ERP, what is it? For its acronym in English, which represents the phrase Enterprise Resource Planning, or Enterprise Resource Planning, they are information management systems that allow the automation of many business practices that are associated with the operational or productive aspects of a company. It is a software architecture that integrates logistics, finance, manufacturing and human resources functions of a company so that all work flows better and is more efficient. Today, an ERP is essential in developing a business strategy.
Each ERP system is going to be unique for each company according to its resources, objectives, products and services they offer. However, they all share some characteristics, such as:
1. They can be integrated throughout the company. One of the aspects of an ERP is that it can be integrated with all the departments of the company, thus making a unified system and bringing different departments and business units closer together.
2. Real-time operations. Through these management systems it is possible to see each action occur in real time, which allows correcting any problem that arises immediately.
3. A single database in common. Another of the great advantages of implementing an ERP is that all the departments and business units of the company use a single database in common. This allows the data to be recorded only once and is accessible to all departments.
The existing classification for ERPs are according to the size and complexity of the companies they serve. In this sense, four levels have been determined:
1. Level 1 (Tier I)
These ERPs support large companies with a global reach and also manage many international affairs. Some of these are currencies, languages, different alphabets, postal codes, among others.
2. Level 2 (Tier II)
These ERPs help large companies to operate in different countries simultaneously, but they are not global in scope.
3. Level 3 (Tier III)
These ERPs offer support to medium-sized companies. They can manage multiple languages and currencies and specific business relationships.
4. Level 4 (Tier IV)
These are aimed at SMEs and micro-companies that need an accounting solution and are not really considered complete ERPs.
In addition, another classification measure can be used depending on the type of installation: cloud or local. ERPs can also be open source or proprietary.
Benefits of an ERP
Among the benefits that we can find from an ERP are:
1. Greater internal efficiency in terms of reducing the time it takes to invest in the business to complete all business processes.
2. Improved decision-making as shared data enables departments to analyze it better and faster.
3. More agility in all processes thanks to the standardization and simplification of structures.
4. Greater security in the databases since as there is a single centralized database, everything is more efficient and can be better controlled.
You may have heard about a CRM and its importance in a company, however, it has important differences regarding the purpose of its use with respect to an ERP.
A CRM (Customer Relationship Manager) mainly helps to manage clients, while, as we already explained above, an ERP helps to manage processes. For this reason, a CRM is essential for the sales, marketing and customer service process and ERP is essential for production.
In addition, a CRM will help increase the company's income, while an ERP helps with cost control. Additionally, implementing an ERP requires a more detailed installation and a greater effort than a CRM because it requires the change of important business processes.
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