What is ERP: Definition, types, advantages and disadvantages

An ERP program or software is a program or set of programs that handles the most important internal operations of a company. Find out more in the following article.

In this article we explain the definition of ERP, its importance in companies and its main advantages and disadvantages.

What is an ERP?

ERP stands for Enterprise Resource Planning. That said, an ERP software is a software or set of them that take care of the most important internal operations of a company, such as operations related to expenses, sales, customers or inventories.

ERP softwares usually offer integrated solutions by modules or functionalities that allow centralizing all the company’s information in a single and secure database. For example, these are some modules that an ERP could include:what is erp

Initially, adopting ERP software was a large investment in time and money that only large companies could afford, but it improved productivity by up to 50%.

Thanks to new technologies, solutions have been created in the cloud that have allowed lower costs, any company can enjoy an ERP software or management software for SMEs to improve their productivity.

Advantages of an ERP system

An ERP mainly offers the following advantages:

  • Centralized and traceable information: It allows the company not to suffer important information losses.
  • Integral centralized management: Any member can use the same ERP for their daily management.
  • Automation of repetitive tasks and processes.

As a sum of all the above, we will obtain the main advantage which is the saving of time, costs and productivity increase.

In addition, it also allows managers to make better decisions by having all the information centralized with transparent reports on any area of your company.

Disadvantages of ERP software

ERP systems have two main problems and disadvantages. The first one is the price, since if a company needs its software to be adaptable to 100% of its needs, it will have a higher cost.

Fortunately, ERP software is designed so that any company can use it without leaving behind any important function, so the percentage of companies that need a custom-made ERP software is decreasing and almost non-existent.

The second disadvantage of ERP is its implementation, which will take more or less time depending on the adaptation of employees to abandon their previous management system (paper, excel, word…) and take all the information to the ERP in its mobile or computer version.

While it is true that today, the price of ERP software is affordable for most companies because it has been greatly reduced over the last 20 years. The biggest problem is in the implementation, which can lead to loss of information or delays in the operation of the company. To counteract this, ERPs usually offer help to companies to facilitate the use of ERP in the shortest possible time.

Types of companies that need an ERP

A software that optimizes all of a company’s resources is necessary whatever the size and role of the company. As for any freelancer, the ability to adopt the functionality required for your internal operations gives greater flexibility when implementing ERP, so if you’re reading this, an ERP is likely to boost your company’s productivity along with the other advantages we’ve discussed above.

You can start testing STEL Order as ERP for your company for 30 days here:

[button background-color=#fd6c00 color=white type=”big” class=”get-started botonCrear”]FREE Trial[/button]

Alberto Abad

CFO. Ingeniero de telecomunicaciones al que le encanta la contabilidad y fiscalidad. Lidera el desarrollo del programa de facturación líder que hace la vida más fácil a miles de autónomos y pymes.

Linkedin profile

Last articles

How to create a client information sheet

Every company owes its customers, so being in possession of as much customer information as possible by companies is a mandatory task if it wants to take advantage of one of the greatest competitive advantages a company can have is its own customer base.

How to attract more customers in 2020?

The best tips to increase your sales in digital media by Bernardo Salazar, guest author who gives us digital marketing tips to apply in your company. Generate active communication with your customers and attract more sales this 2020.

Distribute in Spain

We analyze the main characteristics of the distribution sector in the world, Europe and, mainly, for distribution in Spain. We tell you which items European and Spanish consumers have invested the most in. With the TOP ranking you know which companies are protagonists.

What is market research and how to conduct it?

In this article we explain how to do a step-by-step market research and how it will help you to grow your business.

This site is registered on wpml.org as a development site.