Can ERP save your money business? In our experience, the answer is definitely “yes.” Enterprise Resource Planning (ERP) software, used correctly, will drive savings in multiple categories of business operations.
ERP at a Glance
The term “ERP” has become a bit of a misnomer. When ERP made its debut in the 1970s, the technology was all about running big manufacturing plants and handling supply chains and logistics for industrial companies. This is still the core of ERP, but today, an ERP solution can do so much more. In fact, modern cloud-based ERPs like Acumatica can run virtually every aspect of a business. ERP does accounting now, along with service management, Customer Resource Management (CRM), project management, project accounting, Materials Requirement Planning (MRP) and more.
High-Level Cost Savings from ERP
How does use of an ERP solution translate into savings? In the big picture, it’s about operating more efficiently. ERP helps people work more quickly and accurately. Process automation cuts down on error-prone manual steps. Miscommunications about orders, inventory, logistics and so forth generally decline with the introduction of ERP. Learn more about the signs you need ERP software.
When we help a customer deploy ERP, they tend to notice right away how much faster everything starts to move. They didn’t realize before how seemingly minor things like chasing down paper bills of lading or returning phone calls slowed down operations. ERP makes people more productive. With people doing more work in less time, the cost doing business drops.
Part of the productivity gain comes from the centralization of all business management processes into a single system. There’s no more porting of data from operations to accounting software, and so forth. People get a continuous, real time overview of data regarding orders, support cases, inventory and the like.
Where ERP Saves Money, Specifically
On a day-to-day basis, we see ERP saving money for our customers in the following specific areas:
- Better control over inventory control—Inventory costs you twice. There’s the carrying cost of parking cash in inventory. Then, you have inventory handling costs like shipping and receiving and related accounting tasks. ERP helps you automate many of these processes. And, up-to-date reporting and predictive forecasting—along with smarter production management—help you keep inventory carrying costs to a minimum.
- A faster, smoother information flow—The centralized nature of ERP and its rich data reporting capabilities, coupled with automated notifications and task management, result in a smoother, faster flow of information across the organization. People can make more informed decisions and stop using email to manage workflows.
- More coherent supply chain management—ERP enables you to coordinate purchasing and supply chain, monitoring dependencies and keeping everyone involved informed about the latest production statuses. Learn how ERP can promote a sustainable supply chain.
- More accurate, timely invoicing—An ERP solution speeds your cash cycle with timely invoicing. Learn about the benefits of ERP for accounting and financial management.
- The ability to anticipate, rather than react to problems—Data visualization and automated alerting can give your team the ability to see potential production and inventory problems in the making. This way, they can solve them or devise a response before they cause trouble.
All of this depends, of course, on how well you implement your ERP. The software alone won’t do much if your people aren’t making the most of it. This is where we can help. We have worked with many businesses on the implementation of Acumatica and other systems. For a demonstration of Acumatica or a consultation on how software can help your business run better, contact us today!