How do you know when it's time to implement an Enterprise Resource Planning (ERP) system? Your SME is doing fine, and it may be difficult to know if a new ERP implementation will provide a good return on investment. The indicators discussed below will illustrate situations where an ERP system will not only help to support your current operations, but will also give you new opportunities for growth.
Your Employees Are Battling Paperwork
Is there ever a time when an employee gathers information from a business system, but it's not in a useful format for analysis? If that's the case, the employee will usually end up massaging the data and putting it into a spreadsheet. That's a clear sign that an ERP system can do the analysis and produce a meaningful report. As a result, you'll have more accurate data in real-time, and you'll be able to make informed decisions much more quickly.
Another thing to look for is an employee preparing a spreadsheet, then routing it to another department to be combined into another spreadsheet for presentation to management. That means that your individual computer systems don't talk to each other, forcing employees to do the analysis of organization-wide information by hand.
You Wish You Had More Information to Run Your Business
Even if you're not ready to jump into total digital transformation, it's always painful when you don't have the information you need on a timely basis to make informed decisions. How long do you think it would take you to gather the following types of information?
- Your average year to date sales margin
- The number of late orders this month, quarter and year
- The average time to fulfill orders this month compared to this time last year
- This year's customer retention rate
An ERP system can provide this type of information whenever you need it, without waiting for monthly, quarterly or annual reports.
You Spend Too Much Time Trying to Get Answers to Relatively Simple Questions
Let's say you get a complaint from a customer about an order you recently shipped. First, you contact accounting to determine if the invoice matched the purchase order and the packing slip. Then, you check with production to determine if there was a problem that slowed down the order. If that doesn't answer your question, you contact the shipping department to find out why the order wasn't shipped on time.
If you had an ERP system in place, it would consolidate information from all of these departments and you'd get an immediate answer. In addition, if the order was going to be late, the system could have notified the sales department, allowing them to head off the customer complaint before it happened.
Your Accounting Processes Take Too Long
If your accounting personnel are still working with paper invoices and sales orders, they're probably also spending time entering data from those documents in different accounting and sales systems. As a result, your accounting department isn't able to spend time on value-added tasks such as managing vendor relationships.
An ERP system, like SAP Business One, with an advanced financial module, can help you significantly streamline your accounting processes and provide you with more in-depth financial information. An ERP integrates with every part of your business, including sales, purchasing and inventory. It will provide you with access to the type of data and analysis that accounting software just can't match.
Is It Time for You to Implement an ERP?
Think about the challenges you face in today's competitive environment. Implementing an ERP won't add to the complexity of your existing systems. Instead, it will give you the agility you need to respond to your changing business needs with ease.
If you'd like an expert evaluation of what an ERP could do for your business, contact us today for more information.