Check out our thoughts on the top high, medium and low value benefits for an ERP solution.
We have been involved in 100's of ERP (Enterprise Resource Planning) business case meetings and discussions so we've taken this experience and put together our tip high, medium and low value benefits as well as intangible benefits for you to consider.
1. Labour Saving - ERP solutions reduce the need to repeat tasks (e.g. re-keying), or manual tasks (e.g. stock taking), therefore employees time will be freed up – potentially leading to redeployment elsewhere in the business or avoiding the need to hire additional staff to maintain old practices.
2. Track & Trace - From food manufacturers to steel, tracking raw material inputs and batch manufacture identification, it is the company's responsibility to know exactly what is contained in a finished product and to have a fast response to problems. Currently this may be managed by extra cost incurred through headcount, time, manual records – all with associated inefficient management and storage costs.
3. IT Maintenance Cost Reduction - By having an improved ERP process in place, less will need to be spent on supporting existing solutions. This is due to improved efficiency, resilience etc.
4. Better Forecasting - Stock Control - Real time order and stock management gives better understanding and control of business processes all facilitated through improved ERP systems. Not only will more stock outages, and stock wastage be avoided, but the amount of working capital will be reduced through the need for lower buffer stocks.
5. Improve Cash Collection - Business processes that generate electronic invoices, provide better accuracy and detail within invoices including shipment details, proof of delivery etc., will lead to faster, more accurate and more frequent delivery of invoices to clients – inevitably leading to faster invoice approval and payment.
1. Analytics Savings - It is possible for a wide range of people from the most junior to senior staff to spend hours preparing reports from multiple disparate systems attempting to reconcile different versions of the truth. Across the board efficiencies save clear £’s through better decisions, reduced meeting times - even if not naming actual headcount savings. Also, by connecting all department into one visible system, creating reports will be much quicker.
2. Margin Visibility Improvement - The ERP solution could give visibility of order profitability that was not previously available. Giving the ability to selectively deal with orders based on visibility of their profitability, the size of the client, or promised commitment dates.
3. Software Portfolio Consolidation - By having one solution to solve all the Customers’ requirements, the licensing costs for current solutions will be reduced / eliminated.
4. Defer / Avoid Capital Spend - This is about keeping current systems together, how much will it cost the Customer if a new solution is not chosen? Will it be avoided completely by making old systems redundant?
5. Increase Revenue of Customers - By having all customer information / details in one place targeted marketing campaigns can be sent out to up-sell, cross-sell, bring back old and brand new customers.
They may typically be lower in value compared to other benefits however they may still be important to your customer, so don't forget to included them when relevant:
1. Avoid Penalties, Returns & Credit Notes - Better accuracy on invoicing, input of order details or part number accuracy can avoid mis-shipments that aren’t returned, product recalls or product reworks avoided – all of which are pure margin / bottom line savings.
2. Haulage Costs - Some ERP systems have route optimisation / address delivery preference or delivery time commitment options which can save money through delivery route optimisation, fuel savings, or lower total fleet requirements.
3. Minimise Regulatory Costs - The Customer has obligations to report and the cost of reporting can be significantly reduced with an ERP solution. Alternatively, non-compliance may result in fines which could be reduced by better monitoring.
4. Reduce Marketing Costs - By having all customer information in one place, more effective, targeted marketing campaigns can be sent out.
5. Maverick Buying Reduction - Improved business processes and data visibility can lead to reduced purchasing spend through consolidation of existing contracts, control over purchasing of remote branches or site workers, together with improved access to information required for volume price negotiation.
These can be very important for company strategy and decisions, but are traditionally difficult to quantify:
1. Customer Satisfaction - This is an important factor – happy customers should lead to repeat purchasing etc. but this can often be hard to quantify.
2. Brand Reputation - Customers’ perception as a brand and minimising damage to wider corporate perception.
3. CO2 and Green Considerations - Reduce journeys, avoid pollution / congestion – for those corporate commitments made on the environment but conversion into £’s is not always possible.
4. Reduce Litigation - Management visibility over all activities in one central place can lead to cheaper / faster recovery of information for litigation, again hard to put a figure against.
5. Avoid Stationary Costs - Avoiding paper copies, other stationery costs by having automatic invoicing. However, this will not amount to much in most clients.
All of these benefits (plus many, many more) are within the un-customised version of Shark, if you like to know more contact us - we are always here to help!
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