A widely-used acronym in the business world, Return on Investment (ROI) is an important factor in any time or money-focused decision. Whether it’s the cost of a new lorry or time spent on staff welfare, the hope is that the investment is justified. In the case of a lorry, ROI can be easily measured; when it comes to Information Technology, however, the justification can appear to be more complex.
Between five and ten years ago technology was still replacing manual order processing systems. Today, 99% of clients investing in a new system will already have one which works, operates for a reasonable cost and is familiar to the team. So why would they end up investing in a new system?
ROI isn’t always the focus. Sometimes clients are forced to upgrade; the system they use is not scalable to accommodate the growth of the business, or the standard functionality no longer caters for the company requirements. Maybe the software author has been acquired or is going out of business, and the system is no longer being supported.
Whatever the initial reason, the case for purchasing a new system can now be justified by the measurable ROI that is available from modern technology delivering real-time information.
Businesses face a “perfect storm” of challenges including margin pressure from suppliers and rising wages for staff. Add to this an environment where buyers can access your competitors’ products and reviews from a smartphone, it’s important to have your game face on 100% of the time.
Most distributors already have software that will process orders rapidly, replenish stock and run the books. The majority of these systems will only produce reports when requested; if there is an issue, you or your staff will only see it when a certain routine is run. The problem is, even if the information is only an hour old the window of opportunity to lessen potential business impact has passed. Failing to interrogate the system in time could see consequences such as running out of your fastest moving lines or even being overly exposed with customer debts.
The more obvious benefits come in the form of intelligent stock purchasing. By using modern software to analyse sales trends stock order thresholds can be recalculated ahead of time. Money can be saved by reducing over-purchasing slow moving stock or less profitable product lines. This information can be accessed via well-designed dashboards which provide concise, current information and enables you and your team to manage the business with minimal effort. In this way you can log into the system each morning in confidence that you are up to date with any issues in your business that require immediate attention.
Even without logging into the system directly you can reap the benefits of a modern and reactive system. Business Intelligence and other system information can reach your pocket in the form of apps available for your smart phone. If it’s important to you to be able to keep up with your business while on the move you can use automatic alert processes, so you are updated in real time no matter where you might be.
More subtle benefits are found in the automation of business processes. A timely email (automatically generated by your system) can let your buying team know when a key stock item is about to reach its minimum stock level; waiting until tomorrow when your buyers run suggested buying might be too late. Or, your accounts department could receive notification when a customer has breached their credit limit, while your customer receives a friendly, issue-solving SMS text message at the same time.
Business software that offers live dashboards and self-monitors makes it easier for you to manage the company’s performance across all departments. Automation can save administration time as well as help to prevent costly mistakes which could impact on service levels (and therefore sales and profit). If it is effortless for users to analyse data, then they will be more inclined to do it. The more investigation required, the less likely they are to carry it out.
As demonstrated in the examples above, ROI from your new software system is not only possible, it is significant. Improving the day-to-day life of your employees and refining your customer service offering are welcome benefits of a system which allows you to keep a finger on the pulse of your business.
Modern ERP software should cover every facet of a business and bring previously disparate departments together for exchange and transfer of information. It is a further bonus when that information is pushed directly to you, allowing you to react to time-critical issues; ultimately, saving you time and money which is directly attributable to your investment in modern ERP software.