Everything you need to know about ERP software
By helloDarwin
August 28, 2017

Everything you need to know about ERP software

As a tool for managing various operational processes, ERP has a significant impact on the performance and growth of a company. The following article aims to highlight the main consequences of its implementation and provide specific information about it.

What is an ERP system?

While a company pursues the ultimate goal of generating profits and defines itself primarily by its offering of services or products, its internal mechanics are equally significant.
This is where the ERP (Enterprise Resource Planning) comes into play, which is software designed to manage the various data exchanged between the various departments of a company. Its main function is, therefore, to organize information, whether related to accounting, project and work hour control, inventory management, customer, or sales. Since the ERP consolidates all the information circulating within the company, its role is also that of a centralizer.

The difference between CRM software and ERP software

Before highlighting the differences between these two types of software, let's first define what a CRM is. A CRM (Customer Relationship Management) is software primarily aimed at managing a company's customers and optimizing sales from this customer base.
While it has organizational and centralization functions that bring it closer to ERP, its mission is more limited than the latter. It focuses exclusively on processing information related to the sales process.
Everything related to accounting, project management, or hours related to its completion is not handled by the CRM software. As it focuses exclusively on sales-related data, the accuracy of this data is greater than that processed by an ERP.

The benefits of using an ERP

As the main functions of ERP, the organization and centralization of information embody two significant advantages resulting from the implementation of such software to ensure the management of the company's processes. Starting from this idea, it must be said that the interconnectedness of information enables real-time updates. Thus, one can be assured that the mentioned information is accurate, with corrections imposed by various changes occurring automatically.
The interconnectivity of information and, therefore, the departments to which they are related ensure better tracking of different operations and make their sequence smoother. All this information grouped and concentrated in the same space also allows constant monitoring of the productivity of various team members and consequently, increases their productivity.
In a completely different context, it should be noted that there is a considerable monetary benefit to using a single software to manage all operations. Using software for each area of activity, of course, involves additional costs.
Next, it should be emphasized that the self-coordination of information by an ERP also limits their overabundance, which is often caused by the redundancy of information being repeated from one department to another.
As a company owes most of its success to its ability to meet the needs of its customers in a respectable time, effective coordination of external and internal information will also have a major impact in this regard. More efficient and faster processing of information leads to this improvement in deadlines for making a sale and providing the requested service or product to the customer. Thus, an increase in customer satisfaction should logically lead to an increase in sales.
Once again, centralization has positive consequences. This time, it is first regarding the traceability of data that this influence is felt. As the information is concentrated in a single software, it is indeed much easier to trace its origin. Secondly, their grouping avoids forgetting certain parameters in the calculation of forecasts for future performance.

What are the disadvantages of an ERP?

Firstly, the use of the software can be very costly if its level of complexity is high, ranging from a few hundred dollars to a few thousand. Regarding the implementation of the software, fees are also to be expected for the training of those who will use it on a daily basis.
As for the implementation of the software, it is impossible to ignore the complexity of the process that characterizes it. Indeed, the changes brought about in terms of data processing and organization will require employees to change their ways of doing things. This will be followed by a period of readjustment whose duration will vary depending on the flexibility of employees and the complexity of the software. In order to limit the scope of the effects related to its implementation, it is, however, possible to choose an incremental approach and proceed gradually.

ERP: software or package?

Often defined as application software due to its ability to meet the specific needs of a field of activity, ERP is also known as a package. The combination of the terms "software" and "product" implies that the software is also a product because it is provided by a publisher.
Karine Dutemple
Related Tags
Management software

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