Tuesday, January 4, 2011

Do You Need an ERP system?

I read a report where it said not even 10% of SMEs currently use an ERP. This raises a question do you really need an ERP. But if you see most of the leading larger companies use some level of ERP system. Then the question should be when do you need an ERP system after you become a large company or to become a large company.

Just a year before ERP software implementation meant an investment of few lacs and overheads in terms of IT infrastructure and manpower. Today because of sheer power and reach of internet ERP solutions are available in cloud model as a service which require ZERO capital investment, very fast to implement and low cost of ownership. At ERPNext it will cost youas low as INR299 or USD7 per user per month. Now ERP systems are become so much affordable and hassle free that in near future it will drive mass adoption and companies who will not adopt will lag the competition.

The primary reason an ERP solution is so vital to a company’s success is efficiency. Manual processes can drain both time and money. Failing to automate critical, yet routine business activities makes it nearly impossible to scale the business.

ERP solutions enable companies to achieve true business process automation by streamlining many of the important day-to-day tasks across a business, and freeing up staff to focus their efforts on more complex initiatives that require more personalized attention. This can not only boost productivity and worker output, it can dramatically reduce operating and overhead expenses. 

ERP solutions are critical to increase information consistency and accuracy. Most of the companies suffer from incorrect and inconsistent information across the business. For example, if the accounting department and the sales or delivery department access two different databases which aren’t integrated, a customer with a billing or delivery question will likely get an inaccurate answer if they call for assistance. These problems, although they may appear small on the surface, can add up, leading to bigger customer satisfaction and retention issues that can negatively impact revenues and market share. 

ERP solutions make accurate real time information available which makes companies far more agile by helping them quickly identify problems in the business, and take immediate corrective action. An ERP solution can also empower companies to be more responsive to shifts in the marketplace, quickly changing strategies to address new customer needs as they emerge.


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