ERP or Enterprise Resource Planning is the merging of all the varied processes of a business under one automated system. This is done in real-time with the help of advanced software systems and end-to-end digitization of all the processes involved.
ERP systems, by standardizing and automating the processes, smoothen the workflow, improving efficiency, and thereby reducing costs in all areas. In fact, cost savings was the original value proposition of ERP systems when they were first introduced in the manufacturing industry. Nowadays, there are ERP systems for every type of organization, and some of them, what we can call, common, cost savings are:
Implementation costs - this may seem counterintuitive, aren't these systems supposed to be costly to implement. Though the actual cost may vary from business to business, a properly implemented ERP system will, in the long term, not only pay from itself but also, lead to even longer-term savings.
Greatly reduce labor costs - it has been found that ERP systems reduce labor costs by around 20 percent, by optimizing employee management. During initial implementation, all the work processes are analyzed, then unnecessary tasks are eliminated and the staff moved to where they are needed; all staff information is under one system, which improves payroll management greatly, and this leads to our next point;
Reduce administrative costs - by merging all administrative activities under one platform, the duplication of work and wastage of time is all but eliminated. And, over a long period of time, leads to substantial cost savings.
Substantial reduction in training costs - in every industry, the cost of training new employees or retraining old employees in new systems, can be very expensive. ERP systems, being digital and integrated into nature, can very easily make this process very simple and cost-effective. Being digital means, the training material can be accessed, literally from anywhere and anytime, a great cost reduction.
Inventory/material costs - ERP systems being fully integrated, can allow a business to follow a “just-in-time” method of inventory/material management, where whatever is needed is supplied or purchased only when it becomes necessary, thus reducing storage and management costs.
One can therefore safely say that, in the long term, well-built ERP systems save money. If you are in the market for such a system then Big Bold Brands is just the place to be. Our talented and experienced team can put in place an ERP system built exactly to your needs.