How ERP Software Helps Streamline Processes
When a business first starts to evaluate software as a tool to help manage its processes, it makes sense to look at introductory solutions. Introductory software is designed to be the first system implemented in a business as an alternative to entirely manual processes. For most businesses, the first software purchase made is in order to manage the company’s accounting and financials, and in general, introductory software provides functionality to manage one specific aspect of a company’s operations. Introductory accounting software is frequently used in conjunction with manual processes or other simple business tools like Excel in order to manage inventory. Introductory software and manual processes work best when order volume is low.
As a business grows, and order volume increases, it becomes more and more difficult to manage processes with introductory software. Although each business will differ, there are a couple of good indicators that it’s time to start looking for more robust software:
- The business has reached transaction and data volume limits within its existing system. Many introductory software solutions have limitations on the number of transactions it can process, the volume of data that it can store and even the number of user licenses available. When a business operates above these limits it can result in system crashes, corrupt databases, slow run times and messy workarounds.
- The business requires additional functionality. Introductory software provides functionality to manage specific processes within one department as opposed to across departments. As a business grows, it will require additional functionality to handle previously manual tasks. Examples include functionality to manage inventory, customers and multiple sales channels such as eCommerce.
- Employees are performing a lot of manual tasks. When a business only has a small number of orders it can be fine to manage processes manually. However as the business grows, automating these tasks can save hours of manual work, even if it’s just a few seconds at a time.
- The business lacks tools for robust reporting. Although introductory software will provide access to some reports, it can be difficult to extract the information and see data in real-time. In addition, it does not allow a business to easily amalgamate information across functional areas to understand how the company is performing across departments.
If a business experiences any of the above, it is time to start looking for more advanced software. For many wholesale and distribution businesses specifically, a need for better inventory management as additional functionality is what prompts the search for a more robust system. Although in this situation a business can purchase additional inventory software to integrate with its current accounting solution, taking a piece-meal approach to software can lead to manual processes re-keying data between systems, resulting in extra work and more room for error. This, in turn, can lead to incorrect business information and data loss, which impacts customer satisfaction and hurts a company’s bottom line.
Instead, a true ERP solution will provide functionality for managing inventory, accounting, contact management, warehouse management and order entry and processing as an all-in-one solution. ERP streamlines processes across departments from beginning to end and will include additional functionality to meet the specific needs of each individual business. With ERP software, a company has the ability to:
- Receive inventory into its warehouse with barcode scanners
- Convert a quote into a sales order without having to go into multiple systems
- Create a purchase order for inventory items not available from within the sales order screen
- Create a sales order in which inventory is automatically allocated to that order
- Use verification scanning at packing stations to scan items picked and check against the sales order
- Track and monitor receivables with the ability to have automatic notices and updates sent out in order to shorten receivable cycle and increase cash flow
- Generate reports based on information pulled from different departments – for example, users can set up a report detailing information on product sold by sales rep by territory
- See notes kept on customers and suppliers from multiple screens and areas of the software
- Review sales orders from various sales channels in one screen
The above functionality is just a sampling of how ERP can help streamline operations. With an all-in-one solution, data is stored in a single database which makes it easy to quickly lookup and enter information in one system from a variety of departments. Training employees is simplified as users only need to learn one system interface and support done through the same vendor.
Posted on Thursday, December 22, 2016