27 Apr 2023
Enterprise resource planning (ERP) technologies may require a huge money investment for adoption. On average, ERP implementation costs range from $50.000 to $750.000 according to a LinkedIn statistic. Despite the price, the global ERP market will reach $74.2 billion by 2023, and 50% of companies are soon acquiring, upgrading, or planning to update ERP systems soon. The popularity of ERP implementation boils down to its effectiveness in lowering production costs. In this article, we will outline five ways an ERP system can help your company achieve cost optimisation.
1/ ERP solutions Increase Efficiency and Decrease Operational Costs
ERP software integrates fundamental business operations. Instead of requiring separate systems for different departments, an ERP system centralises and integrates these operations into a single system. No matter how big or little, the objective is to increase information flows and streamline procedures throughout the entire organisation.
In essence, you can execute more work (with automation) with less effort, time, and staff. That ultimately results in lower operational expenses all around and puts your company on the path to expansion.
2/ ERP System Implementation Improves Communication and Data Exchange with Better Collaboration
With the adoption of ERP software, many firms experience an easier exchange of business information. Thus, important stakeholders can see business transactions happening across the entire enterprise almost instantly.
ERP systems help increase data information exchanges with more precision, which means decision-makers can make better, more timely company decisions. Automation helps eliminate errors and remove factors produced by people-based procedures. By lowering frustration and raising productivity, automation also improves employee satisfaction. They tend to be happier as information interchange is made simpler and organisational-wide communication increases.
3/ ERP Adoption Reduces Process Time and Centralise Company Operations
An ERP solution can streamline, standardise, and automate business operations such as: accounting, customer care, inventory, and supply chain management. ERP systems reduce duplication of effort and save time. Nowadays, a well-designed ERP system will centralise all business functions, which will also encourage more prompt and effective everyday operations.
Furthermore, it’s important to note that a strong ERP system will grant you access to analytics and dashboards. This enables you to maintain track of processes and workflows and provide thoughtful feedback to teams for improvements while informing key stakeholders.
4/ ERP Software Assists Inventory and Supply Chain Management
Companies in the manufacturing industry have long favoured Manufacturing ERP systems. Getting a more thorough awareness of the supply chain and inventory volume can greatly benefit manufacturing businesses.
An ERP system can assist you match your product inventory with the present and future demands of your customers, whether you need insight into ordering, replenishing, or reviewing supply needs.
With the use of a good ERP system, you may reduce product shortages, proactively manage supply chain gaps, and better budget for inventory levels. Besides, ERP software allow you to optimise wasteful spending and purchases for things that might stay in long-term storage facilities.
5/ ERP System Implementation Cuts IT and Labour Costs
Without proper software, IT teams must spend a lot of time and money on maintenance expenditures, and direct or indirect labour costs associated with new software acquisitions, updating current systems, adhering to licensing agreements, and training when dealing with disparate systems. Not to mention, these traditional methods for operating corporate systems frequently hinder scaling ability.
ERP solutions do away with the requirement for many departmental programs, which normally get more complex and expensive as a business grows. When you update, patch, or replace software and hardware systems, routine workflow interruptions are no longer necessary thanks to the use of ERP software.
Final Thoughts
The advantages of an ERP system to businesses are many, especially for manufacturing companies whose CEOs and CFOs are always striving to reduce inventory, save manufacturing costs, and boost overall effectiveness.
Having an ERP system in place to manage overall operations is crucial to surviving in the new economy of digital transformation. If you are ready to take action and need practical advice on the next steps, feel free to contact our experts for a free consultation.
