What is ERP and what is it for?

What is ERP?

When defining what ERP is and what it is for, we must first refer to its English acronym. ERP stands for Enterprise Resource Planning. This means that it is an IT tool with which it is possible to handle and manage each of a company's resources from a central device.

Therefore, we can say that it is a type of software with which it is possible to centralise all the operations of a production plant in particular and of a company in general.

In this way, when defining what ERP is and what it is used for, we could also say that it is the system that is capable of receiving all the information, organising it and systematising it in order to make it available.

What is ERP for?

This is where we will answer the second part of our question. It is a question about the functions of ERP, which are largely determined precisely by its characteristics and by the very definition we have given of it.

1 .- For automating tasks

As we have said, ERP is a tool that is used to gather information from all areas of a production plant or business in general. This means that once this information is collected and centralised in a device, it can be used to generate automatic responses to certain operations.

In other words, first of all, ERP is a tool used to take this information and automatically perform actions accordingly. In this way, we can save a lot of time and devote it to other activities that require a higher human factor load.

2 .- To obtain a more accurate vision of the company

ERP is a tool that works in conjunction with each of the departments of a company. From marketing to sales, production or customer service, all departments of a business can be centralised thanks to software of this kind.

In this way, it is possible to obtain a much more realistic picture of the state of the company, with all its components represented.

That means we will have more and better information about our business. This is largely possible because it works in coordination with new technologies such as The Internet of Things. A technology by which it is possible to interconnect each device, machine or department to the central part of ERP.

3 .- To articulate the digitalisation of a company

Another of the basic functions of ERP is to make the digitisation of a company possible. It has been clear to everyone that we are in a new era where digitisation is no longer an option, but a necessity for a company to survive.

In this way, ERP is a technology necessary to implement digitisation in a company. For this reason, ERP is said to be the basic tool for implementing the concept of Intelligent Factory in a production centre. It does this by not only collecting all the data from each department, but at the same time linking them together.

In this way, we can obtain details and reports on the whole activity in real time. This point is essential, for example, to schedule orders to suppliers, to control stock in real time or to directly manage customer orders or customer service requests.

4 .- Avoid duplication

Another of the essential advantages and another of the points to understand what ERP is and what it is for is data processing. At the same time as in the Internet of Things, ERP is based on other complementary solutions such as Big Data. Naturally, one of the most important aspects of digitisation today is the data use and data processing.

ERP is also a technology that enable us to manage, organise and leverage our data more effectively. The reason is that it is a solution that analyses and sifts data, helping us to avoid data duplication.

5 .- To make better decisions

In the light of what we have mentioned so far, it is easy to guess why ERP is said to be a tool that helps us to improve the quality of our decisions. The reason why is that it gives us a much broader and clearer vision of information.

It is precisely by having more cohesive and higher quality information that better decisions can be made in a business that uses ERP. It provides us with an information base with which we can better anticipate the future and make our entire management process more efficient.

6 .- Saving on costs

After all, better control over our own company's resources also translates into significant savings in operating costs. For example, ERP can help us save costs by telling us which departments are inefficient, which processes can be improved, or simply by helping us save time and costs by automating tasks.

Needless to say, it saves money to make good decisions thanks to the information it makes available to us.

7.- Improving the quality of customer care

One of the highlights of ERP technology is that it allows us to improve the quality of our service and customer care. All the benefits and functions we have talked about so far are translated into a better service for our customers. In turn, it brings other complementary benefits, such as loyalty.

We hope this article has helped you to understand how far-reaching a technology such as ERP is in today's world. Try all its possibilities for yourself with SEIDOR.