ERP: to invest or not invest, that is the question…
During the past Holiday period, right in the middle of your gift shopping, you no doubt took off an afternoon to do a little window shopping to see the latest models of ERP systems and their fabulous new functions—NOT!
Obviously, that is no way to look for a new management solution.
So, what makes companies that already have tools to manage their accounting and operations decide to invest time and money in an integrated ERP system?
Main reasons for changing management systems according to a 2014 survey of SMEs:
|1. Costs are growing faster than revenues:||47%|
|2. Existing systems do not properly support growth:||37%|
|3. A lack of timely information is slowing down decision making:||29%|
|4. Response times for customer requests are getting longer:||29%|
And typically, it takes a major event to trigger the process of searching for a new solution: the loss of a major customer, a large opportunity lost to a competitor, problems delivering customer orders or failure to make a profit from additional sales.
You may not be window shopping for ERP solutions, but are you going to wait for misfortune to fall before improving your systems and productivity? A small historical example:
In the 1990s and until the mid-2000s, the exchange rate for the Canadian dollar compared to the US dollar gave Canadian export firms a strong competitive edge. Everything was just fine in the best of all worlds—there was really no need to improve productivity with rates of 1.3:1 or even 1.5:1. But you already know what happened, there was a complete turnaround in the years that followed, and the Canadian dollar even fell below 1 US dollar in 2008 (totally unthinkable only a few years earlier!). Many companies had to close during those years (no doubt you know some of them) because they were simply no longer competitive in their key market.
How do you think a business today would be positioned, with an exchange rate back at 1.35:1, if that company had taken advantage of the good years to improve its productivity and enhance its management systems? It would probably still be in operation and ready to export again.
An integrated management system is definitely one of the tools available to companies to improve their productivity and remain competitive in today’s constantly changing markets.
Finally, let me add that ERP systems simplify your life. Hard to believe when considering the challenges involved in implementing a new system! Changing old practices is never easy because you have to step out of your comfort zone. But, having all the information about your company in a single integrated system will make life easier.
So, yes, as soon as you can, invest in ERP, now!