Does it take longer than it should for your company to reconcile financial transactions at month’s end? Do you rely on guesswork instead of hardcore facts and figures to forecast sales? Do you sense a faltering in the customer satisfaction ratio? Sound about right? If yes, then these are tell-tale signs your enterprise is in dire need of an efficient ERP system.
Keep in mind that no two companies are same. Therefore, you won’t find a single major indicator saying: ‘’Now’s the time to install an ERP’’. Here are some reasons that show why companies need ERP systems and why they should get one.
Sign #1: Lack of centralized processes
When employees use one software system to track, record, and process information and the accounting staff uses another, then ‘staying on the same page’ becomes an arduous task.
Businesses need a common point of interaction, and one location to store information in order to save time and effort wasted by switching back and forth between multiple tools and software.
When you run many front- and back-end systems, you risk more inefficiencies and possible damage by decentralizing the processes.
An ERP system helps you connect all the dots by centralizing all processes in a common hub. You get accurate information from all departments since the system updates in real time.
In the absence of accurate data, your inventory can suffer and cause a ripple effect on everything from financial to marketing to sales.
ERP consolidates everything; giving you a common place for retrieving the required thread of data with up-to-the-minute information.
Sign #2: It takes forever to retrieve needed information
If someone asks what the average sales margin of your business is, how long do you think it will take to answer this question?
What if someone queries about the KPIs and other complicated metrics such as ‘sales until date’ and the ‘volume of order per day’?
If yours is a business that relies on spreadsheets and siloed systems that demand constant monitoring and updates, chances are you’ll take plenty of time before you can come up with an answer.
If your business is not functioning at lightning fast speed today, you’re missing out on profit. Your employees should be able to access key data immediately without delays and without having to search for it across multiple places.
An ERP system offers a holistic view of the entire business operation no matter when you need it. Staff members can access the correct data at the right time to do their job efficiently and effectively.
Let’s look at an example of a customer asking for the full transaction history. With a handy ERP system, a sales rep can extract the customer history proactively without making the customer wait which could lead to low CSR (Customer Satisfaction Ratio).
Sign #3: Accounting is time-consuming and complicated
In any business, accounting is the first department that benefits most from an ERP software system.
The days of paper-based sales orders and invoices are long gone. It makes no sense to work hours each day manually transferring data from paper to an online system. The amount of time spent on these tasks is pointless and adds up to a considerable loss of productivity and lost business.
An ERP system can perform operations in seconds what a human can take hours to do. Think about the time a business saves by putting accounting on autopilot and using the free time towards more productive tasks.
Sign #4: Tedious financial reporting
This point parallels the last one. It doesn’t make sense to invest hours of time consolidating accounting related information just like it makes no sense to spend hours creating financial reports when there’s an easier and efficient option available.
If it takes forever for your finance department to reconcile and consolidate data across countless spreadsheets and different software applications, then you’ll see a significant positive impact in your department after implementing an ERP solution.
Release your accounting staff from wasting hours rekeying numbers, reconciling data, and cross-posting information all created manually. ERP stores all the financials and related data within a single database.
Staff can prepare, extract, and compile critical reports and share them proactively and productively.
Sign #5: Sinking CSR and bottom line
Inventory management may be effortless when the business is small. But as operations grow, it becomes much more challenging.
You need a system to monitor and keep track of whether you have the right amount of product at the right time in the right location for uninterrupted business.
When inventory, customer, and sales data reside in isolation, it can cause cross-functional issues. Sales come to a halt if the stock is suddenly out and there is a delay until the next shipment arrives.
What’s more, if a customer is inquiring about shipment status or product availability and the sales rep can’t provide a quick answer, it results in a poor business reputation and a sinking CSR.
An ERP system keeps all departments on the same page by giving everyone access to the same information with no discrepancies in the middle.
Customer Service Reps can answer customer queries related to order and shipping status or other service issues without having to cross-check with other departments.
Many ERP systems allow customers to simply log into their account online and check their order status, eliminating the need to contact customer reps altogether. Meanwhile, inventory managers can see stock supplies decreasing and reorder more products to meet demand.
Sign #6: Complicated IT processes
Managing multiple systems spread across the business can be a nightmare for the IT department. They need to customize, integrate and maintain each individually and also upgrade the system regularly. All this can add up to complexity, huge costs and a waste of staff and time resources.
System upgrades alone can cause more troubles than solve them. As discussed earlier, the updates are both time-consuming and expensive. You need to ask yourself: “Is it worth it?”
If you can relate to any of the scenarios above, it’s time you switch to a smarter alternative – an ERP system.
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Siloed and independent business systems add unnecessary complexity. They lead to more inefficiency.
ERP technology combines the efforts of all departments so businesses can be agile and adapt to rapidly changing business needs.