3 Hidden Business Risks of Not Using An ERP

If your SMB is like many others, you’ve put off investing in an ERP for a variety of reasons. Maybe it’s because you don’t have a sizeable chunk of change to put into buying the software upfront. Perhaps you’ve heard that implementation projects can take months or even years and you don’t have time for that kind of arduous headache. So instead of making the move to an ERP, you are content to continue using your entry-level accounting software, or disjointed mass of spreadsheets, even though they come with difficulties of their own. While it might make sense on the surface, this type of status quo thinking can open your business to some costly risks. Let’s look at a few of the greatest business risks of not using an ERP.

 

You lack transparency, and your processes are anything but optimized.

When you don’t have a single system on which to run your business, it becomes very difficult for information to flow freely from one department to the next. This fosters an environment of siloed departments, where each is operating as its own individual entity with its own goals and challenges rather than as a cohesive unit working towards the company’s larger goals and mission. When processes remain siloed like this, you can’t see how the whole thing works from end to end. So, it becomes nearly impossible to locate and remove bottlenecks. Meanwhile, their negative effects send ripples throughout the entire business, from the finance department to customer service and everything in between.

 

Customer frustration builds in the face of inefficient service.

When you can’t clearly visualize business processes from beginning to end, customer service suffers. Think about it this way: which customer service experience would you prefer?

Option one: you call customer service with what should be a clear-cut warranty question. However, as you explain your issue to the customer service representative, they inform you that while they sympathize with your plight, they only handle customer service inquiries for the company’s other product line. So, they pass you along to someone else in the customer service department who handles inquiries about the product in question. As soon as you finish explaining your issue for the second time, you find out that this person can clearly see your order and that the product is indeed still under warranty. However, they do not have the proper privileges to start a warranty claim. So, they have no choice but to pass you on to their superior, who asks you to explain your issue a third time before they can help you.

Option two: you call into customer service with the same warranty question. This time, the first agent you talk to has a 360° view of all your interactions with the company. They can clearly see when you bought the product in question and if it is still under warranty. When they discover it still is, they can begin the warranty claim process.

Of course, you would prefer option two. Who wouldn’t? But without visibility into business processes that transcend departments, it’s almost impossible to deliver the service your customers expect and deserve.

 

Duplicate data entry and disjointed workflows rob you of your productivity.

Perhaps you’ve been using your spreadsheets or hodgepodge of systems for so long that it feels like second nature. But have you ever stopped to think about how much time you spend every day entering and reentering the same data into multiple systems? How much more do you think you can get done in a day if you could enter information once and have it flow automatically from one department, or one system to another? If you sat down and did the math, I’m sure the answer would surprise you.

Factoring in this lost productivity is one part of the ERP cost benefit calculation that many people overlook. When trying to determine how much ERP’s will cost your business, it’s not simply about comparing the licensing and hardware costs of your current system with a new one. Also consider how much your current solution is costing you in lost productivity or how much a new system could earn you in gained productivity.

Still, lost productivity is only one part of the duplicate data entry issue. There is also the increased chance of human error you must consider. When you’re going about your day quickly re-keying data from one system to another, how easy is it to transpose one digit in a six or seven-figure number? Quite easy indeed. But un-caught, couldn’t that have serious repercussions for the accuracy of the reports? Yes, it absolutely could. An ERP system helps you avoid these costly errors by allowing you to enter data one time rather than multiple times, mitigating the chances for this type of costly error.

 

What’s next?

Here we discussed three eye-opening business risks of not using ERP. However, this illustrates just a few of the many ways holding onto the status quo may hurt your business. If you’d like to delve into this topic further and explore additional risks of putting off your ERP investment, download this new infographic from Acumatica. It not only discusses the business risks of not using ERP, but it also shows how the right ERP can help you mitigate each one of those risks, strengthening your business, making it more efficient and more profitable.

Should you have questions about Acumatica, please visit our website. There you will find in-depth information on the fastest growing cloud ERP and all the features and benefits it offers. Or, if you’re ready to take the next step and find the right ERP solution for your business, we can help with that as well. Set up your free, no strings attached one-on-one consultation with our ERP experts today.

 

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