The top six benefits and challenges of running an ERP system

The benefits and challenges of running an ERP system are countless – but you should always evaluate carefully before taking the plunge.

That’s why we’ve put together the top six benefits and challenges of running an ERP system – read on to better inform your decision-making before taking the next step.

 

Benefits

 

Visibility of operations

Investing in ERP provides you with complete visibility of your business operations. This means the software allows you to assess every process within your company and make informed, data-driven decisions that affect your bottom line.

Importantly, this capability can be made accessible to anyone that you want within your business – allowing senior management and others to make decisions that count.

For example, you could use visibility to check on inventory levels in real-time. This improved understanding can lead to anticipating problems rather than reacting to them, as your improved insight allows for faster responses or even knowledge of problems that you didn’t even know existed.

Having this information accessible in one central location also allows for better collaboration and more fluid information sharing between departments, meaning everyone is singing from the same hymn sheet without running contradictory processes.

Improved efficiencies as a result of better visibility will ultimately lead to a healthier bottom line.

 

Improvements to reporting and planning

Better reporting and planning go hand in hand with improved visibility.

In joining up your operations and departments, your business can benefit from a single source of truth that can then be generated within reports. With improved reporting, you can then begin to analyse data and make changes as appropriate, freeing you from multiple spreadsheets or email chains.

It is unsurprising that better reporting can transform your financial reports and significantly reduce the stress of month end. Even custom reports can be created with little or no additional IT intervention.

 

 

Greater efficiency

It should come as no surprise that ERP software can make substantial improvements in efficiency of your business processes.

One of the major strength of ERP is its ability to reduce the time it takes for staff to carry out their daily activities.

In many cases, routine tasks such as re-ordering or generating reports can be automated. Elsewhere, tasks that are being duplicated due to a lack of communication between departments can be eradicated completely through identifying inefficiencies.

If done correctly, your new system should massively reduce repetitive manual tasks that drain staff time and free them up to carry out the jobs that matter.

 

 

 

Disadvantages

 

Cost

Unsurprisingly, improvements to your business processes, reporting and visibility of operations come at a cost.

A traditional ERP system is a significant investment of time and money and this is a sizeable stumbling block for many businesses (particularly those manufacturers that are either small or medium sized).

Thankfully, there are solutions that save on cost. Moving your system to the cloud allows you to benefit from ERP without the need for large and expensive IT departments.

Always keep in mind that an ERP system should ultimately save you money if implemented correctly.

 

Maintenance

The cost of implementing ERP software is the first hurdle to negotiate, but once your system is in place, you may be worried that it you will incur heavy financial and staff time costs from maintaining your product.

You may be forced to hire additional IT staff to help keep it up and running or you may even require outside specialists to ensure you get the most from your investment.

Another consideration could be further investment in new hardware that is capable of supporting some more sophisticated ERP solutions.

The key is to remember that the time and money invested in maintaining your ERP system is saved by the efficiencies that reach deep within your business – producing real benefits for years to come.

 

Complexity

While ERP software aims to simplify you business processes, operating such a system requires significant expertise.

Ensuring the proper maintenance and continued optimisation of the product demands a knowledgeable IT specialist.

It can also be difficult for untrained staff to get to grips with.

Make sure that those using it are properly trained (either in-house or by an ERP professional) and make a special effort to ensure best practice is being adhered to at all times to prevent your software depreciating.

 

Further Info

Are you still looking to consider the pros and cons of an ERP system in more detail? Contact one of our ERP experts by clicking here.