ERP systems are integrated information systems, acquired in the form of commercial software packages in order to support the majority of the operations of a company. Considering the value chain model, one can understand that the ERP system is proposed to cover the business activities ranging input logistics to those related to output logistics and part of the marketing and sales activities.
Integrated systems are systems capable of dealing with defragmented form a set of processes and are also the most solid basis for reengineering projects organizations.
In short, ERP is nothing more than a generic term that seeks to identify the set of activities performed by a modular software package and its main objective the assistance of the management processes of a company.
A number of benefits are achieved through the use of an ERP, but some good reasons end up being more than just sufficient for the implementation to be real. Consultants and scholars indicate three main reasons for a company to adopt an ERP system, they are:
To integrate financial data: As the ERP system consists of modules, each module, when required, generates different versions of the truth; then those versions are sent to the ERP system (central system of data processing), and this creates a single version of the truth. This version, in turn, cannot be challenged by any module, because it is an integrated system.
In order to standardize the manufacturing process: If a company with more than one unit makes use of methods and different softwares to perform the same task in each of the units, this entails an increase in production cost and an increase in execution time of tasks, creating a decrease in productivity of the company. The implementation of a single system in all units favors the flow of communication between the units, considerably improving the exposed above points.
To standardize human resource information: also for companies with more than one unit, with the standardization of the HR information, companies can gain a better understanding of which a particular employee service performs within the organization and thus creates greater control on payable benefits (for example, overtime).
The ERP software is a complex system because it involves many people, sophisticated technology and many activities. A number of advantages involves the implementation of such a system; however, it is also possible to observe the problems that occur with its implementation – for this reason, the implementation needs to be accompanied by trained professionals so that the initial impact is minimized.