IT, Management

Advantages and Disadvantages of ERP for Your Business

ERP-systemAs your company grows in size, it will be necessary to continually update your organization methods and practices. There are several ways to update your existing system to make it more efficient, one of them being a transference to an ERP organization system. ERP, or Enterprise Resource Planning, is very popular among medium-sized businesses for integrating both internal and external resources. For those of you already using ERP, updating your system may be able to streamline any convoluted and antiquated connection systems that are now holding you up. There are several benefits to using ERP for medium-sized companies, though this might not be the best solution for all types and sizes of companies. What do you need to know about ERP before deciding to update your organization system?

Advantages

The benefits to incorporating ERP into your company are many and varied. ERP can help you organize all your data so that you have the right information at your fingertips in no time. If you already have an ERP system in place, updating it will allow you to streamline any updates or additional layers of information you have added so that you can optimize your system to be best for your current status.

ERP increases the transparency in your organization, helping you identify what areas of your company are having what effect on your profit margin and overall functioning. ERP helps you pinpoint exactly what areas need extra attention and which are superfluous. This may be one of the most influential benefits of updating an existing ERP system; it will give you the most up-to-date information possible to help you make informed decisions about your company.

If your company is managing several inputs and outputs of data regularly, having an ERP system can make a huge difference. Although installing an ERP can seem costly in the beginning, the Total Cost of Ownership (TCO) will almost definitely be reduced quickly over time as the ERP pays for itself in organization and increased profitability. It is an upfront cost, but one that will easily make up for itself.

ERP solutions are meant to be controlled by multiple parties simultaneously. Although having many hands in the pot at once is often associated with confusion and problems, ERP is actually made with this idea in mind. This allows for the system to be maintained in the long run, regardless of personnel changes or upheavals in your company, and lets you easily keep your system updated by your staff. Cut down on communication issues by taking advantage of an ERP. Even Microsoft recruiters look for ERP consultants to help clients better their organization system.

Disadvantages

Although ERP can be a great solution for most medium-sized companies, it may not be best for smaller companies with less organizational need, fewer staff, and smaller budgets. The start up costs of an ERP may take too long to be made up for in profit, and your smaller company may not need such a powerful organization tool for smaller transactions.

ERP is a tool like any other. Simply implementing an ERP system will not automatically solve your communication or organization goals without significant input from you and your company's management. If you want to make the most of ERP, be ready to dedicate some time and energy into its correct use so that you can really take advantage of all of its potential for your business.

Often times, a company could be much more successful were its practical elements are in better working order. Install an ERP system to make your medium-sized company be the best it can be!

A post by Kate Simmons (12 Posts)

Kate Simmons is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.
Kate Simmons is a freelance business writer and occasional blogger. If her article got you interested, feel free to follow or reach out to her via G+ or Twitter.

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