There is no question that shifting to a new system or platform managing data can seem like a big challenge and a cost in itself. The same can make it hard to see the benefit side of a plus/minus review right up front. However, when one looks at the following benefits further out, the calculations can change dramatically for a business. And with the cost of ERPs coming down, small and medium size businesses can get into the act as well now.
Profitability Boost Within 24 Months
The accounting picture improves dramatically with ERP. Once a business can see all aspects of the financial transactions, issues where there are expense-bleeding and inefficiency become apparent. Costs can be trimmed systemically versus just dealing with symptoms and not understanding what the connected reactions will be. That means management can translate the orders taken, how they translate to the actual dollars with change identified, and then how those same orders are fulfilled financially with cost of goods sold. The net profit picture begins to make a whole lot more sense with ERP-connected reporting. And even the more obscure indirect costs can be tied better to actual activity.
Faster Time to Decision Flow
When management can utilize a dashboard approach to what’s going on with financial data, operational data, and infrastructure, they can make far better decisions on the fly. One of the biggest problems with decision-making is the guesswork with either what the market will do next or how the business will be impacted. While ERP can’t guess the external future it can definitely give management the tools to see and model how changes would affect business processes positively and negatively. That produces better decision-making.
Key Business Processes Move Faster in their cycles
Your critical processes function with less interruption and more protection with an ERP system. Employees can be segmented to their areas, so the risk of mistakes or intentional sabotage of data can be contained and minimized. Because data is across a network, backup and redundancies are far stronger and can be saved en masse versus unique and custom approaches for every office. Permissions can be controlled in a modular fashion, changing and moving along as people resources are moved as well. All of these protection contribute to maintaining smoother businesses processes and ongoing flow.
Improved Completion Rates
With ERP It’s a proven fact where processes are monitored, they perform better and have a higher success rate. This goes for both people processes as well as automated systems. ERP allows management to see across the system and the big picture, as well as apply the necessary monitoring that would otherwise be supervisor-intensive. With metrics, ongoing tracking, and reporting, performance can be measured far more accurately, and completion rates can be hard to argue with when calculated in a known unitary value versus anecdotes.
Improved Schedule Compliance
With ERP When processes can be tracked step by step, variances can be spotted within activity versus having to wait for good or bad result. Too often management has had to reconstruct where a problem is in a business flow by how the end product or service is delivered. It’s not a very accurate way of diagnosing problems. Instead, with ERP, each phase of production can be measured with objective metrics, signaling far soon where compliance is lacking and a problem might exist. This is a critical protection for financial transactions.
Source: Aberdeen Group