Three Reasons Why Businesses Would Fail Without An ERP System

Posted on Sep 10 2013 - 12:09am by Kinga

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Enterprise research planning (ERP) is business software that is working to streamline resources including manpower and materials. Looking at it in other words, ERP works to make sure every part of a business is on the same page. ERP combines many different areas of a business into a single program which allows everyone to get up-to-date information as needed. The key to using an ERP system correctly is putting the information correctly into the system, if this happens ERP systems can vastly improve a business. Many businesses that fail and struggle do not have an ERP system; if the management of these businesses had invested in an ERP system they could still be in business and many of their problems would be alleviated. 79% of businesses that implemented an ERP system saw improvements in business processes, according to Panorama Consulting. However, Microsoft Dynamics AX provides businesses with a solution to improve all types of businesses.

Lack of Visibility

One of the benefits of an enterprise research planning system is that a business becomes centralized. This works to improve visibility in inventory and future deliveries. Having this information allows businesses to move around workers where and when they see fit and do not have to guess when they will be needed. Knowing about inventory can also allow management to pursue opportunities that they may have not known about with the operating system. Having more visibility is important for larger business with offices in many different areas or even different countries. Businesses that do not haven ERP system tend to have problems tracking inventory and communicating with vendors, which could be alleviated with an ERP system. Panorama Consulting said 28% of businesses that implemented an ERP system were to improve employee communication.

High Operating Costs

Businesses everywhere are always looking for ways to reduce costs and save money. An ERP system reduces with results showing very quickly. The system lowers inventory costs, operating costs, and marketing costs. The system lowers these costs by not duplicating information but having many similar procedures that businesses are used to, which goes back to the idea of centralization.

With a more centralized system, time and energy can be focused elsewhere in the business instead of gathering and relaying it to the other parts of the business. A key department that can always be improved is customer service. Businesses that struggle often have problems with customer service. An ERP system frees up employees to work with customers and find products that better fit their needs; this relationship will keep customers coming back to your business.

Managerial problems

For a business to have continued success they need to have strong and intelligent leaders at the top. To be successful, managers need to have the most up-to-date information at their fingertips. With the centralized nature of an ERP system this is possible for businesses, which allows management to better utilize their resources. They can also plan ahead for future problems based on the data that they have. If management sees a problem they can check the information found in the system and then act based on the detailed information found in the ERP system. For businesses that do not have an ERP system predicting future problems is much more difficult as is acting in the present without up-to-date information. Businesses that struggle and go under tend to underutilize the resources that they have.

A solution

An ERP system that works well for those who have implemented it is Microsoft Dynamics AX due to its ability to adapt to the changing nature of business. Microsoft Dynamics AX allows businesses to enter new geographies and new staff, as well allowing you to pursue new opportunities.

This system allows businesses to gather information and interpret it quickly reducing time wasted from many other operating systems. Microsoft Dynamics AX allows management to predict future plans well in advance as well as keeping an eye on all parts of the business.

ERP systems are critical for businesses of all kinds. Three of the problems that struggling businesses fight with are lack of visibility, high operating costs, and management indecisions; with the help of Microsoft Dynamics AX many businesses can be greatly improved.

Photo Credit: Flickr/Dominic Alves

About the Author

This guest post was written by Kinga, who is working for Cognitive Group a Microsoft Dynamics AX recruitment agency in the UK.