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How can a medium-sized firm use ERP to improve its bottome line?
I can see that moving up to a modern ERP solution makes sense for a large company, but how can a medium-sized firm use it to improve its bottom line?
This question was asked during the Sage ERP Webinar, Maximizing Business Efficiency: As Easy as "E-R-P".
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3 Answers
If you are a fast-growing or midsized company, the primary benefits of a strong ERP system would be:
- Get more accurate, more timely visibility in to performance across your entire business (cash flow, GL, lead, inventory, orders, customers, etc)
- Increase productivity by automating order management processes, streamlining processes, reducing time spent having employees enter data multiple times in to different systems, and marrying data sets from different systems together
- Decrease IT complexity and cost spend procuring, maintaining, and integrating multiple systems and databases
- Preparing your company to scale more efficiently to handle growth
You do have to watch out for large upfront expenditures, long implementation time frames, employee training requirements, and server and hardware purchases & maintenance required with midmarket on-premise applications. Many high growth and midmarket companies are turning to Cloud / SaaS ERP systems instead because of their greater ease of use, faster implementation, better total cost of ownership, pay-as-you-go contracts, anytime/anywhere advantages, and real-time data.
Rob
Michael:
From my perspective as a person who helps mid market companies choose and use software (ERP, CRM etc), here are my thoughts:
1. ERP per se will not improve your bottom line, period. That is the “silver bullet” syndrome that often traps people’s thinking about their business need. It applies to any software.
2. What really helps your bottom line is a combination of these elements:
a. Start with a clear understanding of your business strategy
b. Make sure your business model is aligned to that strategy e.g. are you multi-channel, service, service and product etc
c. Design/refine business processes and people structures to execute the strategy e.g. what are the best processes that you should deploy (your “To Be” state?
d. Evaluate the technology solutions that best fit your “To Be” requirements (an “Ounce of Selection is worth a Pound of Implementation”)
e. Implement the processes through a focused configuration of the software and executive levele commitment to managing change (in how people work, what training they need, staying the course and measuring progress).
3. Companies that ignore a, b and c in #2 above often encounter unhappiness over ROI of the investment (whether SaaS or on premise) and ultimately their financial performance.
If you would like more info, here’s a link http://www.transforming.com/pdf/TSI%20InfoSource%20March%202010%20-%20Softwar...
Best regards
Len
The question is silly. How?
1. Define BP
2. Define what is wrong with that
3. Choose ERP vendor by functionality and TCO
4. Create team
5. Properly implement
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