5 Benefits for Companies Using an ERP System

Most business owners have probably heard the term ERP system. But maybe many people don't know about the benefits of running an ERP system. With the current boom in cloud computing technology, the use of ERP systems is also increasing. Because it only requires an internet network to access applications or programs that use cloud technology.

Currently, ERP systems are widely used by companies in Indonesia to help develop their businesses. This system is used for many things, such as running the production process, helping control sales, managing finances and monitoring employee performance.

So what are the benefits that companies get if they use an ERP system? Before discussing this, you must first know what the meaning and purpose are. Check out the following explanation.

Benefits of Using ERP

As with most other systems, the advantages and disadvantages of an ERP system are a package that cannot be separated. The disadvantages of ERP systems are that they are expensive and adaptation takes a long time. Meanwhile, there are quite a lot of advantages or benefits for companies that use this system, namely:

1. Have Better Information System Planning and Management

By using an ERP system, the company will have better information system planning and management. ERP can help in managing resources such as people, materials and machines to work more precisely and optimally. Apart from that, ERP can provide accurate reports to management as a basis for making decisions.

2. Can increase efficiency and productivity

Apart from providing better information system planning and management, ERP systems can also increase efficiency in routine company operational activities. These activities include ordering, shipping, supplier performance, warehouse management, quality management, cash management, and sales realization.

Using ERP will shorten the cycle time from sales to cash and payments to suppliers. That way, company productivity will automatically increase. In the industrial world, efficiency and productivity are important, therefore this system is part of the industrial revolution 4.0 which must be implemented by manufacturing companies and the like.

3. Better Business Integration and Data Accuracy

Another advantage of using an ERP system is that companies can find out about changes to each module and submodule because updates in the program are real time. Apart from that, the program can also minimize duplicate or theft of data which is usually caused by user error. With ERP, business integration will run better and the accuracy of data in company reports can be accounted for.

4. Improving Collaboration

When running a system, it is usually inseparable from human error and differences in employee character which can cause conflict at work. However, by using an ERP system, collaboration will be more perfect so that disputes that may occur between divisions can be minimized. With detailed and real time reports, errors in data input can be seen clearly so that you can immediately find solutions to problems that arise.

This is of course very beneficial for the company because it does not have to spend a lot of time looking for errors and resolving conflicts that occur. Management can focus more on developing the business.

5. Form a Better SOP

By using an ERP system, existing work will become more structured so that Standard Operating Procedures (SOP) related to that work can be made better. Good SOPs will make employees work more optimally because they know the exact steps and details in their work.

If you have good SOPs, management can measure the value of Key Performance Indicators (KPI) of employees. So that management can evaluate employee performance whether it is in accordance with company expectations. From the KPI and evaluation results, it is recommended that management provide rewards for employees who excel.

Those are the 5 benefits that can be obtained from using an ERP system in a company. Judging from its objectives and benefits, it can be concluded that an ERP system is very important to be implemented by product or service companies and offline and online businesses. So for those of you who are business owners, recommend implementing an ERP system in your business.

Even though identical ERP systems are used by large companies, there are several applications that are part of ERP at very affordable prices, namely PipeSys.

PipeSys is very practical and easy to use even for people who don't have an accounting background. PipeSys has helped many business owners tidy up their business books so that these business people can focus more on developing their business.

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