Many growing businesses have multiple software systems to support their business processes and requirements, with no or little integration between the systems. Think about when your business started. All you really needed was a financial system. Then, as your stock started growing, you added a stock control system. And then a warehousing system, a sales system, and so on. Eventually you find yourself inputting the same data repeatedly across multiple platforms in your business, which is both time consuming and subject to human error. This way of doing things also makes it very difficult to accurately report across the business.
“Using disparate systems requires various departments to work together to produce a financial management report,” says Pieter Lotz, Solution and Innovations director of Epic ERP. “This process is subject to a host of business risks as it requires accurate information to be compiled from a variety of sources. For example, if the information from your warehouse is wrong, it will affect the entire financial report and lead to dubious decisions. With a fully integrated ERP system controlling the different processes in your business it allows for accuracy across the different divisions which provide for accurate and credible reports.
This allows you to make better-informed decisions not only at month end, but during the month as things happen. An ERP system can help you to streamline administration across your business and give you a bird’s eye view of your entire operation, from sales to production to distribution to inventory. And you only have to input the data once!
Using an ERP system, every transaction will automatically pull through to your financials, rather than having to be copied and pasted. This results in improved accuracy, better reporting, quicker turnaround times and a more accurate view of what’s happening across your business – including inventory, cashflow, assets, etc.
Studies have found that ERP can reduce operational costs by 23% and most businesses (up to 95%) say they have seen major operational improvements after implementing an ERP system, which will directly impact the growth of any business.
The benefits of using a fully integrated ERP system include the single point of data capture, which saves time and mitigates the risk of human error. The ability to review receipts of stock that is received in the warehouse and matching it to the supplier invoices in the finance department is just one example.
One of the big draw cards of an ERP system is the improved visibility it provides, hence more control over what your business is doing. When you have more than one system running, you are continuously transferring data from the one to the other. For example, trying to control shrinkage at an item level is near impossible when multiple systems are in play. With an ERP system you can control shrinkage because you have better visibility and control.
An ERP system works at a granular level as well, allowing you to see profitability for a specific deal or on a specific item. It also helps with accuracy on your debtors’ book, giving you the ability to forecast your cashflow more easily.
Trustworthy figures mean the business is more favourably viewed by shareholders, which drives investor confidence and future investment prospects.
Lotz says one of the biggest challenges faced is change management.
“The implementation of an ERP system is not always easy as it’s tough getting people to change the way they think,” he says. “They need to see and understand the benefit of a completely integrated system to set their minds at ease.
“The benefits are indisputable, though. We have seen tangible results for all our clients with the implementation of ERP. Even during the implementation, questions will be asked that make people think differently. In most cases, companies start to implement processes due to the implementation of an ERP system. One client went from running month-end in 10 days to completing the process in three days, with improved accuracy and expanded reporting.”
The implementation of an integrated ERP system introduces efficiencies and cost saving allows business to re-allocate resource to be able to grow businesses.
“Installing an ERP system just makes sense on so many levels.”