If you are an entrepreneur or have a company, it is likely that you have already heard about ERP, or enterprise resource planning, especially if you are proactive in the search for the growth of your business, as in recent years its use has become widespread in the sector. . ERPs are business management softwarethat is, a program that operates automating your business processes. Currently, ERPs have evolved to the point that they integrate most of the administrative and operational processes of a company, therefore, it is much more than automating the creation of excel spreadsheets.
Although in recent years the use of ERPs has been maximized as agency programs, is a technology that has been around since the 1960s, although perhaps that’s not quite right. In 1960 business software was born with an accounting and financial approach with MRP, material requirements planning. As you can imagine, they were on mainframe computers, accessible only to a few and with very limited features. However, and despite the limitations of the software due to the technology of the time, these revolutionized the way of managing the accounting and finances of large companies, allowing them to continue to invest in the area.
In the 1980s, an integrated system was developed, converging finance and accounting, now with sales, purchases and inventory, giving more complete control of the company’s processes. Only at the end of the following decade, in the 1990s, was created what we know today as ERP, born from MRP, carrying out all its operations, also integrating areas such as human resources, inventory, data analysis and the consumer.
In the last two decades, with the vertiginous advancement of technology, options such as ERPs in the cloud have emerged, which have democratized access to these software for small and medium-sized companies. Now without the need to buy the hardware and pay for its installation and maintenance in the company, the savings in the cost of the software made it accessible to many more entrepreneurs.
Benefits of an ERP
ERPs are often associated with large companies, but the reality is that, just like digital marketing, it is no longer a luxury and has become a necessity. The areas of integration that can be automated with management software are such that reducing hours, labor and even staff that you can afford makes it one of the best investments. Among the main benefits are:
- Increased productivity: Automating administrative processes saves valuable working hours.
- accurate reports: Evaluate your performance, your conversion rate, the effectiveness of your processes and your performance to plan strategies.
- Avoid human errors: Whether in accounting, contact with suppliers, planning and market analysis, the use of software significantly reduces risks and errors.
- Access to information: ERP facilitates the flow of information by organizing and synchronizing data. This avoids, for example, out-of-stocks or excesses, avoiding costs and improving the end-user experience.
How to choose an ERP
There are many ERPs on the market today, so it can be confusing to choose one. However, the first thing you should do is base yourself on your needs. ERPs are made up of modules, these modules correspond to business areas, such as administration or human resources, so it is essential that the modules meet their requirements. In addition, it is essential to decide the type of ERP, in the cloud, on-prime and hybrid, the cloud is generally recommended, due to the ease of installation, maintenance or costs, but each one must assess which modality is most suitable for them.