ERP stands for Enterprise Resource Planning, a simple Google search will tell you that, but what exactly does this mean? How does it apply to your business, and what are the benefits of using it?
At its simplest application, ERP describes a tool to manage your company information. This helps to organise, store and collect data for the benefit of your business.
The standard method of managing company information, without an ERP system, is to juggle multiple software platforms such as CRM’s,accounting packages, spreadsheets and likely other systems to manage your warehouse. These services are great in principle, but using them in tandem with each other causes issues. They often don’t integrate well and the data is decentralised, leaving your staff struggling to keep a number of platforms updated which risks manual error. Not to mention that supporting this amount of software is time consuming and expensive.
Ideally, an efficient business will use one piece of software to manage all of their business processes. An ERP system achieves this goal by consolidating all the data from the various platforms into one centralised system, streamlining the flow of information.
Not only is this a lower cost solution, but it results in lower risk of manual error, leading to more accurate data being supplied. ERP systems essentially manage your entire business processes from production and stock to HR and accounting, with the focus being on centralisation and the provision of real time information.
The answer to this question depends entirely on the current and future situations of your business. ERP systems do boast a wealth of benefits, consider the following:
Whilst the advantages listed above certainly seem appealing, an ERP system cannot be said to suit all businesses.
Of course, if you’re accustomed to using multiple systems to manage your processes, you may find that an ERP system is an unnecessary change to make. In this case, it’s important for you to analyse what you want to achieve against the cost you are willing to spend. You may be satisfied with your processes as they are.
Alternatively, you may consider transitioning to a similar but less complicated system such as an MRP system, or Production Control System.
MRP stands for Material Requirements Planning and is a system designed to centralise and processes the purchases and schedules for parts required to build a product. These systems generally rely on a lot of manual input from users to obtain the necessary data.
Production Control systems predict, plan and schedule work to take place. They analyse the workforce, availability of materials and costs to meet required conditions in the most efficient manner and at greater efficiency. This software manages your business processes from quotation through to invoicing and streamlines everything involved in a production line without the extra, potentially unnecessary, features of ERP systems.
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