What ERP stands for?
In this article we are going to give an explanation to the definition of the ERP system and describe its features in detail.
Why did we say the majority and not all the data? Because while processing all the data is possible, it requires a lot of money for data storage and processing capacities. That is why lots of companies prefer to use ERP to manage only its main activities (e.g., production, distribution, control, etc.).
Therefore, management of the company together with software specialists come with a cost-effective solution: ERP collects the data required to control personnel and make critical decisions, and everything else is allocated in other systems that are used when needed.
It drastically increases the speed of information exchange between business divisions. For example, if a sales team-member has marked an order as closed or canceled, specialists of delivery and storage services will be able to see it right away. Therefore, the order will not get sent twice or left forgotten.
When a small company can take care of odd or sizable orders without using an ERP system since all their employees are together in a tiny office, the midsized business struggles since it has more personnel, divisions, and orders to handle. That is why having a single database that unites all of them together is critical to comply with fluctuating customer demands. It is crucial that all information is gathered in a short period to make sure that essential procurements are carefully planned to omit any failures.
- Data availability
- Data consistency
- Performance control
- Reduce error level
Another problem that often occurs with ERP implementation is data security. Since all departments and employees of the company work with one software, it is necessary to configure access rights for everyone. And if usually, you need to create several access levels for an ordinary employee, the head of the department, and the manager correspondingly, setting up the access rights structure in the ERP is much more complicated.
There you need to configure the access hierarchy to the modules for different divisions separately. Such an advanced setting often leads to errors and requires extra time for testing and debugging.
Besides, the use of a single system with a single database with all its advantages also contains a specific problem. If for one reason or another, the ERP system stops functioning (due to a blackout or server problems), the work of an entire company will stop. It is necessary to pay proper attention to the reliability of the server part and its timely maintenance.
Plus, make sure to keep in mind that just like all complex business management systems, the implementation of the ERP results in massive spending not only on the system itself but also on training personnel and transition period.
Each company is unique, so figuring out whether it's worth the hassle takes time. Only the correct analysis of on-going processes and their efficiency can tell you whether it'd be profitable to purchase and integrate ERP. After all, there are different types of software for business automation to suit various purposes.
If you think you need an ERP and need someone to clear you up on the technical part, please, contact us. We will we glad to answer your questions.