Summary
ERP is a comprehensive business management system that is designed to model and automate the majority of processes in the company (finance, commercial, logistics, production, etc.). Its mission is to facilitate the planning of all the resources of the company.
Kumar and Hillengersberg (2000) define Enterprise Resource Planning (ERP) as «configurable information system packages into which information is integrated through functional areas of the organization». ERP systems are extremely expensive, and once ERP systems are successfully implemented it brings a number of important benefits for companies.
Orton and Marlene (2004) define enterprise resource planning systems (ERP) as a system that allows information to be collected and consolidated throughout the Company.
ERP software plans and automates many processes with the goal of integrating information across the enterprise and eliminating complex links between systems in different areas of the business.
Introduction
issue
There is no doubt that the competitive environment that exists within the business environment requires improvements in business processes and activities that generate the competitive advantages of companies compared to their strongest competitors.
For this reason, for several years now, greater importance has been given to Information Technologies and their alignment with business strategies to improve their key business processes. Proof of this is the substantial increase in acquisitions of business software packages such as ERP (Enterprise Resource Planning), with which company managers hope to have integrated all the areas or departments of the company that support the generation of its products and services.
Today more than ever, companies require tools that provide control and centralization of their information, this in order to make the best decisions for their business strategies and processes. The ERP is a robust solution for companies seeking a universal solution to centralize your information.
The implementation of an ERP system is generally long and complex, since it involves redesigning the work schemes. Its implementation is high risk, since it involves complexity, size, high costs, a considerable development team, as well as time investment.
In most companies, it is required to replace the existing infrastructure, which implies additional capital investment, specialization and even the possibility of temporarily stopping the business for implementation: on the other hand, it is important to note that the degree of experience of the suppliers it is an important factor for the proper functioning of the system.
Literature review
Definition of ERP systems
Enterprise Resource Planning (ERP) systems are information management systems that integrate and automate many of the business practices associated with the operational or productive aspects of a company.
ERP systems are comprehensive management systems for the company. They are characterized by being made up of different parts integrated in a single application. These parts are of different use, for example: production, sales, purchases, logistics, accounting (of various types), project management, GIS (geographic information system), inventory and warehouse control, orders, payroll, etc. We can only define an ERP as the integration of all these parts. The opposite would be like considering a simple billing program as an ERP for the simple fact that a company integrates only that part. This is the fundamental difference between an ERP and another management application. The ERP integrates everything necessary for the operation of the company's business processes.We cannot speak of ERP at the moment that only one or a small part of the business processes is integrated. The ERP definition itself indicates the need for "Availability of all information for everyone all the time".
Reuther, D. (2004) in their article "Critical Factors for Enterprise Resources Planning System Selection and Implementation Projects within Small to Medium Enterprise" mentions that KC Laundon and JP Laundon, (2000) define enterprise resource planning systems (ERP) as a system of business administration that integrates all facets of the business, including planning, manufacturing, sales and finance (we can represent this in Fig. 1). ERP software plans and automates many processes with the goal of integrating information throughout the company and eliminates complex links between systems in different areas of the business.
The team should include technical people (who know how to work with the ERP system) and business people who understand how the company operates, although it must be recognized that expert personnel in the business are more important than both. The right person to manage an ERP project must know both areas.
The implementation of ERPs is not easy, it requires a long period of implementation, in addition to integrating various factors that lead to successful start-up. All areas of the company play an important role, from senior management to the Information Technology department. It is important that users are convinced of the benefits that will be obtained with ERPs, as this will facilitate implementation in the company.
Previously, only large companies could acquire this type of system, this due to high costs, however, nowadays, small and medium-sized companies are making inroads in the implementation of such systems.
Main objectives of ERP systems
- Optimization of business processes. Access to all information in a reliable, accurate and timely manner (data integrity). The possibility of sharing information among all components of the organization. Data elimination and unnecessary reengineering operations.
The fundamental purpose of an ERP is to provide support to business customers, quick response times to their problems, as well as efficient information management that allows timely decision-making and decreases total operating costs.
Characteristics of ERP systems
The characteristics that distinguish an ERP from any other business software is that they must be comprehensive systems, with modularity and adaptability:
- Integral: because they allow controlling the different processes of the company, understanding that all the departments of a company are related to each other, that is, that the result of one process is the starting point of the next. For example, in a company, the fact that a customer places an order represents the creation of a sales order that triggers the production process, inventory control, product distribution planning, collection, and of course their respective accounting movements.. If the company does not use an ERP, it will need to have several programs that control all the aforementioned processes, with the disadvantage that by not being integrated, the information is duplicated, the margin of contamination in the information grows (especially due to capture errors). and a favorable scenario for embezzlement is created. With an ERP,the operator simply captures the order and the system takes care of everything else, so the information is not manipulated and is protected.Modular: ERPs understand that a company is a set of departments that are interrelated by the information they share and that is generated from their processes. An advantage of ERP, both economic and technical, is that the functionality is divided into modules, which can be installed according to customer requirements. Example: sales, materials, finances, warehouse control, human resources, etc. Adaptable: ERPs are created to adapt to the idiosyncrasy of each company. This is achieved through the configuration or parameterization of the processes according to the outputs that are needed from each one. For example, to control inventories, one company may need to manage the batch partition but another company may not. The most advanced ERPs usually incorporate 4th Generation programming tools for the rapid development of new processes. Parameterization is the fundamental added value that any ERP must have to adapt it to the specific needs of each company.
Other notable features of ERP systems are:
- Centralized database. ERP components interact with each other consolidating all operations. In an ERP system data is entered only once and must be consistent, complete and common. Companies that implement it usually have to modify some of their processes to align them with those of the ERP system. This process is known as Process Reengineering, although it is not always necessary. Although the ERP may have modular menus configurable according to the roles of each user, it is a whole. This means: it is a single program (with a multiplicity of libraries, yes) with access to a centralized database. We should not confuse at this point the definition of an ERP with that of a management suite. The current trend is to offer specialized applications for certain companies.It is what is called sectoral versions or sectoral applications specially indicated or prepared for certain business processes of a sector (the most used).
How to implement an ERP system
ERP solutions are sometimes complex and difficult to implement because they need a customized development for each company based on the initial parameterization of the application that is common. The customizations and particular developments for each company require a great effort in time, and therefore in money, to model all real-life business processes in the application.
The ERP implementation methodologies in the company are not always as simple as one would like, given that multiple facets come into play.
There are no magic recipes or explicit scripts for successful implantations; only work well done, a correct methodology and aspects that must be taken care of before and during the implementation process, and even when the system comes into operation.
Therefore, before, during and after the implementation of an ERP, it is convenient to do the following:
- Definition of results to be obtained with the implementation of an ERP. Definition of the business model. Definition of the management model. Definition of the implementation strategy. Evaluation of opportunities for software complementary to the ERP product. Alignment of the structure and technological platforms. Analysis of the organizational change. Delivery of a complete vision of the solution to be implemented. System implementation. Quality controls. Audit of the technical environment and the development environment. Benchmarking of the implementation.
Steps in the implementation of ERP systems
- Organize the project: ERP systems could be classified as select systems that can only be implemented by some companies since the costs they represent are very high. In other words, when companies have the money, equipment, infrastructure, and personnel available to implement this type of system, it can be said that the first step must be taken, organize how it will work and develop the project that will give a new functionality and vision of the resources and processes of the organization to each area of the company. Define performance measures: When the project has already been proposed, the activities that must be carried out in order to carry it out must be defined. Even the smallest detail must be taken into account for the implementation of the ERP system. Create a detailed initial project plan: Like any project. The implementation of an ERP system implies an adequate distribution of time, employees, functions and resources: therefore, it is vitally important that each of the activities carried out be planned, that a logbook be built to guide each of the steps to follow. Train the team for the project: As the ERP systems are new, a training must be done in which each of the employees who later will be involved will be included. This implementation becomes a new situation that revolutionizes the daily work of human talent. Check the integrity of the database: It is one of the most important steps in the implementation of any information system, but especially of ERP systems. The database becomes the central axis of the process, it is in charge of storing, distributing and reporting the information to be managed at the different levels of organization. Install on new hardware: The hardware or hard part of the process is one of the biggest investments of the company, the old technology used by the company to install new equipment that can support the development of a system should be abolished. Install the new software: This becomes a pilot room or a test room which will be used throughout the system installation process. Continuous care must be taken of each of the steps carried out since the software is the spinal cord of the system. Train critical mass: Refers to company personnel, is defined as critical and refers to the person who will be directly related to the new system, that is, the one who will be in continuous contact and the person in charge of handling it.Pilot room training: Once the pilot room has been installed, it must be put to use by means of training that will be given to it by the personnel. Data integration: It consists of the collection of information from different sources or organizational areas that have been organized so far, this becomes the basis of the operation of the system. Execution: Starting the ERP system is not easy, you must go through all the previous stages taking into account that the success or failure in any of them can limit the execution of the system. Continuous improvement: Having a record of the development of the system, making a continuous feedback on it and implementing continuous improvement are the characteristics of the companies that have been victorious in the implementation of this type of system.
Benefits and impacts of implementing ERP systems
There are several points of view regarding the different benefits expected from an ERP implementation, as well as the impacts it will have on the organization.
It is important to mention that the different brands that create ERP software (SAP, Oracle, etc.) have their characteristic benefits. However, most ERPs have several benefits in common: Here are some of the benefits that could be obtained by implementing any of them:
- Just one system to handle many of your business processes Integration between application functions Reduces management costs Increases return on investment Open Source Infrastructure
These are simply several benefits that you can achieve by implementing ERP software for your business. As mentioned above, there are several ERP development brands, it is always good to make sure of the benefits that each of them offers, for this it is important to put a trial version before you decide to marry one of them.
The page www.cio.com in its article «The ABCs of ERP» mentions that there are five reasons why companies want to undertake an ERP:
- Integration of financial information. The CEO (Chief Executive Officer) always seeks to have financial information you will see, in his financial search he can find many different versions of the real one. Each department usually has its own financial numbers, finance has its own set of numbers, the sales area has another version and the different business units of the company can have their own numbers regarding how much they are contributing to the company. With the implementation of ERP, everyone will have only one version of the numbers, with this there will be no turning of the pages, everything will be unified. Integration of information on customer ordersWith ERP systems it is possible to centralize and follow up on customer orders, from the moment the order is received until the merchandise is filled. This instead of having several systems which are in charge of the follow-up of the orders, since in general communication problems between the systems originate. With ERPs this will be easier. Standardizing and streamlining manufacturing processes - Manufacturing companies - ERP systems come with standard methods to automate some of the steps in a manufacturing process. Standardizing those processes and using a single, integrated computer system can save time, increase productivity, and reduce head count. Minimizes inventory. ERPs streamline the flow of the industrial process more easily, and improves the visibility of the order fulfillment process by the company. That can cause inventories to be reduced,Helps users to develop better delivery plans regarding customer orders. Of course, to really improve the flow of the supply chain, it would be necessary to implement a system that manages said supply, however ERPs help a great deal. HR (Human Resources) information standardization - Especially in companies with multiple units of In business, HR may not have a simple, unified method of tracking employee time and communicating with them about benefits and services. ERP can take care of that.Standardization of HR (Human Resources) information - Especially in companies with multiple business units, HR may not have a simple, unified method of tracking employee time and communicating with them about benefits and services. ERP can take care of that.Standardization of HR (Human Resources) information - Especially in companies with multiple business units, HR may not have a simple, unified method of tracking employee time and communicating with them about benefits and services. ERP can take care of that.
To fix these problems, companies often lose sight of the fact that ERP systems or packages are nothing more than generic representations of typical ways of doing business in companies. While most packages are comprehensively comprehensive, each industry has its characteristics that make it unique.
Advantage
A company that does not have an ERP system, depending on its needs, can find many closed software applications, which cannot be customized, and are not optimized for your business. Engineering design for product improvement, customer tracking from acceptance to complete satisfaction, complex interdependency management of material receipts, real-world structured products, engineering changes, and overhaul, and improvement, and the need to develop substitute materials, etc. The advantage of having an ERP is that all this, and more, is integrated.
The change as a product is made in the engineering details, and is how it will now be made. Data effectiveness can be used for control when the change occurs from a previous version to the new one, in both products the data is directed towards effectiveness and some are going to suspend it. Part of the change may include the label to identify the version number (barcode).
Computer security is included within the ERP, to protect the organization against external crimes, such as industrial espionage and internal crime, such as embezzlement. A forgery in the data setting can involve terrorism by altering the receipt of materials such as poisoning food products, or other sabotage. ERP security helps prevent abuse.
There are concepts of marketing and sales (those that include CRM or the administrative relationship with consumers, back end (the internal work of the company to satisfy the needs of consumers) that includes quality control, to ensure that there are no unresolved problems, in the final products; supply chain (interaction with suppliers and infrastructure). All this can be integrated through the ERP, although some systems have spaces of less comprehensibility and effectiveness. Without an ERP that integrates all this, it can be complicated for manufacturing management.
Disadvantages
Many of the problems companies have with ERP are due to inadequate investment in continuing education of relevant personnel, including implementation and testing changes, and a lack of corporate policies that affect how ERP data is obtained. and how they are kept up to date.
ERP limitations and obstacles include:
- Success depends on the skills and experience of the workforce, including education and how to make the system work properly. Many companies reduce costs by reducing workouts. Small business owners are less trained, which means ERP system management is operated by personnel who are not trained in ERP management. Personnel change, companies may employ administrators who are not trained in system management. ERP of the employing company, proposing changes in business practices that are not synchronized with the system. The installation of the ERP system is very expensive. ERP vendors can charge sums of money for the renewal of their annual licenses, which are not it is related to the size of the company's ERP or earnings.Technical support personnel sometimes answer inappropriate calls from the corporate structure. ERPs are seen as very rigid systems, and difficult to adapt to the specific flow of workers and the business process of some companies, this point is cited as one of the main causes of failure. Systems can be difficult to use. Systems can experience “bottleneck” problems: inefficiency in one department or one employee can affect other participants. Integrated links need accuracy in other applications to work effectively. A company can achieve minimum standards, and after a while "dirty data" (inaccurate or unverified data) will reduce the reliability of some applications. Once the system is established,the costs of the changes are very high (reducing flexibility and control strategies). The bad image of the company's union can cause problems in its accounting, the morale of its employees and the lines of responsibility. The resistance in sharing the Internal information between departments may reduce the efficiency of the software. There are frequent compatibility problems with some of the partners' legal systems. The systems may be overly engineered with respect to the real needs of the consumer.Resistance in sharing internal information between departments can reduce the efficiency of the software. There are frequent compatibility problems with some of the partners' legal systems. The systems may be overly engineered with respect to the real needs of the consumer.Resistance in sharing internal information between departments can reduce the efficiency of the software. There are frequent compatibility problems with some of the partners' legal systems. The systems may be overly engineered with respect to the real needs of the consumer.
But definitely not everything that surrounds an ERP is good, they also have their disadvantages:
- They are very expensive. It requires changes in the company and processes for its installation. They are complex and many companies cannot adjust to them. There are few experts in ERPs.
Example. Implementation of an ERP in the Cisco company
Cisco Systems Inc. is a company founded by two Systems Engineers from Stanford University in 1984 and released to the world in 1990 and which has been in charge of dominating and exploiting the data network market. Currently he is mainly engaged in the manufacture, sale, maintenance and consulting of a wide range of telecommunications equipment and has established himself as the world leader in Internet infrastructure and solutions.
The first product of Cisco were the Routers, a team that allowed to control the flow of data packets through the complex topologies of the networks using the TCP / IP protocol, which allowed the existence of both the Internet and corporate networks or Intranets.. With the rapid growth of the Internet due to its popularity, Cisco managed to establish itself as the leader and dominate the market with its products. This allowed it to go from a market capitalization of $ 100 billion in 1998 to $ 531 billion in 2000.
Cisco started in the market giving a fight on three different fronts with its products: Telephone networks for voice transmission, local area networks for data transmission and broadcast networks for video transmission. Cisco's idea is that digitization would allow the transmission of audio, video, and data over a single network known as the Internet, making the process much more efficient and cheaper. This is the basis for the company's vision, which can be summarized in the words of its CEO: “Information at your finger tips, with a computer in every desk and in every home”.
The Internet is a network founded on open standards, I create it a new battlefront for the business vertical to which Cisco belongs, where large regular telecommunications companies like AT&T, Verizon, British Telecom and Deutsche Telecom compete. This new data transmission business has allowed the emergence of new companies that are dedicated to offering services such as Internet access, hosting, email, and information search services. All of these activities further accelerated IP networks, making data traffic far exceed voice traffic by 2000. As Cisco being the main provider, it was estimated that 70% of this data traveled supported by Cisco company products.
In 1988 John Morgridge was hired as CEO of the company due to his experience in the computer industry. He immediately started building a professional management team immediately. Morgridge implemented a system based on the idea of general centralized control and three decentralized branches in the Research and Development area, one for each line of business: Small, Medium Businesses, and Service Providers.
In 1991 Morgridge hired John Chambers, who assumed the role of CEO in 1995. In 1993, Morgridge and Chambers, along with Ed Kozel who was the CTO at the time, generated a strategy plan consisting of 6 elements, which are explained to continuation.
Have a broad product line for business networks
Cisco wanted to have a fairly broad line of products that would allow it to serve as a single point of sale for all business networks, allowing the company to handle data traffic from the main office to each of the company's terminals. This strategy is finally shown in the offer of products today that satisfy all the needs of a client. Over time, Cisco consolidated both in the field of large service providers and business environments and small niches with specific requirements such as small businesses or end consumers.
Systematic acquisition as an effective business process
Cisco had in mind the acquisition of several companies and the realization of important strategic alliances in order to complete its product lines. Each of these processes had to be systematized to reduce time and costs to increase the company's competitive advantage. Currently, the “Merge and Acquisitions” process has become an internal innovation. Innovation capacity is the sure framework for the success and sustainability of the company, something that Cisco has managed to maintain with the integration of new, small and medium-sized companies that have innovative ideas but not necessarily the resources, means or knowledge to implement these ideas.
Industry-wide software standard setting
Cisco implemented a network operating system known as IOS (Internetwork Operating System), which was licensed to companies such as Alcatel, Ericcson, Northen Telecom, Compaq, Hewlett-Packard, Bay Networks, 3Com, Microsoft, Intel and 12 other Japanese companies. Today Cisco managed to make every home on the planet, as its CEO said some time ago, have the equipment to connect to any network based on the IP protocol.
Choosing the right strategic partner
Cisco was committed to making strategic alliances with the most appropriate companies in the industry. As an example we have the work done with Microsoft in the creation of a network security standard or with HP for the development and sale of internet-based corporate computing systems. Currently, Cisco has three foci for choosing allies, with some also ending in acquisitions or purchases of the company by Cisco: Market acceleration, market expansion and entry to new markets.
Implementation of an ERP (need to implement a new information system)
In 1993 Pete Solvik joined the organization as CIO. At this time the company was supported on UNIX systems that allowed it to manage all its transactional processes through a wide range of packages, one for each area such as finance, human resources, sales, etc. Solvik's experience and together with the growth of the company managed to determine the need for an urgent change in all information systems. It was known that the current systems would not cope with the new needs and would begin to bring problems to the daily development of the company.
Some analyzes carried out showed that there were several delays in the business processes due to the synchronization process of the information that had to be done in each of the steps. This was reflected in unnecessary waste of resources and employee time and even some processes such as research and development had to iterate between 5 and 6 cycles. As we will show, with an ERP this was reduced to 2.5 cycles. Finally, in February 1994, the problems in the infrastructure began to materialize with a damage to the database of the main application. This damage led to the company being without systems for two days, generating millionaire losses. Time was up and the entire IT team agreed on the need for a change soon.
Selection process of the ERP to implement
From the beginning, the importance of time was taken into account since the situation did not allow phased implementation and a plan for a total change was necessary. At this time, the process of selecting the ERP system to be implemented in the company was entered. Given the company's strategy of choosing the right strategic alliance, KPMG was held with its extensive technical skills and business knowledge. Together with KPMG, the task of specifying the needs of Cisco regarding the software (RFP - Request For Proposals) that would be delivered to all vendors in order for each to show their best option was established.
Upon completion of this process, each vendor was given two weeks to submit their proposal, while Cisco continued the investigation of each of the vendor companies. Finally, each company was given an example data set and a space of three days so that they could present how their solution fulfilled, or not, the specified requirements. Finally Orcale was chosen as the winning company. In addition to the features of the solution presented, Cisco largely shared with Oracle its vision, as well as having the economic and business capacity to be on par with Cisco. This process took a total of 75 days.
The deal between Orcale and Cisco was finally agreed for a value of 15 million dollars. The team prepared the presentation of the project to CEO Morgridge. It was a considerable value for any project, so it was important to show not only the needs of a migration to new systems but also the generation of value that this would give to business processes and how it was aligned with the company's strategic plan. During this meeting with CEO new problems with the systems were presented, almost preventing the information from being displayed, which accelerated its approval and prioritization.
ERP implementation by Oracle
For the implementation of the ERP, a technique known as "Rapid Iterative Prototyping" was used, with which there were phases called "Conference Room pilots" or CRP. Each of these built on the previous ones and sought a better understanding of the software and its functionality for the business environment. Below is the result of each CRP.
CRP-0
In the first CRP, the work team and technical environment were implemented in Oracle applications. Each group received training classes of 16 hours a day for 5 days. After the training, each group was in charge of configuring each of the thousands of application parameters. At the end of the week and CRP-0, the software's ability to process Cisco orders through all of the company's business processes (Quote-to-Cash) was demonstrated.
CRP-1
Once CRP-0 was completed, the task of operating the system in each of the company's areas was passed. Scripts were generated of the respective documentation of the process that was taking place, including the problems found. These were discussed in 3-hour weekly meetings, where the leaders of each group found each other's solutions. Additionally, there was an arduous modeling process, since many business processes were not supported by the application and had to be implemented. An implementation team was in charge of filling each of the ERP gaps.
CRP-2 AND CRP-3
During the next two cycles the most difficult implementation process was entered with the inclusion of the additional sales package that had to be tailored to comply with the Cisco process, which was not originally supported by Oracle software. There were also some technical problems with communications, going from a point-to-point model that was originally available to a model where all information passed through a data wharehouse, which additionally offered advantages to information collection for Cisco.
At the end of CRP.2, a phase of testing the systems, both hardware and software, was determined, determining that the load capacity and transaction volumes generated by Cisco were properly supported and that the system also supported the growth expected and had generated Originally the need for change in information systems. CRP-3 was finally dedicated to the generation of total tests of the system and the preparation of its commissioning.
Starting the system
One of the great achievements for Oracle was the start-up of the operation of the system, however there were major problems at the beginning. Users had to adapt to a system that had serious stability problems, suffering falls almost daily. The main problem was found in the dimensioning of the hardware, where equipment changes had to be made at the points where the needs were not met. The advantage at this point was the contract with the hardware vendor, since this was made for a promise of operation and not in a given specification, so it was he who had to replace the equipment without increasing the cost.
The second problem encountered was the deficiency in the software's ability to handle the generated transaction load. The problem was attributed to the fact that the tests carried out previously did not have volumes of information similar to that handled by Cisco in its business. Over the next 60 days, a specialized team was in charge of finding solutions for both software and hardware, finally achieving stabilization of the entire ERP system.
Results
It was possible to show how the Cisco company, after carrying out an analysis and having the experience of its CIO and its CIO, came to the conclusion of the need for the implementation of new information systems that would support all the company's business processes.. A great growth was foreseen within its strategic plan, as would be the case with the addition of new products in order to offer a solution to all the customer's network needs. This growth was not being supported by current systems, which did not have complete coordination or integration, which even led to a waste of man hours and large amounts of money in carrying out processes that were not optimized.
The implementation of an ERP in a company as large as these carries great risks and many technical and business complications. It is important that the process is directly supported by the entire company in order to complete it satisfactorily.
Among the advantages of an ERP we find the centralization of information. It is very important that the entire organization or company function as a single unit and not as several dependencies that seem even different companies. With centralization, it is possible to carry out analyzes of the state of all business processes, allowing them to be optimized by finding their defects. By having a single source of information, it is also possible to improve the user experience, since the company responds as a unit to all its requests or nonconformities, being able to find the source of the problem if it occurs. Additionally, when sufficient information is available, it is possible to anticipate situations.
Cisco, with the implementation of this ERP, managed to enter new businesses and radically change the business model. A clear example is in the new way of providing customer support, with interactive websites where each customer can find all the information necessary to solve their problems. This would not have been possible without a centralized system such as ERP.
The reduction of costs and times is what ultimately gives more value to the value chain and its business processes, always keeping them aligned as the company's strategy. With an ERP it is possible to reduce costs by eliminating the iterative and repetitive processes that had to be done previously to manage the information of each of the systems separately.
Discussion
In conclusion, the primary objective of an ERP is to provide timely, accurate and reliable information that can be used for strategic planning. There are several ERP in the market, however not all are adapted to the needs of the company, so it will be necessary to have a broad knowledge of it to determine which ERP is right for you.
Currently, information technologies play an important role in business strategies, since they are changing the way companies carry out their processes. Information systems allow companies to achieve competitive advantages in different ways: coordinating value activities in locations that are located in a wide geography, or also by creating new interrelationships between businesses, expanding the reach of industries.
It also helps companies to support their competitive strategies, either to stay one step ahead of the competition or reduce the advantages that it may present.
ERP is a comprehensive business management system that is designed to model and automate the majority of processes in the company (finance, commercial, logistics, production, etc.). Its mission is to facilitate the planning of all the resources of the company.
Like any system, it has its advantages and disadvantages, of the most common and important benefits we can mention:
- Just one system to handle many of your business processes Integration between application functions Reduces management costs Increases return on investment Open Source Infrastructure
Of the disadvantages we can mention:
- They are very expensive. It requires changes in the company and processes for its installation. They are complex and many companies cannot adjust to them. There are few experts in ERPs.
Before implementing an ERP, it is important for the company to consider the benefits it desires for its organization and based on this search for the best solution on the market.
References
- Fernando Madrigal Hernández. Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM), Campus Monterrey. http://www.monografias.com/trabajos29/beneficios-erp/beneficios-erp.shtmlGuillermo A. Cuellar. http://fccea.unicauca.edu.co/old/erp.htm.Article people and companies. http://www.aqa.org.ar/iyq356/GenteyEmpresas356.pdf Wikipedia article.
