3  Critical Indicators That Your Organization Needs an ERP System

ERP systems hold data for all departments and improve their daily cooperation. This can improve many of the company’s business affairs. Marketing then becomes centered as a result of information sharing between the sales and research departments. You will also be more efficient in the allocation of employees in an organization due to optimal integration between HR and the rest of the managerial backbone and other examples.

This post is for those sharp managers that notice when something is not working quite right, the business is not fluid, and things are simply faltering. This might indicate that there is a need for rocking the ship. Maybe by renewing the interface people work on, and implementing a new, more dynamic system like an ERP. Managing changes is quite a complex task though. If you are a manager and you are considering the possibility of acquiring an ERP system company, here is your sales-pitch for the board of directors.

Foot Dragging, Stagnation

You see it in courts, in government offices, in the DMV (oh boy the DMV.. *sigh*), sometimes an organization just loses its momentum. In the private sector this can lead to a reduction in product quality, or simply a drop in brand prestige, popularity, and business relations.

The situation can be the consequence of organizational stagnation. More simply this means that employees are too accustomed to their professional status and the day-to-day routine has become too comfortable to them in those situations when the employee lowers the entire organization suffers. It is as though people are driven only by the subtle force of inertia. Important processes are then delayed due to departmental Foot-Dragging which could lead to catastrophic business results. An ERP system helps track down phenomenon like the above and neutralize it. It can also give the managers ways to analyze it thoroughly and identify what is causing it.

 

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 General Drop in Morale

This could be the result of employees feeling left out, ignored and insignificant to the company. It has been said more than once that feedback is important for workers. Good feedback can create higher motivation in workers and raise their productivity.

ERP systems create better collaboration within all different departments of business. Beyond that the management backbone now holds data on all departments and can use it to better analyze what is wrong and where, and take care of all assets and resources including that major one; human resource.

Better social and work connections, critical good and bad feedback, and the ability to track down “bad seeds” are all easier with an ERP system. I have even heard of several companies that use their ERP functions as an internal chat program, which creates a perfect integration of all different workers in different departments. This improves the social value and the general atmosphere within the office.

Let’s Call it ROI & ROI-Yes

Finally, most crucial of all is MONEY. Let’s call it ROI & ROI-yes, your eyes are working just fine, yes, I wrote ROI twice, and no, I haven’t lost my mind-these are two different ROI’s. The first one is of course-return of investment. Investments are usually referred to assets-like merchandise, meaning products of some kind, materials and goods, but, as I mentioned earlier, people are assets too.

ROI is basically a formula that measures profitability of a transaction, a deal, or a big move within the company-such as acquiring a new ERP system. The formula takes the profit from a deal and divides it by the total amount of money invested. In this case, resources like time, man-power, and future improvement in the work-space are hard to measure. In my eyes, ERP’s makes the employee workday a bit more intuitive and easy, therefore making it an investment worth making. The second ROI is reducing of income. When business begins to slow down, and income drops, a full inspection often shows that lack of coordination inside the organization as the main cause. Preventing that by offering the purchase of a new ERP might worth your while. Introducing the board to the fact that ERP is helpful, even with its expensive implementation process and staff training, might become less difficult when mentioning that fact.

It has been widely established among the business sector that ERP systems better utilize the job landscape, offers better communication within the organization, and optimize the company’s functions, raising performance to its full potential. So, if you read this, and you think to yourself “hum… well, I guess things could be a bit more organized and efficient around here” – implementing a new ERP system and training the work staff to use it might improve your company’s stats sooner than you can imagine.

Marissa Hart
Marissa Hart is the Lead Author & Editor of ERPeople. ERPeople is a blog focused on all Enterprise Resource Planning business management platforms. ERP can be used by a company to collect, store, manage, and interpret data from many business activities, including: Product planning, cost, manufacturing or service delivery, marketing, and sales.
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