John P.

John P.

3 minute read

Why Your Company Needs an ERP System

Why Your Company Needs an ERP System

Many small and mid-size businesses face problems which can get harder to comprehend and resolve if they don’t have an ERP system. In this article we are going to be highlighting various benefits of adopting an ERP system in your enterprise as well as discuss main problems these organizations are facing when they are not adapting to this technology.

Number one is when an enterprise have too many different competing systems for fulfillments. To give you an example: a product selling organization might be following practice where it will have a different system implemented for each touch point of order fulfillment. That means an order is entered in a different system and for fulfillment a completely different system will be used. Other touchpoint like accounting system might have different checkpoint and one completely different for keeping track of the inventory. With all these different systems on-board one might easily assume how error prone the whole system might be getting. This different touch-point system will lead to breakdown as out of sync information such as wrong quantities, faulty pricing, non-tracking of stock items and missed orders might make it harder to draw a proper big picture making harder to comprehend the big picture.

From all the mentioned key issue one might wonder how much time is wasted/ mismanaged. With ERP system in place lot of disconnection between the departments is reduced to next to zero, to simply put all the different sectors of the organization start to work together intelligently. If product selling organization introduce an ERP system in its workflow then from order entry function, people can see if there’s an inventory in stock which can help them sequence the order to stocking and shipment process. ERP system also manages accounting for sales and sends the invoice to customer after order is received. This all happens without any hiccups or any added extra work. The whole ERP systems function without any common human errors such as double entry and keeps logical record of the transaction. The whole process not only help organization grow at a rapid pace, but it also assures the whole process for customer satisfaction is right the first time. When business deliver this consistency in success rate the profit margin will rise constantly.

Second key problem organizations face when they keep insisting on older model instead of implementing an ERP system is they see rate of their growth hindered. Organization looking to grow will continue hiring people to manage its process, but a poorly organized business will end up using these people to perform low value activities or for rechecking purpose such as double entry. All these activities plus managing multiple data from different entry point to assess if the decision making is on-point becomes at the end a necessary activity for the organization. If an organization has an ERP system in place, then they don’t need their people to work on unnecessary task mentioned beforehand. With ERP system in place one can get reporting real-time, which generally makes hiring extra people unnecessary.

The call to make for an organization is what sort of path to growth they wish to take. ERP system in place can help organization achieve stability in its process and allowing it grow in steady rapid pace; whereas without such a system in place one might experience lower profit margin or slower rate of growth. The call is an easier one to make when all things considered, so be on the rising side of the system equation.