Does it feel like the future has become more uncertain lately? If you and your business are worried about the direction of things, you’re not alone. The world has changed since the pandemic, and uncertainty about the direction of the business environment is a common sentiment.
Confidence in the business environment decreased by more than 10 percent last year, according to the business sentiment index produced by business climate tracking firm, IBSWorld. Small businesses in particular have been concerned about the business climate, with concerns among small businesses at their highest level since 2017.
The outlook remains uncertain this year as worker shortages, disruptions to global supply chains due to regional conflicts and inflation continues to impact business owners. The collapse of Silicon Valley Bank, and the potential for a recession later in 2023, only adds to the concern.
ERP Can Help Businesses Weather the Storm
At first glance, investment in a new enterprise resource planning solution (ERP) during an uncertain economic climate seems counterintuitive. The first impulse for many business leaders during economic uncertainty is a strategic pause to wait and see.
Modern cloud-based ERP can help businesses handle economic uncertainty or a downturn, however, making the move to a modern ERP solution a strategic form of business weatherproofing.
Here are four reasons why ERP helps during a business climate downturn.
1. Increased Operational Visibility
When the economy is strong and margins are healthy, complete operational visibility helps with competitive advantage and profit maximization. But when times are tight or uncertain, full visibility can be the difference between profitability and getting caught by economic headwinds.
ERP enables the operational visibility that business leaders need for navigating changing dynamics and driving greater efficiency during economic challenges. Modern ERP solutions serve as the nerve-center for a business, capturing all aspects of business operations in real-time so business leaders can see what’s actually going on with the business and make smarter adjustments.
The increases visibility that comes from having a complete picture of operations helps with risk assessment, supply chain resiliency planning, improved demand planning and inefficiency recognition for tightening operational dynamics.
2. Improved efficiency
Tightening operations is critical during a downturn. Beyond spotting operational inefficiencies through greater visibility, modern ERP helps businesses of all sizes and industries improve operational performance.
There are several ways that businesses use ERP for greater efficiency.
First, ERP enables a business to automate routine processes for less staff overhead and greater consistency. Automation is baked into all parts of the ERP system, so businesses can set up automations across all departments and cut down on both human error and the time spend on routine tasks. AI assistants within the ERP system both spot areas ripe for automation, and help businesses deploy these automations without undue complexity or the need for IT involvement.
Standard, efficient workflows can be developed and enforced within the ERP system for productivity gains as well. Instead of ad hoc and bespoke business processes that are performed slightly differently depending on employee, businesses can tighten processes and ensure that all employees follow them. Best practices also come standard with ERP, helping smaller businesses level up while still allowing custom processes that might be required for the specific company and its line of business.
3. Better Scalability
In uncertain times, capacity is a challenge. Businesses need the agility to scale operations up or down based on current business dynamics.
Cloud-based ERP sets the table for future growth because system capacity easily can scale up as the business grows and takes on additional employees, lines of business, supplier relationships or sales volume. At the same time, businesses can scale back their ERP backend if demand weakens and the business needs to contract.
Because ERP resources are completely scalable and the same system can be used when business is strong or weak, cloud ERP is extra valuable in times on uncertainty. Usage-based pricing helps businesses buy only what is needed for the current economic environment without limiting growth later on as the business environment improves.
4. Enhanced Customer Service
Businesses are not the only entities that struggle when times are tight. So do customers. This makes customer service even more valuable during a downturn, and good customer service while other businesses are scaling back customer care can prove a competitive advantage.
ERP is low-hanging fruit for improving customer service without significantly increasing cost.
That’s because the centralization of all business and customer data within a single ERP system makes customer care easier and more complete. When all data is accessible from a single source of truth, agents are better able to handle customer issues and give precise, correct information.
Customer hassles also are reduced by not having long hold times or needing the customer to give the same information multiple times to separate customer care systems as well. Customer service performance can be measured more precisely, too, and staffing optimized more accurately. The creation of customer self-service portals is easier, and the use of AI for customer care also is more complete because these systems have more accurate, real-time data to work from.
When pleasing customers is vital, as it often is during an economic downturn, ERP can make a significant difference.
A Strong Foundation Helps During a Storm
A strong digital backend is foundational for an efficient business. That is another way of saying the businesses need a modern ERP system in place during times of economic uncertainty, because ERP serves as the foundation for efficient operations today.
While the first impulse of many business leaders is to cut back on investment and pause new projects during a downturn, rolling out a modern ERP backend solution is an exception. ERP helps a business weather the storm, and a turnkey, cloud-based ERP solution doesn’t require a large capital investment since it is hosted in the cloud and can be rolled out in as little as three months.
So if your business is uncertain about the future or expecting an economic downturn, now is the time to think about your ERP foundation.
To learn more about the costs, benefits, and implementation process for modern ERP, contact one of our experienced consultants at (801) 642-0123 or by writing us at info@nbs-us.com.
