ERP systems have been around for several decades, helping companies of all shapes and sizes to maximize operational efficiency, cut overhead costs, and compete more effectively.
But, an ERP system can be particularly beneficial for a mid-market company, giving it the tools it needs to transform the back office into a “well-oiled machine” by streamlining and linking core processes across multiple departments and business units and facilitating company-wide collaboration and information sharing. With an ERP system, a mid-sized company has the power to significantly improve its end-to-end operations – from planning and execution, through management and control.
What kind of value can mid-sized businesses derive from today’s popular ERP systems?
ERP systems automate the routine, frequently-repeated manual tasks that waste staff time and often result in errors and re-work. As a result, they enable more efficient completion of day-to-day activities, so staff can perform their jobs better and get more work done in a shorter period of time. Additionally, with an ERP system, companies can understand which workflows are effective and which ones aren’t, so they can implement the kind of best practices and structured, formalized processes that will further improve staff productivity.
Many companies are plagued by fragmented, disjointed, and redundant processes across the various departments within their business, such as accounting and finance, human resources, production, and fulfillment and distribution. In businesses like these, each division stands alone as an “island,” limited in their ability to coordinate activities, share information, and collaborate with other groups across the company.
Because ERP systems consist of a suite of tightly-linked departmental applications, they eliminate the lack of system integration that hinders cross-function process coordination. So multi-department workflows can be seamlessly mapped out, planned, and executed.
The information silos that exist within many businesses – including data that resides in departmental databases, spreadsheets that sit on worker desktops, etc. – can make it extremely difficult to effectively manage corporate performance and assess financial status and profitability. As a result, these companies suffer from “multiple versions of the truth,” which can not only create confusion among staff, it can put them at risk for non-compliance.
An ERP system creates a single, consolidated, centralized repository of timely, accurate business information that can be accessed by employees across the business. Every piece of data from every transaction conducted by every person in every department is handled, recorded, and managed by a single system, eliminating all disparities and errors in critical business information.
Wasted time and resources equal wasted money. To achieve and maintain a competitive edge and maximize profitability, companies must operate as “lean” as possible. By increasing efficiency and minimizing redundant and overlapping back office tasks and activities, ERP systems can also help mid-sized firms to dramatically reduce their operating costs.
Companies without an ERP system in place are often challenged to create formal goals and metrics and to accurately measure and assess performance company-wide. Many ERP systems on the market include pre-defined reports, KPIs, and executive dashboards that enhance strategic planning by making it easier to set objectives and monitor achievement.