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The True Value of ERP

When a business utilizes enterprise resource planning (ERP) software they usually do so to interject efficiency, clarity, and a smarter way of working into their environment. In today’s competitive business world, a company needs to also learn to unlock the true value of their ERP platform in order to build competitiveness and continue to grow.

ERP started as a transaction-based tool designed for integration and the automation of back office processes, but it has now evolved to being the backbone of successful organizations. It is now more important than ever for a business to make a decision right the first time and that is not possible without the ERP providing access to the right information, in the right way, at the right time.

The new versions of ERP software are now incorporating social and mobile applications, in addition to the traditional benefits gained from the process efficiency and the adoption of best practices. ERP is now enabling and enhancing decision making and collaboration across the extended supply chain. Organizations that embrace these new technologies and ways of communicating will become more agile and competitive in the marketplace.

One of the factors that should influence an organizations decision when deciding whether it’s time for an upgrade is not just what functionality their current version is lacking, but also what innovations the new versions of software have. With every software release, ERP vendors must re-define what ERP is or should be and how it meets the need of the business now and in the future. They must keep up with innovation and drive incremental advances to solutions or risk market share.

The implementation of an ERP system alone is not sufficient to reap the common benefits, let alone the sophisticated characteristics of the system. The true value of the system lies in the processes created around the new system. Best practices must be established to utilize the ERP system effectively, as well as the proper training of the people using the system. The real value of an ERP system is whether or not employees accept the change in practice during the daily operations in the work place. If employees fail to adapt to the change, the value of the ERP will be lost.

When you spend thousands of dollars on an ERP system, it is not only important to understand the benefits of the system, but also the potential roadblocks in maximizing its efficiency. A system is only as good as the users allow it to be. You can almost guarantee that if you are not implementing the most recent tools and also using them properly, your competition is gaining the competitive advantage.