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5 signs your company is ready for a new ERP system

5 signs you're ready for a new ERP system

As your company evolves, the systems you use to facilitate operations will have to adapt. In the early stages of a business' growth, it's possible to get away with using spreadsheets or siloed software to manage each functional area of the business. But at a certain point, you'll find that these solutions are holding your business back from achieving operational excellence. Here are five signs that your company is at that inflection point where a new ERP system is a must:

1. You're violating the four hours rule

If it's taking you more than four hours to gather important figures, such as KPIs on incoming orders, pending orders, critical stock, margin per order or revenues per customer, then you're at a severe disadvantage. When it takes so long to generate actionable information, your managers will be forced to make big decisions based on intuition.

Additionally, the lack of real-time data means that you can't get a read on how your business is performing until the annual financial reports come out. How are you supposed to manage areas like marketing and sales if you don't know where you're going to end up when the quarter ends? If you can't generate reports for critical information in a timely fashion, it's time to adopt a system that frees up access to your business' data.

2. You're dependent on Excel

Excel is a great tool, but if you're relying on singular excel sheets and pivot tables across your departments - financial accounting, project management, time sheets, cash management and so on - then it's time to find a way to better integrate your value chain.

A good ERP system will bring all of those parts of the value chain together for a more streamlined operation.

Even with the proliferation of cloud-based tools, employees in different areas of the business often still work through local spreadsheets. A good ERP system will bring all of those parts of the value chain together for a more streamlined operation.

Spreadsheets Vs ERP

Spreadsheets are helpful, but as your business continues to grow, you'll need a more robust system to handle your operations.

3. You have a limited ability to reduce costs and increase profit

Say you want to reduce your costs or find a new way to boost margins - where would you start? Without full visibility into your value chain, your complete cost structure, timelines and critical dependencies, you would be making decisions based on intuition and guesswork.

If you're trying to grow your business, you need complete access to the data that drives and defines it. If you can't access it quickly, you must bring in an ERP system that can house your data and give you a real-time look into the inner workings of your operations.

4. You're causing frequent delays with delivery

Other than poor product quality, nothing annoys customers more than inconsistent delivery. If you're consistently missing delivery deadlines, it's a clear sign that your current systems aren't up to your business' challenges.

Without a solid integration of sales, your supply chain and production, you won't be agile enough to handle setbacks or changes without interrupting delivery. For example, if a critical component part wasn't automatically reordered, you won't realize it until you miss the shipment due to the lack of communication between departments and absence of up-to-the-minute information.

Additionally, without a means to track a customer order throughout the entire production process, you won't even be able to guarantee your customers' delivery dates in the first place. This is unacceptable in industries that rely on just-in-time delivery, such as automotive, aerospace and tech. An ERP system gives you the visibility and integration you need to meet strict delivery schedules and easily adapt to unexpected circumstances.

5. Your team rejects your current system

This is the most important sign that it's time to upgrade to a new ERP solution. If your employees don't really know why they have to use your current system, or it makes their job harder, chances are they're going to find a way to work around it.

If this is happening, the problem is that your ERP system and your business are still in two different worlds. Ideally, there should be no separation between your business and the systems on which it runs, so look for an ERP solution that can grow and change with you.

Help grow your ERP knowledge with our new e-Book: Unbounded Manufacturing, for even more information. If you have any questions, please feel free to contact an abas representative today.

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