Advantages and Disadvantages of Using ERP Software

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Organization and planning optimization are the pillars of coordination between human resources and the requirements of a company’s operational departments. In the world of information and information sharing systems (with a cross-functional dimension), ERP software demonstrates its proven capabilities as a decision-making tool. It becomes an essential tool to drive the company forward: this integrated system offers users access to a single database and simplifies many aspects of day-to-day management.

ERP, otherwise known as enterprise resource planning, means resources are planned out ahead of time (before they are needed). The integration of this software brings a unique database to the whole company: the information is shared and updated in real time. The implementation of this IT tool results in the execution of several computer applications, also known as modules, which operate independently but rely on and share the same source of information. When experts speak of uniqueness, this software option tends to make all the difference!

Which ERP software should people choose? For starts, it is crucial to not confuse CAPM with ERP. CAPM stands for Computer Assisted Production Management. The goal of this software is governed by the strict management of production and its optimization: stocks, production lines, raw materials, costs, and so on. CAPM systems have been around for 60+ years. Like the CAPM, an ERP solution can be integrated to work with other systems. CRM, Customer Relationship Management, means that a business can better its marketing and sales using specific tools. This option is dedicated to salespeople and presents real interests when managing a large number of customers.

How does an ERP work? The principle of an ERP is to centralize the database of a company. That is to say, companies can enter or modify data in one module (sales, inventory, production, etc.) and, thus, impact every other module. The database is updated and applies any necessary changes to the entire business. For example, if a salesperson enters a sale on his or her terminal (which can be mobile), the ERP will immediately and automatically apply this sale to the inventory, sales journal, ledger (accounting) and account result. And all this is done in real time!