It’s always astonishing to find how fast technology is changing our lives. Take Enterprise Resource Planning (ERP), for example. This business process management software removes inefficiencies in a business with astonishing speed and efficiency, incorporating cloud tech.
ERP works to integrate applications so that your entire business runs as smoothly as possible. It handles many back office functions associated with human resources, customer services, and IT. ERP software requirements vary across a wide range of industries, which includes retail, manufacturing and distribution, health care, and the financial sector.
7 Common Inefficiencies in Business Operations
How do you know if your organization needs ERP? The quick answer is if it consists of data silos that don’t integrate with each other and that cost time and money to run separately.
Here are 7 ways technological inefficiencies can be slowing your business down:
Inefficiency #1: You have different types of software systems working independently of each other.
Do you need different software to track and process the different information your organization has to process? For example, when salespeople takes a customer’s orders, do separate systems go to work to record, manage, and fulfill that order? Does accounting have its own system of recording that transaction? Does the warehouse have its own system for sending the order to the manufacturer, receiving it, and shipping it out to the customer?
Inefficiency #2: You find it difficult to get the information you need about your business because you have to go through different systems to access it.
If you have to write a report on sales performance for your board of directors, how long would it take to track down information related to time spent selling, the use of marketing collateral, the opportunity win rate, the average deal size, the sales cycle metrics, and the cost of sales to revenue ratio?
Furthermore, imagine if you have to glean this information from spreadsheets that have not been updated and still need to be reconciled. It could take you a long time to write that report.
Inefficiency #3: Your accounting department takes a long time to get accurate numbers because the need to manually key in the entries.
Accounting is a difficult discipline because it is a system of balancing many variables. It can become even more of a burden on employees in the accounting department who have to use paper invoices and sales orders to enter their figures into a variety of accounting or sales software. This is a tremendous amount of drudge work that ERP could do almost instantly.
Inefficiency #4: Your financial division takes ages to do their work.
If you don’t know your numbers, you have no idea how your business is doing. But what if your financial reporting system is slow and clunky?
It takes your staff a long time going over spreadsheets to consolidate their figures and reconcile any discrepancies.
They may even have to use several systems to get the information from several systems before they can create a composite picture of the company’s financial well-being.
With ERP, everything will be in a single database, which will put an end to endless hours rekeying figures, cross-posting information, or reconciling inconsistencies. ERP will allow you to get accurate reports with considerably less effort. You will be able to get the information you need without frustration.
Inefficiency #5: Your sales team does not know what products are available to sell or where the inventory is located.
One of the best ways to close a sale is to tell customers how soon they will receive their product. This can be difficult if salespeople have to wrestle with inventory management systems that have not been updated.
It’s hard to be persuasive when you don’t know how much of a product is still available for sale, in which warehouse it is located, and when it can be shipped out to the customer.
For selling to go smoothly sales has to be aware of inventory, and this can be difficult if records are all maintained separately.
Inefficiency #6: Your customer service ratings are plummeting because you are giving customers inaccurate information about when their orders will be shipped.
After customers order a product, the first thing they want to know is when they will get it. If the sales rep has to guess, chances are that he will create unrealistic expectations. The customer will perceive a delivery past the promised date as a delayed shipment.
Another awkward situation is when a popular product is sold and the sales division has no idea when stocks will be replenished. Meanwhile, customers keep calling the customer service department, who don’t know either because things are moving too fast to keep track of the flow of inventory.
When customers receive a bad experience, a company’s reputation begins to decline.
With ERP, sales, customer data, and inventory systems are all synched to work with each other.
Inefficiency #7: You have too much IT.
It can be difficult to keep up with IT if there are many systems running at the same time. Often these systems need different upgrades or patches, especially those that are non-cloud-based. Too many systems running at the same time can create too much complexity. This costs time, labor, and resources.
Your business is ready for a single instance ERP system if the current system has numerous pain points that prevent the business running efficiently.
