Costs to consider when thinking of a top ERP implementation – part 2 of 2
“Never has there been a better time to deploy an ERP solution than right now,” says Heinrich de Leeuw, Managing Director, Seidor Africa. “ERP software and services have improved dramatically in recent years. It is no longer an enormous expense, nor does it take ages to implement. The solution brings operational areas together to overcome the challenges that arise from lack of visibility, collaboration and co-ordination and the solutions are now priced for SMEs,” says De Leeuw.
The ERP solution can grow with the business and contains multiple modules, covering the needs of all departments in one solution.
How to evaluate the ROI of an ERP
“Like any investment, an ERP solution needs to have a good return on investment or ROI,” says De Leeuw.
Key ways to achieve ROI from an ERP implementation:
- Better forecasting: The ERP software is customisable to a level where all historic spend and sales are obtained with just a click. These reports give trends of company performance from the previous years and what the target for the current or coming years should be or what sales throughput would be needed to achieve current targets. These include purchase order analysis, inventory requirements, stock evaluation and stock on hand. These reports not only help keep the unwanted costs in check and prevent overstocking, but they also help find opportunities to manage inventory to be more effective and profitable and free up cashflow.
- Strategy building: Every company needs a solid strategy and the only thing that helps in building one is clear and concise reports. ERP systems provide the best way of arranging the data for better strategies and making more informed business decisions. They help the business to identify slow-moving items, dead inventory and usage value.
- Vendor identification: A business might be working with numerous vendors for the same type of purchase. Knowing the right type of vendor to work with greatly improves the chances of increasing profits. With an ERP solution, the business can extract supplier information such as delivery, quality, cost and more, making it easier to decide which vendor to go for first when a need arises.
There are also several intangible costs that affect ROI and profitability. These include higher efficiency, more productive time, improved security, better management, employee satisfaction, enhanced client retention and a better customer experience.
“Because SAP Business One extends business capabilities beyond the core management function, it enables managers to streamline business processes and deliver value. We’ve seen many of our clients improving their business efficiency by 20%,” concludes De Leeuw.