ERP: A powerful tool against the crisis

Economic crisis is a poor business advisor, as the first instinctive reaction of every business -when faced with “trouble”- is to cut expenses. Unfortunately, cutting down on expenses is not enough to have the desired results. Thus, executives tend to make bad-judgement calls turning into unwanted business results. The solution to this problem is investing in the right software that will help you make the right decisions in terms of cost mitigation and operational optimization. This will not only help your business stay afloat during times of economic hardship, but it will also enable you get ahead of competition.

This is exactly what a properly selected ERP system does. It improves operational effectiveness and employee productivity. In a nutshell, it is the fine line between mere survival and development. But, let us see how exactly an ERP system can help your business through these difficult times.

Having available stock in your warehouse costs money. But equally -if not more- expensive can be the exact opposite. Inventory management enables you to have a clear picture of your excess stock cost, at any given time, in comparison to the cost of the products that meet the actual demand. With an ERP solution, you can eliminate waste related to inventory, transport, storage and production, while effectively supervising the entire production chain.

On the other hand, given the financial restrictions, knowing your exact cash-flow is a matter of critical importance. It is vital to know how much money you have in the bank, how much money is available for immediate use, what your expected revenue is and when such amounts will be collected, as well as which resources are about to be exhausted and when. An ERP solution effectively manages cash-flows, helping you avoid bad choices and remain competitive.

Another area where ERP systems excel is that of communication with the “outside world”. This actually refers to automated transactions and less duplication errors, which can prove quite expensive if not rectified, while also adversely affect your business image. For example, you can easily streamline sales orders entry and provide your customers with the required confirmation with the EDI (Electronic Data Interchange) method. For other transactions with your providers, the system will use your business goals to set certain rules that will ensure the unobstructed completion of your business transactions with the “outside world”. As a result, you get even fewer errors and improved results.

So, we may not be able to avoid the financial crisis, but we certainly do have the ability to better “fortify” our businesses by making the right choices.