ERP is the achronym for Enterprise Resources Planning and makes reference to the software and systems used in a company to integrate and manage all of the processes of an organization, either clients, inventory, purchases, sales, accountability, human resources, manufacturing, etc.
The main feature of all ERP systems is a shared database that supports multiple features used by different business units. This actually means that the employees from different departments, for example from accountability and sales will have specific permissions for accessing that information and thus carry out your tasks.
That entails more than remarkable benefits for companies and most of the companies are aware of that, even more so during the last couple of years where investment increases have been experienced. According to Gartner's study “Gartner Market Share: Enterprise Resource Planning Worldwide”, profits for ERP software globally increased by 11% from 2020 to 2021, reaching a total of 44.400 million dollars.
Currently, 47,5% of the Spanish companies that intend to adopt an ERP will do so in a Cloud model
That said, the question is... What advantages does an ERP bring in?
The advantages an ERP brings in to a company are multiple and beneficial, but let's see some of the most outstanding ones:
- Competitive advantages: It's true that the implementation of an ERP requires investments, but not having it may entail even higher costs or falling behind your competitors if they do implement it.
- It provides higher and further control on the value chain: Relationships and communications between the company, clients and providers improve and it allows adjusting orders to the needs of each particular moment.
- It makes inside and inter-department communications easier: The fact that all departments may have useful information about others at reach streamlines procedures and makes communications easier. Departments can work together, sharing information and collaborating.
- It allows automating tasks: Those repetitive but necessary tasks can be simply automated with an ERP and thus save your employees time.
- It is scalable: It is one of the most valued aspects; the modular structure allows development as the company grows.
- Efficiency increase: The advantages of an ERP translate into better resource handling and therefore cost savings and profit increase.
Types of ERP
Let's see next what types of ERP you may find, focusing on those regarding infrastructure. You may find the on premise ERP and the Cloud ERP. Currently 47,5% of the Spanish companies that intend to adopt an ERP will do so in Cloud model, according to a SoftDoit study, while 26,4% of them will do so on premise. Let's see now the differences between the two of them:
- On premise ERP (local) : It allows users to exert higher control on their company's data, but in addition users are the ones in charge of its security and updating process. It requires therefore specialized personnel. Bigger companies are the ones going for this kind of software.
- Cloud ERP higher and better control on the value chain: It is accessed through the Internet, it does not require installation and can be started to used right when creating the account. Here users don't have the same control as if were on premise, but they don't either have to worry about installation or security, since a special support team is in charge of that.
