Companies invest in new and upgraded business systems for many reasons ranging from the replacement of the old system because it’s no longer supported, or hasn’t kept up with changes in technology, or they can’t get good (or any) support… to the more substantive reasons like a desire to reduce costs and get leaner, or the fact that they are growing and need the business platform to get them there. But whatever a company’s reasons, a handful are fairly universal in terms of ROI and system benefits. Five benefits highlighted in an article by Eric Kimberling, an ERP consultant, gives us the basis for comments derived from 30 years of implementations ourselves.
- Increased revenues. Most folks look at ERP as a way to reduce costs, neglecting to realize that capabilities like CRM (Customer Relationship Management) and demand planning make it much easier to track and manage sales and marketing efforts and match capabilities to customer demand, thereby not only improving the bottom line but increasing the top line. The key is to identify inefficiencies and opportunities within them. The data inside your ERP will allow you.
- Decreased inventory cycle times. With all your data inside one repository, it becomes a lot easier to spot trends, identify overstocks, manage product flow, sell what you have and demand-plan for what you don’t. That doesn’t even begin to extol the virtues of improved inventory visibility overall, and how that can help reduce excess inventory and improve turns.
- More efficient business processes. This one’s part ERP, part people. But by combining both, you can identify process gaps, redundancies and workflow inefficiencies, and design better processes in their place, utilizing your system to manage and automate those improved workflows. An ERP implementation is the perfect time to improve your processes.
- Integrated business processes. Improved integration across customer service teams, inventory planners, production managers and accounting can all make it possible to have a unified view of the company reality across all users. You have to map your processes carefully and involve all the key players. But when you do, you have a more integrated, efficient and less redundant cycle of work flows and business processes that can be integrated neatly inside your software.
- Higher employee morale. Maybe the least measurable element, but important nonetheless. When you make someone’s job less frustrating, or allow them to do more, more sensibly, or sometimes, just make their job easier… it’s a morale booster. Making it easier to process an order or find the information you’re looking for quickly can make a big difference in a person’s working day. Don’t underestimate the value of an employee who just feels better, and more productive, about their job.
As always, the key is to define the process up front. Identify the gaps and weaknesses. Find the hidden silos of information not available to all. Look for redundancy (the double and triple data entry tasks). They’re all there, and they can all be remedied through an effective combination of people, process improvement and software. The benefits are very, very real – as anyone who’s gone through a successful implementation will tell you.