When is an ERP system worthwhile?
The ERP industry has become a multi-billion dollar industry in recent years and continues to rapidly grow at significant rates. It’s estimated that by 2030 the ERP market will be worth a massive 124 billion dollars. Whereas the systems have only mainly been feasible for large corporations in previous years, they are now being used more and more by medium-sized and smaller companies to become more efficient. How? Well, an ERP System provides organisations with an all-encompassing united data set-up. With an uptake increase from companies choosing to implement an ERP system, the question comes of when it is really necessary and is your company in need of one?
Organisations choose to implement ERP systems for a multitude of reasons – to centralise and manage their data, manage their operations more efficiently, and also keeping track of distribution more easily etc. Of course, whilst reasons will differ from industry to industry it may be the case that not every organisation can justify implementing an ERP. What organisations must do in order to determine whether they require an ERP system therefore is to take into account what aspects of business operations could be improved.
Signs To Look Out For:
Firstly, a quick and easy way to see if you require an ERP system is to check if current information storage is muddled and disjointed, meaning that access to data is slow and limited. An ERP system can (and will) fix this issue as one of its main benefits is to manage and sort unorganised data storage systems.
Another reason may be due to current systems being too dated, slow and on the way to becoming obsolete. Outdated systems may no longer be supported by vendors or new operating systems and therefore companies would need to update to a new, up to date ERP system just in order to operate.
Thirdly, the reason for needing an ERP system could be a personnel or team issue. If members of the organisation are not able to make decisions informed decisions quickly enough it can negatively affect sales as well as customer satisfaction. An ERP can streamline business processes to avoid the negative impacts of slow decision making.
There is no one right answer for each company as to when an ERP system becomes worthwhile. Ultimately it comes down to when you decide what is more beneficial and efficient to your business, staying with old system and multiple different systems even if there are issues and they become outdated? Or implementing a new ERP system?
Cost obviously plays a big role in the decision making process and up-front costs of implementations can seem daunting on the surface, therefore it is just a case of what is more valuable to you the company whether you choose to go forward with ERP. That said, if your business has encountered any of the aforementioned problems, or ones similar then it may be time to go for it.