When I set out to write a post about the reasons to make the switch to an ERP, I researched what others were saying. After all, I didn’t want to just repeat what was already out there, even it is technically correct. No, we try to bring exceptional value that is above and beyond others in our industry.
(Not sure what ERP is? Check out this post and then come back)
So, in my research, I found over a dozen sites that had repurposed (plagiarized) the exact same content. They were all in the “Top X Signs You Need an ERP” family. I encourage you to look for those, but you only need to read one or two of the posts to get the gist. (Here, I’ve even made it easy for you – this link will open a Google search in a new window.) Go ahead and read those, we’ll be here when you get back and we’ll give you some new reasons why an ERP makes sense.
Welcome back! Thanks for trusting us to give a little more than our competition. Here are a few (real) reasons why you may need an ERP.
1. You’re on the verge of hiring another back office person, but…
You’ve been growing enough that your current back office staff are getting overwhelmed. Congratulations! That is a sure sign that you have been doing what’s right – making sales, getting the price right, delivering for your customers. But are you ready to invest 10’s of thousands of dollars to hire and train another back office staff member to do the same manual tasks as your staff have been doing for the last 5 years?
Consider automating some of the work. As you grow, and as the number of orders and customers grows, so will the complexity of managing those orders and that growth. Do your current staff spend a lot of time tracking down existing work, orders, status, and similar low-value information? If that information was at their fingertips, you would see the time they spend on tracking down information go down.
2. You really don’t have a good idea about how much your products cost
Product cost is more than how much you pay your vendors for the raw materials or inventory. You need to consider inbound shipping costs, duties, internal handling costs, manufacturing staff and equipment time, floor space for storage of raw materials and finished goods, and more. If you have more than a handful of products, allocating these direct and indirect costs to the finished goods cost is just guesswork.
An ERP can manage allocation of costs with a few clicks. As a few examples, monthly warehouse cost can be allocated across inventory, manufacturing time applied to finished goods cost, and import fees to the cost of imported inventory. Compare this to a manual method, where you have an accountant and a spreadsheet and time paid to an analyst – for every order or bill.
3. You want to start online sales, but have no way to manage inventory and orders
This reason only applies to companies that have a model that works for online sales. If this is you and you are not selling online yet, then please get started! You’ve read that buyers are shopping online more and more, with no end in sight. We’ve seen an upward trend of 20-somethings who have no experience calling vendors for quotes. That means that if you don’t have a strategy for getting online, you may see your share of the market begin to decline.
But getting online may mean you are working with more systems and need someone to manage your online store. You will need to keep inventory in sync between your back office and web storefront. Customers will want to see their order history across all channels (online, email, phone) so they can reorder. Bottom line: you will need to get your back office ready so you can jump to online sales. An ERP, integrated to an online store, can give you all that you need. And putting in the ERP first is essential for success.
Want to find out if an ERP is right for your business?
Captiva is a Microsoft partner and we work with Microsoft Dynamics. Dynamics is used by over 160,000 organizations worldwide. If you would like to find out more, visit our contact page to see how to get in touch with us.