5 ways to reduce costs with an ERP
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There are many reasons to implement a new ERP. Any effort made to obtain maximum efficiency in operational processes is worthwhile.
For this reason, Datisa’s experts offer SMEs some very simple recommendations to reduce costs and save money thanks to the use of an ERP.
Reduce costs with ERP
These are the recommendations:
- Less overtime. An obvious way to save money is by reducing overtime which is an unplanned cost and reduces the profit margin of your products/services. Better planning and visibility of demand helps reduce overtime. And it will provide detailed information on when and how to increase or decrease resources. The most functional ERP systems on the market provide real-time demand visibility as well as clear information on available capacity.
- Administration costs at bay. Why spend more time than necessary on administrative activities? Using an ERP should help, precisely, to minimize the time and, therefore, the cost associated with administrative tasks. The Datisa consultants’ recommendation is to identify data duplication, unnecessary spreadsheets or slow and repetitive processes and eliminate them. Most of the “backlog” of administrative tasks occurs because you have not decided how to proceed to reduce administrative management as the ERP implementation is rolled out. Another advantage of integrating administrative management with the ERP is the reduction of human errors. Failures that can lead to significant costs for the organization.
These are the 5 ways to reduce costs with an ERP
- Production costs down. Using ERP data on the duration of production or marketing cycles is also key to reducing costs. This information will help make decisions aimed at improving production, distribution, marketing, etc. Also, comparing estimated cycle times to actual data helps define the right direction. This comparison and derived analysis focuses decision making and prioritization of improvement initiatives.
- Stores that give money. Money saved on materials and storage is money saved directly. You can save money by making better purchasing decisions, by having more accurate information. Leveraging offcuts and effective inventory management are also important factors. An ERP system helps to achieve this. Having a good stock search system and simplifying purchase requests are essential features of ERP.
- Strategic projects at the head. Eliminate the burden of mundane work, allowing you to focus on high-performance tasks. That is, when administrative tasks are eliminated, for example, time and energy can be redirected to more weighty functions for the business. What functions?
- Collaboration with the supply chain to reduce costs
- Design and implementation of new marketing campaigns, aimed at accelerating sales
- Sales team training
- Innovation and development. New strategic initiatives to boost business growth: new lines of products/services, introduction to new markets, implementation of technology in specific areas, etc.
Ultimately, can an ERP system help SMEs save money? The answer is yes. As long as it is used properly, maximizing the potential of the tool.