Johannesburg, 02 Dec 2010
As they grow, companies are increasingly relying more on processes, activities and systems to run their businesses. These include a number of manual and automated workflows and procedures, as well as a variety of departmental applications and legacy databases that are poorly integrated.
While this approach may have served its purpose in the past, Jeremy Waterman, managing director, Softline Accpac says at some point it can become cumbersome. He says in today's dynamic and highly competitive marketplace, it can dangerously impede productivity, profitability and growth.
“While every company faces its own unique challenges, at some point along the way most will experience problems such as slow production cycles, inefficient scheduling of resources, slow inventory turns and high carrying costs, uncontrolled purchasing procedures, and inefficient materials management.”
He says data inconsistency across multiple repositories, high overhead costs, poor on-time delivery rates, decreasing customer loyalty, delayed financial tracking and analysis, and limited strategic planning capabilities are other very common issues faced by companies.
Over time, experiencing any of these can negatively impact the bottom line and being subjected to several at the same time can paralyse the business and make it impossible to survive in today's competitive economy, according to Waterman. “With disparate systems hindering growth and profitability, companies will benefit from the ability of the ERP system to help define best practices, optimise activities and gain control over processes.” He says that one of the most significant benefits of ERP software is its ability to streamline operations.
“By automating business processes, which in turn improves accuracy of information and accelerates data flow, an ERP solution helps companies streamline day-to-day tasks and free up staff to focus on other more complex issues that require more personalised attention. As a result, productivity can increase and operating and overhead costs can be dramatically reduced.”
Waterman says ERP software uses a common repository for organising the data essential to the business. “It provides visibility to all the systems and processes and integrates them so all employees have access to the information they need, when they need it, to do their jobs more efficiently.”
According to Waterman, storing the company's information in one common database makes it easier to manage and share information.
“Consider that employees often use their own spreadsheets and databases to perform their jobs. As a result, other people in the organisation find it very difficult to get the information they need in a format they can use. By providing one single, unifying system, ERP creates a common 'language' throughout the company that simplifies the communication process and makes it easier to understand and share information.”
Furthermore, an ERP solution discredits the belief that efficiency needs to be considered one department at a time. Business processes and activities have become increasingly complex, requiring multiple teams and divisions to operate as a single, cohesive unit. Once the data is entered, the software automatically updates it throughout the system, ensuring the most up-to-date information is available in just a few clicks of the mouse to the employees who need it. Waterman believes that without an ERP solution in place, creating that kind of cross-departmental co-ordination and workflow execution can be very challenging.
ERP helps to streamline business processes as the more efficiency yields greater profitability, according to Waterman. “It consolidates disparate software, spreadsheets and data management tools into one integrated system that improves productivity and profitability by automating day-to-day processes and making it easier for employees at all levels to assess company performance and understand their impact on it. “In addition by providing information to employees in real-time, ERP eliminates the information-sharing bottleneck enabling people to do their jobs in less time and with fewer challenges.
A robust ERP system helps management make faster, better informed decisions by providing up-to-the minute reports across all business areas. He says that with more visibility into the production process, management can quickly identify problems in the business and take immediate corrective action. Additionally, they can now focus on strategic planning and be more responsive to a changing business environment, quickly adjusting strategies to address new customer needs as they emerge.
Moreover, an effective ERP solution is crucial to a company's reactivity because of its ability to manage the business across all departments in real-time. “Burdensome, error-prone, labour-intensive manual processes can consume both time and money. To be profitable and competitive, businesses must streamline operations across all departments, including automating critical, yet routine activities, as much as possible.”
Additionally, ERP helps companies become more efficient by providing a way to standardise work sequences throughout all processes. An ERP system with a Web-native platform can connect all business partners to your operations. Wherever they are located, each member of your staff can log on to the company's information system. Partners can gain remote access to certain functions round the clock. Many companies also operate locations globally. ERP enables them to document directions in multiple languages for employees and adapt procedures to local practices, and even for individual customers.
An ERP solution not only helps optimise a business, but improve productivity and profitability.
Jeremy Waterman is the managing director of Softline Accpac, which forms part of Softline - a member of Sage Group.
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