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Most entrepreneurs have probably heard of the term ERP system before. But perhaps many do not know the advantages of an ERP system. With the current boom in cloud computing technology, the use of ERP systems is also increasing. Because it only needs an internet network to access any application or program that uses cloud technology.

The many advantages of the ERP system make this system very attractive for companies to create integrated work management and optimal results. At present, ERP systems are widely used by companies in Indonesia to support their business development. This system is used for many things, e.g. B. for running the production process, assisting in controlling sales, managing finances, and monitoring employee performance.

So what are the benefits for companies when they use an ERP system? Before talking about it, you must first know what it means and what its purpose is. Check out the explanation below.


Understand ERP

The ERP system is a concept for planning and managing corporate resources in the form of integrated program application packages and multi-modules. If the module is designed to serve and support different functions within the company it can be more efficient and provide the best service to consumers.

ERP itself is made up of 3 words, namely business (company or organization), resource (resources), and planning (planning). From this definition, it can be concluded that the ERP system focuses on planning aspects in a company or organization using resources from the company or organization. This system focuses on all departments being integrated so that collaboration at work can work well.

 

Purpose of the ERP system

The purpose of using an ERP system is to generate added value and maximum benefit for all interested parties of the company or organization. Of course, the implementation of ERP will facilitate the existing work and relieve the company management in setting strategic guidelines. Especially during the Covid-19 pandemic like today, many entrepreneurs have to fight harder to run their businesses. Sometimes not for profit, but how to survive in these difficult times.

 

Benefits of using ERP

As with most other systems, the pros and cons of an ERP system are an inseparable package. The disadvantages of ERP systems are that they are expensive and take a long time to adapt. While the advantages or advantages for companies using this system are quite large, namely:

 

  1. Better planning and management of information systems

By using an ERP system, companies have better planning and management of information systems. ERP can help to manage resources such as people, materials, and machines more precisely and optimally. In addition, ERP can provide management with accurate reports as a basis for decision-making.

 

  1. Can increase efficiency and productivity

In addition to providing better planning and management of information systems, ERP systems can also increase the efficiency of the company’s routine operational activities. These activities include ordering, delivery, supplier performance, inventory management, quality management, cash management, and sales realization.

Through the use of ERP, the throughput times from sales to payments to suppliers can be reduced. This automatically increases the productivity of the company. In the industrial world, efficiency and productivity are important, so this system is part of the industrial revolution 4.0 that has to be implemented by manufacturing companies and the like.

 

  1. Better business integration and data accuracy

Another advantage of using an ERP system is that companies can detect changes in each module and sub-module since updates in the program are in real-time. In addition, the program can also minimize duplicates or data theft that are usually caused by user error. With ERP, business integration runs better and the accuracy of data in company reports can be taken into account.

 

  1. Perfect cooperation

When operating the system, it is usually inseparable from human errors and differences in the character of employees, which can lead to conflicts at work. But by using an ERP system, cooperation becomes more perfect, so disputes that may arise between departments can be minimized. With detailed and real-time reports, data entry errors can be identified, allowing you to immediately find solutions to problems that arise.

This is certainly very beneficial for the company since it does not have to spend a lot of time looking for errors and resolving conflicts that arise. Management can focus more on business development.

 

  1. Formation of a better SOP

By using the ERP system, the existing work is better structured so that the Standard Operating Procedures (SOP) associated with the work can be improved. A good SOP ensures that employees work more optimally because they know exactly the steps and details of their work.

If you have a good SOP, management can measure the value of employees’ Key Performance Indicators (KPI). So that the management can assess the performance of the employees and whether it meets the expectations of the company. From the KPI and evaluation results, it is recommended that management reward outstanding employees.

 

These are the 5 advantages that can be achieved by using an ERP system in a company. From the goals and benefits, it can be concluded that the ERP system is very important to be implemented by product or service companies as well as offline and online companies. So for those of you who are business owners, I suggest implementing an ERP system for your business.

Although identical ERP systems are used by large companies, several applications are part of ERP at very affordable prices. One of these applications is the Harmony online accounting application, which uses cloud technology so your data is stored securely and business accounting can be done anywhere, anytime.

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