five-figure cost for one license. Startup firms might have difficulties in stretching their budgets to deliver this streamlined solution to their various departments. You may limit the number of features you get from an ERP software to save on fees, but that choice also restricts the overall usability of the system.
- Required Training
Different ERP software has distinct functions that separate one from the rest. Employees need training on the various features to use the software properly. All staff members need to understand how the new system works to modify and streamline large business structures. Companies may want to hire external experts to train workers regarding the system, but that may add to the overhead costs.
- Additional Software and Hardware Investment
Like any computer program, ERP systems have a minimum requirement of computer software and hardware systems for it to run correctly. Failure to supply the software with the required specs may result in lags and crashes during use.
- Data Migration
If you’re moving from one ERP solution to another, migrating data from another system can be difficult and time-consuming. Your firm’s IT personnel might not have the extra time to spare if they’re already working on other projects. You might want to work with an experienced data migration professional or ERP specialist to help in transferring systems.
Weigh the pros and cons when you’re on the lookout for a good ERP system for your firm. ERP for the manufacturing industry and other business sectors can become a valuable asset, which can lead to the accomplishment of various company goals. Still, it’s important to understand the shortcomings that come with the purchase and implementation of the centralized software. Ask an ERP software provider for additional details regarding the features that come with the execution of the system for your organization.