To run a business well, you need experience, skills, and business sense, but most of all, you need to be smart about how you manage business processes and take advantage of the benefits of enterprise resource planning. Modern markets are very competitive, so business owners have to take advantage of every chance they get, including technological advances, to maximise efficiency and stay ahead of their competitors.
ERP systems have been at the top of the business software solutions field for a long time. This article will explain why this is happening by going over the benefits of ERP and answering the question, “What are the cons of ERP?”
ADVANTAGES OF ERP
It has already been said that enterprise resource planning software gives you a lot of powerful opportunities that a skilled person can turn into money-making benefits. So, let’s get right to the point and talk about what enterprise systems could do for us.
- Higher Management Performance
ERP solutions are like a data centre that connects all of the parts of an enterprise that need to be managed, such as production, sales, customer service, inventory, and supply. With the help of computer technology, ERP software makes it possible for data to be handled automatically and in the most efficient way.
The main benefit of enterprise resource planning solutions is that they cut down on paperwork and the need to enter data by hand. Because of this benefit, people are much less likely to make mistakes that can slow down production. Also, there is no need to turn data that is stored on paper into a digital format, which frees up people to do other things
2. Better accuracy and availability of information
This is the main benefit of enterprise resource planning that affects all the other benefits on this list in some way. Modern ERP systems make it easy to collect, process, and store information about production, sales, supplies, or customers in a central location. So, one data system is used and kept up to date instead of a number of separate databases that need to be checked and synced regularly to get rid of old or duplicate records.
When the quality of all kinds of internal data goes up and it’s easy for staff in any relevant department to access it, it’s a huge win that helps improve performance on all levels of the business. The activity that benefits the most from ERP implementation is managing the supply chain and stock.
3. Improved Coordination
All business-related information is stored in a single system, which makes it easier for business branches or departments to work together. ERP software makes it easier for everyone in a company to talk to each other faster, which makes the company run better. This is especially helpful for companies that have affiliates in different states or even on different continents.
4. Precise planning
The ease of getting to a lot of business information makes it much easier to analyse it and plan for its future growth. The company’s managers and business analysts can use the combined data to come up with better ideas for new strategies or ways to improve the ones they already have.
5. Enhanced reports
As a result of less paperwork and better communication between departments, ERP software makes it easy to submit all kinds of reports quickly and easily, from financial to inventory, from customer behaviour to technical maintenance, and so on.
6. Scalability and flexibility
Another benefit of ERP software is that it is built in a way that lets it be scaled up or down depending on what is needed at the time. Because of this, a resource planning system is easy to change as the company grows or shrinks on any level.
Even small changes in the way a company is set up and runs, like adding new products, workers, production facilities, suppliers, departments, etc., require ERP solutions to be very flexible. ERP systems can handle all of these changes and a lot more, like a rise in production, a bigger inventory, or the addition of new functions, services, or users.
ERP systems can save money on administrative needs because they cut down on paperwork, improve daily routines, and, most importantly, get rid of repetitive tasks. Also, resource planning solutions speed up the parts of a business that require a lot of information requests and approvals, like logistics, stock and supply management, and others.
8. Easier access to management information
ERP systems can be set up as web or mobile apps that use cloud technologies, depending on the specific needs of resource planning. So, they can run on smartphones, laptops, and other portable devices and can be accessed at any time and from almost anywhere.Improved customer satisfaction
9.Improved customer satisfaction
Modern ERP software also helps improve customer relationship management, which is very useful. A centralised data storage gathers all the information about sales and customers that is needed. This makes it easier for sales managers and customer service staff to talk to customers and respond to their requests faster.
In addition to the other benefits listed here, you can also get to customer histories faster and with more accuracy. For example, carefully collecting and analysing data on how customers act can help improve strategies or make more accurate predictions of demand that must be met in the right way and on time.
10. Better competitiveness on the market
This last benefit is a summary of all the others from the point of view of how much money a business makes. The point is that ERP systems give businesses an extra tool to beat their competitors, which is exactly what they need. Some businesses stick to tried-and-true methods or can’t afford ERP solutions, but others use new technology to improve their businesses and make money.
DISADVANTAGES OF ERP
ERP solutions have undeniable benefits, but there are also some problems that need to be looked at before a business company tries to use these enterprise resource planning systems. If a business owner doesn’t find ways to get around and get rid of these problems, an ERP solution won’t work well or won’t work at all.
- Large cost of licensing and development
ERP solutions are very complicated, and building them is a hard and expensive process. To build a resource planning system that meets the needs of the customer, you need a large team of experts with a lot of experience. High-skilled people need to be paid a lot per hour, so a custom-made solution may cost a lot.
Ready-made ERP systems are faster, but they also have high licencing costs. The lower prices of ready-made solutions come with less flexibility, longer customization times, possible maintenance and security risks, and even problems with how the business works and what it needs.
- High costs to deploy and maintain
If you think ERP systems are too expensive, I have some bad news for you. Implementing and keeping up with these solutions costs even more money and requires hiring more tech workers. As for ready-made solutions, they need to be updated regularly, which may cost more money. But keep in mind that these investments will eventually pay off because they will make the whole business more efficient.
- Requires training and practice
Because ERP software is so complicated, the people who use it have to do more things. It can take a lot of time and work to learn at least the basics of a resource planning system, and a lot more to learn how to use all of its features.
When experienced ERP system users leave a company, their replacements have to take a different amount of time to learn the system from the beginning instead of being able to start work right away. But you can make it easier for people to learn if you give them enough manuals and training programmes ahead of time.
- Requires tweaking
For ERP software to work well, it needs to be adjusted in a thorough and precise way, from a lot of customization to fine-tuning. On all levels of management, both ready-to-use solutions and custom-made systems need to be adjusted to fit the structure of a certain business.
- It takes time to realise its full potential
As you can see from the cons listed above, EPR systems need a lot of time to be used in the best way. In addition to the long time it takes to build, there are also delays during deployment, system customization, initial data entry, staff training, and getting used to the new system.
From the article and the infographics that go with it, you can see that ERP systems are not all-in-one solutions that guarantee success 100 percent of the time. Instead, they have a number of pros and cons that must be taken into account when deciding whether or not to use them and how profitable they are.
Even though there are a lot of different commercially available and custom-made enterprise resource planning systems, the benefits they offer are mostly the same. In short, they save time and money, improve productivity and customer satisfaction, streamline business processes, centralise all data flows, and make it easy to grow. If you want to bring these benefits to your business, Light IT will be happy to help you do so.