As more and more companies turn to ERP systems to take advantage of the benefits they offer, there are fewer and fewer reasons to postpone the decision for taking the leap forward. Unfortunately, some companies still try to postpone moving forward and the common reason we encounter is that many companies hesitate to alter their current processes because they are engaged in extreme demand, growth or an upswing in business. During these periods, the prospect of an ERP transition seems inconvenient or disruptive.
However, this could not be further from the truth. In fact, most companies that are industry leaders in similar situations consider ERP updating or upgrading services immediately. Study after study has shown that the benefits vastly outweigh the inconvenience of implementing new services, and companies often find that hesitating to make the jump has disastrous results. Below, we'll explore some of the risks lagging companies encounter during busy periods.
1. Problems Only Worsen
Unfortunately, many businesses fall into the trap of thinking high-demand periods are just temporary spurts. In reality, the majority of businesses with an effective sales model will and can generate expansive growth for extended periods of time-- while this may not be a linear correlation, the trend will develop significantly upward. This means that any neglected processes or unsolved problems currently happening are unlikely to disappear with enough waiting. Worse, many problems are compounded as your business grows; what may be an inconvenience now can quickly become a disaster as the scope of the effects magnify alongside the growth of the enterprise.
2. Mistakes Multiply
Employee productivity increases with the proper use of ERP tools; this means not only better production, but reduction in the risk of repeated mistakes with less equipped employees or outdated legacy systems. Particularly for operations with multiple locations, a lack of modern ERP system can mean wildly varying quality standards and methods across locations. Waiting to move forward with an ERP system because you’re busy only means that the mistakes that you were making before or going to be astronomically higher now. A proper ERP will streamline total business operations, and ensures standardized systems across any number of facilities.
3. Profit Decreases
A properly implemented ERP often provides an immediate increase in working capital. Beyond this, ERP offers substantially better financial analysis capabilities, improving transparency, standardizing reporting systems, and keener insight into an company’s cashflow. Reluctance to re-evaluate your current systems can often mean waste, inefficiency, and damage to profits otherwise avoidable through more developed systems. Particularly for small to medium size businesses, it is also important to remember that implementing a new ERP system is relatively painless compared to a larger-scale operation. Unless a company wants to continue profiting less even while their demand increases, there is little reason to postpone a shift that maximizes productivity immediately at a fraction of the cost and difficulty of later implementation.
4. Customer Satisfaction Declines
Better equipped staff, higher productivity, reduced waste, and comprehensive analysis tools means happier customers. Employees utilizing modern ERP systems are better prepared to meet customer expectations, and even with an increase in sales, they can still produce a better product at a reduced labor cost as employees utilizing outdated or underdeveloped system. A reduction of unnecessary expenses, man power and improved financial tools means you know exactly what services are cost-effective, and how best to utilize the savings. While this can mean improved profits, it just as easily can be used to lower costs, maximize quality, and in general guarantee products and services that are highly competitive. This means happier customers, and better retention than running the risk of sticking to old systems.
As you've seen above, the vast majority of organizations can benefit from an immediate upgrade from their outdated or inefficient systems. It is vital that companies considering ERP services not fall into the trap of postponing the decision—especially since, the benefits are immediate, costs reduced, and the risks of putting off the switch (discussed above) can be almost entirely avoided with immediate action. If you'd like to know more about how an ERP system can make your business smarter now, contact us at ABIS, Inc.