Interest within a business in implementing a new or replacement ERP system usually starts with a need to address some operational difficulties—trouble in meeting production schedules, too much inventory, high costs, inability to meet competitor’s moves, shortcomings of the current system, or sometimes just a general desire to improve performance. Once this interest is recognized, a project team is established to set a budget, select a system, and put together an ROI justification.
ERP collects, manages and distributes information across functional boundaries and helps break down information “silos”—those barriers that stand in the way of full cooperation between production, materials, planning, engineering, finance and sales/marketing. The resulting higher quality, reduced time-to-market, shortened lead times, higher productivity and lowered costs can help improve customer service and increase sales and market share as well as margins.
ERP systems are built for the internet-enabled world with e-commerce capabilities and provision for integration and collaboration with supply chain partners, customer portals, and enhanced tracking of incoming material and outgoing product to extend the visibility and control. Measurements, analysis and simulation capabilities can help companies plan better and react sooner and more effectively to changes in demand, competitive actions, and supply chain disruptions.
ERP is truly enterprise-wide, and if implemented properly, can have astounding ROI across every functional area. Any company investing in any new tools or equipment will want to know that the investment will pay off—have sufficient return on investment (ROI) to justify the expenditure. And that’s certainly the case with an ERP system:
- Your finance team: Finally gains integration with operations, including accurate costing, and real-time reporting.
- Your engineering team: Eliminates the hand entering of part numbers and BOM’s through CAD integrations.
- Your manufacturing team: Has complete visibility and control of orders, materials, capacity and quality with a complete integration between planning and execution.
- Your customer service team: Can grow your customer base by quickly generating accurate quotes, custom-configuring products at the point of sale, assigning special pricing, and promising accurate delivery dates.
- Your supply chain team: Gains real-time communication with your partners and vendors to meld planning, scheduling, production and delivery into a seamless, dependable process.
- Your management team: Can eradicate reactive decision-making, and use real-time data to proactively manage the metrics that matter to your operation.
ERP software solutions automate and support a range of administrative and operational business processes, including line-of-business, customer-facing, administrative and asset management functions. Companies evaluating and comparing ERP solutions are typically upgrading a current system that is either homegrown, outgrown, or a poor fit. Their goals? To achieve IT and operational cost savings; tackle process gaps and inefficiencies with the help of a vendor or industry consultant; and reinvent the business in such a way that it makes room for innovation and improved customer service.