Investing in a new enterprise resource planning system (ERP) takes significant time and money. Even moving to cloud-based ERP is a large project, and cloud-based solutions are much easier than the older generation of on-premise ERP.
There’s a reason for the effort, however; ERP creates meaningful value for companies and a healthy return on investment. That’s part of why the sales of ERP software generates more than $20 billion every year, and achieves a 10 to 20 percent annual growth.
With this in mind, let’s explore the ways in which ERP creates value.
Boosts Efficiency and Saves Money
Research shows the average large American company loses in excess of $45 million in productivity annually due to inefficient sharing of knowledge. More than five hours of a worker’s time is lost each week as they wait for key information, and this leads to delays, frustration, missed opportunities, and lost income.
In fact, roughly 60 percent of workers claim it is either “very difficult” or “nearly impossible” to secure information from colleagues needed to do their job.
ERP centralizes data from across businesses, encompassing different areas (sales, human resources, production, inventory management, etc.). Any authorized worker can access real-time information relevant to their job through a single system, without waiting for anyone else to pass it on.
This boosts efficiency, reduces wasted time and money, and prevents the need to train employees to use multiple systems. Once they know how to navigate the new system, they’ll always have access to critical data.
Menial tasks can kill productivity. Being productive accounts for just 60 percent or less of work time for the average employee, partially because of manual tasks from inefficient processes.
But there’s no need any longer for workers to take minutes at a time to create reports, process orders, check stock levels, etc. Most manual tasks can be automated with ERP solutions, freeing up valuable time for employees to channel into their core duties.
Furthermore, expecting workers to handle every aspect of their job manually can leave them with too much to do. This may lead to human error, with the potential to cause bigger issues down the line. For example, 25 percent of all data breaches in the past year were because of human error.
Automating with an ERP system removes tedious tasks from employees workloads, and eliminates the danger of costly mistakes. And productivity will improve with all the extra time workers now have as a result of automation.
Improves Employee Monitoring
Managers can access cloud-based ERP securely from any location at any time—on any device. As a result, essential business decisions can be made more quickly and without delays. There’s no need to wait until the office opens in the morning to fix an issue or check data; the best ERP systems put this information at your fingertips around the clock.
And as information is updated in real-time, managers know all data they study is accurate. This creates a solid foundation upon which to make choices inside and outside the office.
Betters Customer Experience
How much impact can better customer experience create? Roughly 86 percent of consumers receiving a great customer experience were more likely to make a repeat purchase from a high-performing brand. This is in start contract with the 13 percent that make a repeat purchase from businesses with poor customer experience.
ERP systems can improve the level of customer experience that businesses deliver in multiple ways.
All customer data can be synchronized and stored in a single location for fast access to order histories, complaints, etc. Customer queries can be responded to without having to log into and navigate a separate system, reducing delays.
Support teams will have access to personal details, account histories, and important notes when interacting with customers, too. This visibility allows reps to provide more bespoke service and resolve problems faster, without needing to track information down in a separate tool.
Adds Analytical Capabilities
ERP systems enable business intelligence through built-in analytics functionality and the ability to analyse all company data with third-party solutions. Customized reporting gives deep insights into almost any area, pulling information together more quickly than if you depended on several separate tools.
Dashboards can be tailored to present key data, and automated reporting builds powerful analysis while you complete other tasks. KPIs may be tracked in real-time, too, so managers can monitor progress based on critical metrics.
Automates Inventory Management
Almost half of all small to medium-sized businesses either use a manual inventory-management process or don’t track their inventory at all.
But effective inventory management is vital to prevent overstocking, understocking, delayed deliveries, and customer disappointment.
ERP systems allow you to take total control of your inventory. Automated reports can be created on inventory valuations, BOMs, material requirements, and more. Inventory across several warehouses may be managed using a number of methods (such as First-In First-Out), and shipping can be automated, too.
Companies that use modern, cloud-based ERP systems can achieve better inventory management as they scale, and this prevents waste, unnecessary purchases, and lost sales.
ERP creates real value for businesses of all sizes, in all industries. These systems offer full visibility across customer service, sales, accounting, inventory management, human resources, and more. All data crucial to running a successful company is unified for maximum convenience and minimum delay.