A good Enterprise Resource Planning system (ERP) system always gives a business a competitive edge against competitors. This is because of the fact that it improves the efficiency of company employees and enhances the experience of customer. Many SMEs however never see the advantages of an ERP in Kenya because they believe that they can effectively manage their simple process in a few spreadsheets. On the ground, this is never the case. Problems start hitting the business when:
- End-of month financials become hard to reconcile
- You start making sales forecasts based on estimates rather than actual figures
- It becomes hard to maintain order volumes leading to customer dissatisfaction
- Reports take a long time to prepare and are generally poor
- Inventory becomes hectic to manage
- You run lots of separate software for different processes leading to high overhead cost
The list could be longer.
However, if you are facing such frustrations with your business, the only solution can be having an ERP system. These challenges point to the fact that your business has out-grown your current software or manual system, hence the need to look for an alternative way of managing everything in one place – ERP. The general purpose is to centralize all your business information into one database for easier access and visibility.
An ERP system can also be used by a variety of companies not limited to; manufacturing firms, retail businesses, government agencies, non-profit making and financial companies.
The following are some of the many benefits that an ERP offers:
- Provision of Up to date information for decisions
When different teams use separate systems in your business, it creates a loophole for inefficiency. The separate systems will take hours to maintain and reconcile. Getting information from the systems also requires a lot of time and energy. As a result decisions will be made based on outdated and inaccurate data.
An ERP system will integrate the separate systems across different business functions into a single database ensuring that the entire business has access to the same real-time data. The system eases data processing and improves the speed of decision making as well as ensuring optimal decisions at all times.
- Improved visibility
Another advantage of an ERP system is the improved visibility of how well your company is doing. With a manual system, finding key information about your business will take a longer time. For example you may want to know your sales margin or your orders per day. With a manual system this cannot be done instantly and may delay important decisions.
With an ERP system, the management can access top-line and detailed information on the business in a single click to help them come up with better policies to improve performance. Sales staff can access their customers’ payment or order history and can easily tell the company’s high-value customers. You can also tell whether you have the capacity to accept a rush order. On the other hand customers can be able to track the status of their orders through a customer portal.
- Faster and accurate reporting
Accurate reports are one of the most effective tools for every manager. An ERP system will automatically process transactions and generate audit trails and financial reports. They will detect and flag any variances making it easy to investigate and rectify. The system also simplifies repetitive data entries and other operations which make reports preparation tedious, time consuming and complex. This means that the accounting team will not spend many hours manually reconciling paper invoices and cheques.
- Enhanced customer satisfaction and retention
Imagine a situation where a customer calls and your customer service staff has to hang up to confirm something from colleagues in another department- shameful, right? You may even lose that customer. Customers like speedy and accurate information and only an ERP system can help your business in this. The customer care desk can be able to access certain information from the inventory, sales and account departments instantly. They can provide the customer with accurate delivery dates and order status keeping the customer happy at all times. Such good customer relations ensure customer retention and referrals.
- Reduced lead-time and increased throughput
Data uniformity and improved scheduling offered by an ERP system ensures that the focus us more on priorities resulting to shorter lead time. Your throughput will also increase because there will not be many orders waiting for tooling or parts.
- Well managed and controlled company costs
Running multiple software systems for different processes will lead to high maintenance costs because the IT becomes too complex and time-consuming. The company may be required to hire a full-time IT expert to offer maintenance and user support services. This can be very costly. With an ERP system you can run the business without hiring in-house IT personnel. To upgrade an ERP system is also much easier and cheaper.
The system will also calculate and collect your running costs making it easier for you to have a picture of the cost of production and your margins.
For more information about our ERP systems and implementation, please contact us and we shall gladly help; because that is what we do best.