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What is an ERP?

  • 19-05-2021 9:27 AM
Larissa Kampert
Written by
Larissa Kampert

The abbreviation ERP stands for Enterprise Resource Planning, and is a system that automates and connects business processes within your organization. A synonym for an ERP system is also known as a software package. In short, this is the definition of an ERP and what an ERP does, but of course we can tell you a lot more about it. For example, what are the pros and cons? And what exactly does an ERP do? We have listed all these questions for you, and more.

What does an ERP do?
An ERP system is a tool that collects all data from different departments within the organization and stores it in one central database. This way, all information is transparent for every employee. An ERP ensures that productivity within an organization is raised to a higher level. An ERP system is also referred to as an information and management system. Many processes can be easily automated in this system.

An ERP ensures that you can meet customer requirements as much as possible. The current data about, for example, production, logistics and administration are linked, so that processes can be controlled automatically. So you can understand that your processes run more efficiently with an ERP system. As a company you get a better insight into applications and reports are created more easily. This way you can further inspect processes in the future and keep building from there.

Benefits of ERP
The biggest advantage, of course, is that it delivers more effective business operations. This of course saves you a lot of time, which also saves you money. But of course there are even more advantages to mention:

  • You prevent overlapping or inconsistent data. Companies without ERP usually use separate information systems. The consequence of this is that all information is stored on different databases, which means that data is not always correct. 
  • Because all information is collected in one ERP system, employees have access to all information relevant to them. It’s easy for yourself and for the entire organization!
  • Finally, an ERP system is suitable for large, but certainly also for smaller companies. An ERP can be hosted outside the organization. This of course saves you costs, making an ERP more accessible for the small players among us.  

Disadvantages ERP
Of course we also have to mention a few disadvantages of an ERP system.

  • The costs of a package can be very high. For example, if a company has specific business processes that fall outside of standard functionalities, this must all be tailored. Systems have become more flexible, so that you can set up many things yourself. Think of extra functionalities, new fields or workflows.
  • Another disadvantage may be that the implementation of an ERP system has a major impact on the organization. An ERP implementation is complex and as a customer you naturally prefer to see this happen as quickly as possible. However, good preparation for the arrival of a new system is required. This is important for management, and certainly for your employees who will eventually work with it. This way, no one will be faced with surprises and they know where they stand. Planning is key!

There are many different ERP systems available per industry. So look carefully in advance at the requirements you set for an ERP and which functionalities you need in such a system. Only then you should start looking for the different suppliers. Due to its modular structure as an ERP, the OTYS system can also be used for multiple branches, such as recruitment and selection agencies or secondments. Click here for more information about the OTYS system and the application for different target groups. Do you have a question or would you like more information? Please do not hesitate to contact us.

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