What’s the first thing that comes to mind when you hear the words “ROI” and “ERP systems”? Do you automatically think of how much money you’re saving because you’ve implemented an ERP system, or how much you’ve profited as a result of this technology?
If you answered “yes” to the questions above, you’re not alone. It’s not uncommon to measure an ERP system’s ROI strictly on financial terms. However, it’s not the only way to think about ROI. Read on to learn about how a non-financial benefit (having a single version of truth) is an advantage for your company.
In the business world, time is money. Yet, it’s always a surprise how many companies pay lip service to this time-honored maxim. They utilize inefficient processes, such as using more than one version of the truth.
How many places have you worked at where more than one person in a department kept a spreadsheet or other documentation, and it resulted in confusion, bickering, and higher costs because everyone believed their numbers or figures were the single version of the truth? Unfortunately, it’s more common than we’d like to admit. And, it costs firms both time and money.
You don’t have to accept the status quo, though. The single version of the truth which an ERP system provides saves both time and money.
How does it do that? An ERP system serves as a repository for your corporate data. It eliminates the need for people to maintain individual documentation. In addition, ERP systems make it faster to find information. Instead of spending valuable time searching through paper-based files, computer documents, or other databases for data, everything you need is available at the click of a button.
While it might not seem like a big deal, the amount of time your employees save with an ERP system really adds up. Aberdeen’s researchers estimated that companies that have implemented an ERP system save up to 18% in administrative costs. Thanks to a single version of truth, employees don’t have to engage in fruitless quests to hunt down data or engage in petty arguments about whose information is the most correct. They can devote more time to getting work done and earning the company money.
There could be other areas of cost savings thanks to a single version of truth that you might not have even imagined. For example, let’s say one of your employees discovers that a part that you’re already using for one item can actually be used for at least one other product. That discovery would also save time and money; you’d only have to order from one supplier. You’d be able to streamline your manufacturing process, another source of cost savings.
An ERP system has a number of benefits. One of them is a single version of truth – it’s important to highlight when making a business case and to keep in mind during your implementation.