ERP at a glance: What is the value proposition?

Here is another way to think about the question:

Once you hit a certain level of scale, there is no way you can effectively manage your business without having connectivity in your processes. Not having an ERP can lead to:

1. Late deliveries
2. Poor quality
3. Poor responsiveness
4. Poor support

All of this will ulitmately lead to dissatisfied customers and that might cost your company customers and new business!

Truly, the kind of ERP you choose and how you implement it determine its usefulness in your business. Yes, ERP generally enables you to keep track of inventory and automatically updates you on changes therein. There are other ways that ERP can save your business money for the long haul, as well. Because every operation within the business in monitored and recorded on a central system, administrators can get a much clearer picture of the strengths and weaknesses within the business' systems - aka what's working and what needs improvement - so they can eliminate unnecessary, money-wasting processes and replace them with better solutions. 

In terms of ROI: More often than not, a rapidly growing business will be able to delay hiring additional support staff and grow the business much larger with the same people, making revenue per staff increase and avoiding hiring/salary costs. But often you'll find direct savings, like cutting end of month close from weeks to days, consolidating purchasing for greater efficiencies, cutting inventory (and carrying costs), decreasing transactional costs - all depending on the organization, as well.

The greatest advantage of ERP in my opinion is actionable information.  A good ERP system will provide up to the minute information about inventory levels, customer demand, capacity, etc.  The principle "savings" comes from reduced inventories AND higher order fill rates.

A few items to consider.

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