10 signs you should invest in ERP solution
- May 21, 2014
- Posted by: cemblog
- Category: ERP implementation
Many organizations are under the assumption that only large and well established companies will be in need of an ERP solution. The fact is that, it is not the size of business which decides the need of an ERP, but processes and operations carried out in the business. Not all big companies run complicated processes and not all small and medium companies run simple processes.
As the complications in your business management increases, investing in an ERP will be a right choice. Investing in an ERP solution offers momentous opportunities for the business growth, allowing you to streamline the operations and reduce the operating cost of the business.
If you are confused when to invest in ERP, check for the situations below. If your organization suffers any of the following conditions, it indicates that it is time for you to invest in ERP.
1. Business is in the growth stage
Growing phase is the important period for any business. With the swelling number of processes and properties the management of resources and inventory will become tedious.
But this becomes easy with the right ERP solution in place. ERP solution assists you to place the right quantity of resources at the right place and at the right time.
2. Business involves numerous processes and multiple software programs
Analyze the number of software programs used for your processes. If your inventory management department uses one software for recording demand and supply, and sales department uses a different software for recording the customer need and deadline, there will be a time delay in the processes.
Investing in an ERP makes sure all your processes are running smoothly. The ERP solution integrates all the databases together and allows each responsible employee to access the information anytime. Thus, reliance on a single, accurate database will assist you in making better organizational decisions and shrink information jams.
3. Business information is not easily accessible
Information is the valuable source of making decision in any organization. The information should be available to the organization as a whole and not to the individuals alone. To find if you need an ERP, calculate the time in which you can get the information of your sales margin, demand, and other accounting details. If you are facing challenges to transfer a data, if some information is getting lost from time to time, it means you definitely need an ERP to have a smooth flow in your business.
4. Interrupted process flow in the organization
The process flow is the heart beat of any production company. When the process flow is disturbed, the production stops and the quantity of goods coming out will be reduced. Thus the demand cannot be met and you will give a chance for your competitor to rule the market. It is merely impossible to bring back the customers once lost.
Investing in an ERP will ensure the maintenance of the process flow in the organization. Thus, you will be in a position to maintain a balance between supply and demand.
5. Accounting and other process are becoming tedious and unmanageable
The accounting department will be the first department to insist you the importance and need of implementing an ERP solution. If your accounting staffs spend a lot of time in extracting reports on financial conditions and they rely on paper work for invoices and sales orders the operational cost of the organization will shoot up. The process of reconciling the financial information at any point of time will be a tedious job involving numerous employee personnel, a week or even months of effort, and countless spreadsheets.
Implementing an ERP will reduce the pressure and frustration on your manpower and they will be able to post information, rekey the figures and deliver even critical reports for organizational decision making without any time delay.
6. Multiple entries in the data system
When you maintain different software for the various processes of the organization, there is all possibility for the data to get duplicated once or twice. This led to confusions at the time of decision making. The time spent on making multiple entries and then removing duplicates is a loss for the organization.
ERP system provides a single database to store all your information, thus avoiding duplicate entries into the system.
7. IT processes are time-consuming and highly complicated
Whatever the size of organization might be, maintaining IT resources is always a hard task. Updating the software, tracking the changes, customizing and integrating with the existing system may demand high financial resource than what the system is worth.
Implementing an ERP solution will give you a new path to respond to the rapidly changing business environment. This will reduce the additional software implementation and up-gradation.
8. Depending on individuals
The production and operation of any organization should depend on processes and information, and not on any particular individual. The smooth production and functioning will be disturbed if only an individual has knowledge about the operation. Even the top management people will need occasional sick leaves and vacations.
ERP solution will make the operations multi-threaded, making everybody know the exact process situation in the organization.
9. Operating cost exceeds your budget
When the resources of the organization are not administered properly, the running and operating cost of the business increases. For instance, multiple entries and hours of time spent on that and interrupted the process flow leads to additional cost to the organization. This will make the operating cost of the system to shoot up exceeding the budget planned.
ERP system provides you exact reports on any deviation from the planned process and hence assists you to maintain the running and operating costs of your business.
10. Customer relationships are gloomy
If your customers are dissatisfied with your service, analyze the cause for the disappointment. An ERP solution will ensure timely delivery of goods and services to customers and maintains a good customer relationship. This also provides the production and shipment details to every department of the organization, so that the customer relationship executive will be able to handle the issues if any easily.