Enterprise resource planning (ERP) is a software that helps businesses manage several different assets, such as financials, operations and human resources.
It lets companies use a set of integrated applications to manage those same assets and helps automate a range of back office functions.
The term ERP was coined by Gartner in 1990. Today, ERPs are a crucial part of any company day-to-day operations. Before implementation, businesses need to find which solution in the market that gives them the best benefits as there is a wide range of providers out there.
The main benefit of an ERP is the real-time full-scale picture it paints and presents of the business. For example, a company owner can easily access all the information regarding all core business assets through a user-friendly desktop display.
Overall, ERP also enters the business intelligent (BI) field. By harvesting, processing and helping managing the company through data, businesses are able to take more reactive and correct decisions which will go down well with their needs in most occasions.
Having said that, this then deescalates into every single one of the specific business assets.
In the financial department, an ERP software will help with with financial management giving insights into cash flow and accounting.
For supply chain and operations management, companies are able to streamline their purchases, manufacturing processes, inventories, and sales order processing.
When it comes to HR management, an ERP system can easily help manage all related employee issues, such as hiring processes, management and salary payments. In the end, an ERP can also help a company keep track of the best performing employees and help them keep those same employees which are a value to the business.
Elsewhere, ERP also lends a helping hand with improving project management by providing billing services and project monitoring.
In addition, it can also benefit businesses when it comes to customer relationship management (CRM), by helping with monitoring business-customer interactions. With the collected data, the ERP can showcase to the company where work is needed in order to improve that same relationship with consumers.
However, ERP software also has its disadvantages. For example, it usually has a high cost of implementation and maintenance, and there are not that many people out there with the skills to solve ERP related technical issues.