Companies are always trying to increase their efficiency, no matter whether they make products or offer services. Practices like lean manufacturing try to increase efficiency in how a company uses physical resources like supplies and labor. ERP systems try to increase efficiency by affecting the process the businesses uses, especially the technology it puts to use. This can be useful for some businesses, but constraining to others.
ERP stands for enterprise resource planning. These are computer applications that are designed to provide all necessary tasks for a business to complete transactions or make products, from start to finish. This system combine aspects, such as funds, employers, supplies, and communication, and it shares information with all employees as it is needed.
With a properly installed and run ERP computer system, a business can make training much easier for all employees. Only a single system needs to be mastered, and each employee then has all the skills necessary to complete multiple tasks. Also, ERP systems can save a business a lot of time, reduce errors, and open the ways a business can use data to analyze current conditions.
Implementing an ERP system in a new business can be very effective. Implementing the same system in an older business can be very difficult. All employees must be trained, and there will be significant down time as the business switches all applications over to the new system. Some businesses cannot afford the profit loss this downtime would require. ERP systems also tend to have industry standards for specific types of businesses, and the strict molds may lower creativity or competitive advantage.
ERP systems do not fit the business plans of every enterprise. Often, ERP systems must be customized to allow for specific tasks. Not all ERP systems allow this—depending on the system or company the business uses, it may be against policy to make such drastic changes to the application.
Support for ERP systems often can be difficult to depend on. Technical response can be adept at dealing with minor problems, but major complications with the ERP systems can be beyond the limited customer service available to businesses.