What is ERP

The desire to efficiently use resources drives managers to look for proven and productive solutions for work planning. One of the ways to improve the company's operations is to implement ERP systems. Together, we will explore their impact on business and find out whether it is appropriate to use one of them for you.

ERP concept definition

First, let's look at the terminology. An ERP system is software that implements the management function of an organization. To deepen the meaning of this concept, we need to decipher the abbreviation itself - Enterprise Resource Planning. It follows that ERP is an enterprise resource planning system. 

The main function of an ERP system is to combine business processes into one interconnected structure. This helps to simplify, speed up and optimize the work of all departments quite effectively. The technology of implementing a unified database eliminates the need to enter information manually several times, reducing the number of errors.

The methods of a modern ERP system (analysis, data collection, and processing) have been improved by using artificial intelligence and access to the Internet of Things.

Spheres of ERP systems use

What does the system manage? It takes over the management of such areas as:

• finance;
• personnel
• procurement;
• sales and marketing;
• supply chain;

own activities (production or provision of services).

Not only logistics, trading, and manufacturing companies know what ERP is. Such information technologies are being implemented by companies that need to process large amounts of data on a regular basis and provide services promptly:

• carriers
• banking institutions;
• mobile network operators;
• media holdings.

At the initial stages of business development, this tool is often not required - the process of establishing activities between departments is mostly manual. For large-scale organizations, ERP implementation is an essential service.

ERP benefits

By creating a single information space, the enterprise resource planning system provides opportunities to manage all important communication nodes between employees and managers, as well as between all departments. The benefits of ERP implementation include the following.

Financial management

The system allows you to effectively track financial transactions, including accounting for expenses, income, and taxes. By implementing an ERP system, you can automate accounting processes, reduce the likelihood of errors, and improve the accuracy of financial reporting. Thus, the manager will have information about the current financial condition of the company. This will allow them to make sound decisions about investments, budgeting, and strategic planning.

Production management

The ERP system also effectively optimizes various work processes. It not only takes into account product demand, but also automates production cycle planning, labor management, and resource utilization control. As a result, the company can produce at lower costs, with high product quality and a high speed of response to changes in market demand.

Tracking deliveries

The system automates the ordering of materials, takes into account delivery times, and facilitates efficient inventory management. This not only helps to avoid production downtime, but also reduces the risks associated with inefficient product management. Thanks to this, there is no shortage or surplus in the warehouses.

HR solutions

In the field of HR, ERP technology covers personal data management, effective time tracking, payroll automation, and other aspects of human resource management. Optimizing staff performance increases productivity and improves communication within the organization.

Analytics

An ERP system is software that collects and processes data for analysis to make informed decisions. Analytical tools help to track key performance indicators, identify trends, and develop strategies to improve enterprise performance.

ERP systems in Ukraine

 In Ukraine, ERP systems were not actively developed until recently. Previously, much of the software used by Ukrainian companies was created abroad. However, the modern domestic IT market is actively replenished with new universal information technologies that are adapted to Ukrainian realities. Software developers also offer services to create ERP systems specifically tailored to the needs of a particular organization.

Choosing a resource planning system or developing a custom one

In order to understand whether to use an off-the-shelf system or develop an ERP for your own use, you need to know the advantages and disadvantages of each option.

A ready-made solution can be valuable:

1. Speed of implementation. Such software has already been developed and tested, so it can be used quickly.
2. Standard functions. A set of typical functions of an existing ERP for resource management may be sufficient for a particular organization.
3. Support and updates. Reputable developers often release new versions of the software to fix bugs.
4. The advantages of the development will be:
5. Meeting individual needs. The service of taking into account enterprise specifications can be critical for some industries.
6. Full control. The company can modify the system in accordance with changes in production processes.
7. Greater flexibility. Management can choose the technologies and system architectures that suit the business best.

The decision to implement an existing solution or to develop your own should be a deliberate one, taking into account the specific needs and capabilities of the company.