Modern Businesses have, up to very recently been faced to adapt and make quick decisions and with break neck speed to keep up with pressures dictated by trends in market, which on its own presented a myriad of challenges.
With the sever shock brought on by the pandemic compounding the rate of change has become even faster. This in addition to also adding a strong component of uncertainty and lack of longer term visibility to the equation.
These factors pose business decision makers with challenges that can have an impact both on the short term business goals but also on those of the longer term.
Thus it has become a matter of business life or death for managers and executives to be able master uncertainty and quickly make informed strategic course corrections, based on quality data, at very short notice.
This is were an Enterprise resource planning (ERP) comes in providing insight on key KPIs for of a business, for managers to act on in a timely and effective manner.
So What is an ERP exactly ?
Simply put an ERP is a business management software tool that provides real time information/data on the main business processes, of an organization. Also this software is used as a central repository of the data collected. The ERP stores, manages , and aids interpretation of key business KPI such as Profit, Cashflow, financial transactions and so on, in an organized and easily manageable fashion. Thus it also acts as a communication tool for the business team to disseminate mission critical information throughout the organization.
Thus an ERP acts as;
- A Central single source of information or a single source of truth Centralized one source of truth. For instance one customer list.
- A conduit for the dissemination of relevant information and business processes throughout the organization.
- A window providing an up to the minute snapshot of e relevant perspective of a particular business aspect such as financial position for instance.
All this will keeping a unified user interface while also adding an improved security, layer for sensitive information, to be kept.
Naturally the above cannot be efficiently handled with manual methods. Also Manual data management lessens productivity speed, but if you invest in the ERP software, it keeps track of all the incoming and outgoing transactions.
What business areas can an ERP Improve Finance
An ERP provides real time recording of transactions that are carried out through the business, be it issued and received payments, goods accepted at warehouse, shipments released from warehouse, project works in progress and so on.
This in turn is reflected directly in the company accounts with transactions being recorded in the GL. The central finance/GL repository and Automation that the ERP brings greatly simplifies operations related to accounts receivable, accounts payable, improves cash flow problems, and cash management. It becomes pretty easier to manage the entire organization by generating information and compiling it. Critical Account department tasks are simplified and made far more less time consuming to perform such tasks could include the for;
- You can use an ERP system to estimate the capital requirements and for management of cash.
- You can accurately come up with a budgets and forecasts.
- Allocation of costs for various activities such as labor, raw material, and transportation.
- Management of payments, including those made to the vendors and paying wages to staff.
- Optimization and cost reduction of inventory.
Improved Inventory Control
A major challenge for growing companies is tracking and monitoring their expanding inventory levels. ERP utilizes barcoding, RFID tags and serial numbers to keep tabs on your inventory at every stage during the supply chain. These tools help you keep track of inventory levels at different warehouses. Furthermore, the real time picture and planning tools can also play a major role, in keeping the capital cost of inventory to a minimum as well as providing the possibility. Additionally it also provides with a means to reduce loss resulting from waste originating for instance from expired goods , lost items and so on.
Analytics and BI
The Central live data and real time recording of transactions in conjunction with Reporting, analytics and BI tools can provide the decision maker with easy to consume often visual analytics dashboards, that enable critical business decisions to be made on real up to the minute data. Most ERP solutions provide a customizable dashboard so executives can see reports when they first log into the system. These reports may include everything from income and expense statements to custom KPIs that offer insight into certain functions. Lastly, reports typically come with access levels, ensuring only relevant staff see valuable company data.
Improved Productivity
With traditional methods, tedious tasks are completely unavoidable. Tasks like generating reports, monitoring inventory levels, timesheet tracking and processing orders have historically taken employees hours to accomplish. In addition to taking up time, these processes lower employee morale and open yourself up to human error. After the umpteenth hour of entering the same line of data into different forms, even the best staff members are bound to make a mistake.
Quick reaction time
When you start gaining popularity in the market, and your goodwill gets enhances, even the small mistake can negatively impact your reputation. So it is essential to enhance the quality of service as well. To offers the best customer services, your executive needs to perform well, for which they require full-fledged details across all the departments.
Therefore most of the industry is talking help of the software which makes their work easier. The majority of the ERP software comes with an in-built feature that lowers down duplicate work and manual data entry.
Regulatory Compliance and Security
Another reason for investing in the ERP software is that it will help you in all the operational activities. Most ERP software keeps the Compliance and regulatory changes track and update their features to fulfill the business's needs.
Adoption challenges and considerations
Probably one of the major challenges is the justification of the investment for the ERP project. One must remember that this involves both Direct and indirect costs. Direct costs could include the capital purchase of licenses, the implementation costs etc. while indirect costs could include the the investment of allocating team members to effort related to the ERP project such as Time for Analysis and Business process restructuring and allocation of time for training as well as reduced productivity while team is getting up to speed in new environment.
In order to maximize the ROI of such an expense the following criteria should be clearly understood and considered carefully.
Long-term Continuity of the Platform.
A strong track record of success speaks for itself. Apart from the reasonable expectation of robust industry-proven software and great customer service, you can safely assume that a well-established ERP provider is here for the long haul, and has a vested interest in your current and future success.
Industry Adoption
By selecting an ERP Platform that is has a wide user based throught industry both locally as well as internationally you are guaranteed to build your ERP solution on a solid base.
This in conjunction with an experienced ERP supplier who has ample industry experience, that can provide insights via a team of experts who speak your language and understand your business needs also greatly facilitating the smooth progression of the project. This saves a great deal of time and effort, and reduces risks and results in a quicker, easier implementation.
Successful ERP Implementation
Technology is only as good as its implementation. Your ERP supplier should have the knowledge and experience to adhere to project management best practices from the outset, with all controls and governance activities strictly managed to ensure that all objectives and expectations are met. Ask to see testimonials from other customers within your industry to ensure that your potential ERP supplier delivers on its promises.
Post-implementation Support, Education and Training
In order to maximize the benefits of your ERP investment, it is imperative to provide your team with adequate support and training. The typical workforce spans three generations, with varying degrees of technological comfort and rates of learning. One cannot expect true competency to be achieved through onsite training alone.
Ongoing vendor support, as well as easy-to-access online training materials and tutorials, are essential to ensuring that your users are able to learn and adopt the new system at their own pace.
Conclusion
The shift to this state-of-the-art software can provide substantial organization and business benefits while also no longer being the cumbersome, disruptive, tortuous process it was once purported to be. What formerly may have been a long, arduous trip for those businesses that didn’t quite fit the template has now become an enlightening journey of discovery accessible to companies of all shapes, sizes, and sectoral flavors.
All things considered however, partnering with trusted and experienced ERP partner is key to making your ERP adoption project a success.
For more information on the topic please contact Datatech as we have highly qualified and experienced team of consultants handling ERP in Malta and Libya. Datatech is an official partner for SAP Business Systems.
