A while back we wrote a blog on the three most important
things for a CEO when looking for an ERP solution; Agility, Profitability and
Responsiveness. We touched on agility, let’s look at profitability.
What is profitability?
Okay so plainly put, profitability is bringing in more money or value than it cost to make the
goods or provide the service. Obviously, your income must be
higher than your expenses.
Needless to say (but we will, anyway), this is the driving
force for all for-profit companies worldwide. When profits are the only thing
that will ensure your company’s survival, it is essential to have the right
resources, being human or otherwise (alien?) within your business.
But what influences profitability?
Going about looking for the right ERP system
The heads of departments within your business should be a
part of the decision making process when choosing an ERP system. Different
views will give you a broader understanding of how to go about looking for that
ideal ERP system. Let’s face it, your employees should approve on this system,
they are in essence the people that will be working on that system.
A lot of aspects should be considered when choosing the
right ERP system for your business. I’m going to keep it sweet and short and
give only three examples of what I think should be the most important when
choosing your ERP system
Return on investment
So, a lot of money has been spent on your ERP system and
everybody is happy and confident in the system. But can this system be used to
win back some of your money that you have spent on it? An ERP system should be
able to generate time phased plans that can define when money will be needed
and what this money will be needed for.
Seizing new opportunities
It is crucial for businesses to always seek out new
prospects and business opportunities. This is where the proper ERP system will
play a very important role. The ideal ERP system should include a CRM system
that is ideal for marketing purposes. This system allows the user to generate
different marketing campaigns. This will assist in researching the market and
realizing what need there is for a specific product. If you are able to provide
different products to different clients, new opportunities can be easily
generated.
Activating different functions
When starting a business you might only need an accounting
package for year 1. As your business grows, you will need a manufacturing
package as well. So you will scrap the first system and buy a completely new
one. After year 3, for instance would you maybe require a system with
manufacturing capabilities as well, so again the previous system would be scrapped
and a whole new system implemented. This can turn into a vicious cycle where
every so often a new system needs to be implemented. A lot of money can be
wasted and you could have been able to retire after year 3 or 4. Look for a
system where all these functions are included, but not necessarily activated.
You can activate these functions as you see fit. Having this choice will save you
a considerable amount of money in the long run.
You and your perfect ERP system
The perfect ERP system depends on your own specific needs
and preferences. There are a lot of ERP’s out there. The secret is to do your
research and get your employees involved. The key to your business’ success is
all up to you and the right ERP system.
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