Header Ads

THE BENEFITS OF IMPLEMENTING ERP


COST VERSUS BENEFIT
ERP implementation projects require significant investment in terms of both time and resources. Here we list some of the benefits commonly cited by organizations when contemplating an ERP implementation project. In addition to financial benefits, we discuss some of the other benefits that may be realized.
FINANCIAL BENEFITS
The cost of a new ERP system needs to be balanced against the positive financial impact that the new ERP system is expected to deliver. Whilst every implementation is different, the fiscal benefits could include:
Increased revenue 
For example, improved planning tools can lead to an increase in product/service availability. Additional functionality may also be the sales team be more effective e.g. use of CRM, improved ability to cross-sell
Reduced costs  
Your existing ERP may be expensive to maintain in a robust manner; there may be the opportunity for the elimination/automation of non-value-added tasks within the organization translating into a direct cost saving in labor; you may be able to better control spends on materials
Reduction in working capital 
Improved visibility of supply/demand may allow the business to reduce the amount of cash tied up in inventory; better functionality for managing credit status can improve cash collection processes and reduce debtor days
Whilst it’s tempting to set aggressive targets for these gains to show the project in a favorable light, it is important to ensure that these expectations are realistic – these will be the measures on which the overall success of the project is determined. A clear understanding of benefits can also, help manage the business change that will come about because of the ERP implementation.
OTHER BENEFITS
ERP implementation presents the opportunity to realize gains that may not be measurable financially such as:
Standardized business processes 
Using the same processes across several locations enables reporting like-with-like. ‘Good practice’ can also be shared across the organisation.
Improved customer response
An enhanced ability to access information from within the new ERP system will provide a better service to both internal and external customers
Aligned to the strategic plans for the business 
You can ensure that your processes are “future proof” and able to support the long term aims of the business.
Improved organizational transparency 
Removing ambiguity from processes about role and responsibility can drive accountability across the organization

By combining these benefits with the expected financial benefits, the organization is well placed to judge whether the investment in the ERP the implementation project is justified.
Write to us: AdempiereME@gmail.com

Powered by Blogger.