6 Signs that Your Company is Ready for an ERP Solution
Adopting an enterprise resource planning system is a big decision in the life of a company. On the one hand, it promises efficiencies and increased levels of productivity that you only dream of right now. On the other, it involves massive efforts and investment that would be wasted unless the implementation is done in a way that successfully addresses key requirements.
Very often, when a company reaches out to us, they have been living with inefficiencies in managing their business for some time. However, because of deeply ingrained cultural habits they have difficulty pinpointing the right time to make a change.
Here are six signs that your company is at that critical point where a new ERP system should be considered.
1. It’s taking too long to get vital information
If accessing important figures like order details, stock, margins and revenues are taking you more than a couple of hours, you have a problem. Why? When it takes so long to get actionable information, people start to make decisions ad-hoc or by “feel”.
While we’re not discounting the intuition of a seasoned employee, it’s not a sustainable way to operate, and can be a limiting factor in achieving real growth. Real growth involves increasing revenue while at the same time lowering costs and increasing margins. You need real-time data to make timely decisions, to assess performance, key issues and to leverage advantages.
Often the first indicator that a company needs a new ERP is found in the accounting department. If you’re still using paper for orders and invoicing you need to assess your current processes and do a cost vs. benefits analysis. What will this do for your business in the medium to long term? Make sure you’re considering implementation and training costs, which are a vital factor businesses sometimes underestimate. If it looks like the incremental benefits are immediately visible, it might be time to take the leap.
2. Your inventory manager wears a magician’s hat to work!
Inventory management should not require advanced crystal ball skills! Ask yourself a few questions to see where you stand: Are you constantly dealing with back orders? Conversely, is the value of your on-hand inventory excessive in relation to demand? Do you know which items are slow moving or should be discontinued? Can you track your inventory to sales ratio to quickly identify problems? Do you constantly have to do inventory counts to reconcile your GL? Are your item costs accurate?
Managing inventory in a growing company is a vital component of the success of any business. A good ERP system, managed properly, can help you with all of the issues above and more.
3. Too many silos spell more harm than good
Is your data stored in multiple systems? Think about how your employees record, track and process information. For example, do you use one system for invoices and bills, and another to enter sales orders? Are you managing inventory on spreadsheets? Is purchasing done by guesswork? Are there gaps that need filling manually? These are core processes that keep your business running and have very little room for error.
An ERP solution that integrates all facets of your operations making all essential functions reside within one database is necessary. This way, if you need those sales margin figures for the year, you have that information now, not when someone learns to cast a spell to summon the information!
An integrated ERP system ensures that all team members are working with the same information. On-demand information empowers your team to make informed decisions quicker, whether in dealing with short-term sales or longer term strategic planning.
4. Your ability to accelerate profitability is limited
Who doesn’t want to reduce costs and find ways to be more profitable? While, in theory, this is a goal for every business, without full visibility into your value chain and your operational numbers, you’re unlikely to have the confidence to make any solid moves on it. A key first step to business growth is data with integrity. To get that, you need to be supported in the back-end by accurate data and presented with a flexible front end reporting system.
5. Service and delivery standards are impacted
Good service means having a great product, selling and delivering it efficiently and being on hand when the customer needs your help. For this, you require the right inventory with a well managed customer service process. As a medium to large company, it’s unlikely you’ll be able to do this with anything less than an enterprise software solution. When sales, inventory and customer data are maintained separately, you risk being out of control of your supply chain, which puts your reputation at risk as well.
6. Your team has outgrown your older applications
If people are finding little or no benefit in using your current system, even to the point of finding it a chore to use, that’s a big indicator. Complex and time-consuming information technology infrastructure does get expensive in the long term. Repeated systems upgrades and customization cost you, hampering efficiencies and slowing down response times. Further, this kind of ‘patchworking’ is a quick fix that won’t tide you over for too long.
If you have one or more of these pain points, the time has come for you to consider enterprise software, whether it’s a customized solution or something out of box.
For more information on how our solution can be modified to suit your needs at much lower costs than custom builds, please get in touch with us.
