Using the correct method to forecast, report and plan is crucial to any business. We would challenge you to find someone that will state they do not need to use spreadsheets for their business, in fact you will find that almost everyone will say spreadsheets have their limit but we still need them to function.
So where do ERP solutions come into play for a business and when is it correct to invest in ERP – it’s a big question?
The quick answer is when a business has the actions below but no system to support maybe the conversation around ERP is needed:
- Multiple data sources in different locations coming from different people/departments
- You need all the data as one source to aid your planning process
- Real time data against historic data creating effective business decisions
- A Complex Supply Chain
- Market place demand which leads to variability i.e. costs not actual when changes are made
- What If scenarios can not be achieved
- IT department resources are limited
- Multiple people and departments need to access the same information at the same time
- The businesses KPI’s need improvement i.e margin, revenue and inventory
Below we discuss Spreadsheets v’s ERP Solutions for businesses in a little more detail in an comparison table so – Let’s compare in detail:
|Unique Business Needs||Configurable (limited)||Customisable||Better solution fit to meet business objectives|
|Integration||Stand alone with possible sync across some systems with back end database||Integrated key business systems||Data exchange between roles and departments. Reduced admin and data redundancy. Less vendor management|
|Data Redundancy||Client data replicated across each system||Eliminated. One set of data presented in various formats depending on role||Each role view of the data is current and correct. Huge reduction in data cleansing|
|Maintenance||Complexity increases with business growth||Maintaining one ERP system data regardless of size of business||Lower IT system maintenance costs – Contract with one vendor|
|IT Support||Internal IT resources required with knowledge of each system||Blend of provider and internal resources managing one system||Reduce internal IT resource required – reduce costs|
|Inter-departmental Visibility||Poor or non-existent||Inherent & real-time||Improved holistic business intelligence due to the ability to view real-time data across departments|
|KPI Visibility||Need to access each system separately – reports based on data at an historic point in time||Dashboard views of real-time data based on role and business requirement||Dramatic improvement in management’s ability to monitor business performance with one dashboard view presenting in real-time|
|Administration||High – admin across multiple systems and pooled reports||Low to medium||Reduced administration time for staff as less systems to maintain data in|
|Process Workflows Across Departments||None or poor if any||Customisable with triggers and expection reports||Required actions triggered on time and to completion across multi-functional teamsImproved customers service and retention|
|Inventory Costs||Higher – based on historic patterns and/or subjective opinion||Lower – based on real-time order data and real-time trends||Reduced inventory and warehouse management costs|
|Forecasting||Difficulty as reports required from unlinked systems and based on historic data||Real-time data across multiple functional processes from one system i.e. inventory management based on actual and projected sales orders||Improved ability to accurately forecast in shorter time frame in real-time – improved planning and ability of business to react to exceptional events|
|Costing||Simplistic view of costings ignoring time and internal labour factors||Track actual costs of activities and perform activity based costing||Improved understanding of cost of conducting business, based on data consolidated across production or supply chain elements|
|Customer Service||Departments view only their role related data||Customer service reps have improved access to client related data across multiple functional areas.||Improved customers service, retention and business decisions|
|Compliance & Best Practice||Non-existent or difficult to implement||Solution can be developed for compliance and industry vertical best practice||Improved compliance across different jurisdictions and processes improved based on industry vertical best practice|
|Adaptability||Difficult as changes required across multiple systems often with unanticipated downstream impacts||Business processes implemented in one core system – changes in one area of the system will then show the impacts downstream||Easy to adapt, adopt and restructure|
|Scalability||Performance and usability decreases with increased size||Structured & modular design with add-ons||Scalable solution in line with increases in business growth and/or complexity|
|Global Outreach||Limited or costly||Optional modules, and available in multi-languages||Better system fit for business operating or servicing customers in multiple jurisdictions|
|E-Commerce||Limited if any functionality||Optional module||Front end to back end integration, which provides streamlined processes|
So in summary, if the answer to the following questions result in a YES, then it is time for your business to look for an ERP solution:
Q: Would the time spent in spreadsheets be more effectively spent with tools inside an ERP solution? (Save resource and revenue)
Q: Do you require real time reporting that allows for growth, business planning, forecasting, cost management and resourcing effectively?
Q: If your business is across multiple sites – do you need more control and visibility?
Q: Is collaboration a key component if improved will benefit many functions within your business?