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Improve ROI on ERP with lower initial costs

Improve ROI on ERP with lower initial costs

Adding an enterprise resource planning system to a manufacturing or warehousing business can lead to some very noticeable benefits.

There are components of ERP that help save time on the work floor, like a barcode inventory system, letting employees get productive work done during a shift. There are also financial management components to these systems, along with the ability to make informed business decisions that lead to greater operational efficiencies in individual departments and for a business as a whole. In short, ERP leads to financial savings for a company, provided through a wide variety of applications that save time and money.

Determining the return on investment of ERP software can be difficult because of the different costs associated with these systems. TechTarget points out that some platforms will require license fees or other ongoing financial obligations, while financial obligations associated with maintenance and upgrades can vary greatly. Initial implementation costs also cover a large amount of territory, as preparation ahead of the actual software purchase and installation can drastically influence how long it takes to get a system up and running.

Manufacturers should consider going modular
A significant amount of continuing ERP costs are associated with maintenance and upgrades. Because of the monolithic, all-in-one nature of some systems, any sort of update can lead to significant issues with lost time and productivity during the associated downtime. Due to the varied needs of manufacturers, warehousing companies and fabricators, using this kind of ERP system can negatively impact ROI.

A better choice for businesses in these market segments is a modular system, such as Microsoft Dynamics NAV. The basic platform allows for operational insight, but the big benefit is the use of components to enhance specific features. For example, more advanced timekeeping software can be added on an as-needed basis, with far less downtime during the addition of the module.

Research into the use of ERP in the manufacturing sector by Aberdeen Group shows that one of the needs that drives so many companies to use ERP is the ability to stay agile and proactive – the ability to use business intelligence to get ahead of competitors. A modular system allows for targeted improvements that can reduce overall spending and improve ROI.

Learn more about the benefits of automated time collection by downloading the free white paper entitled "Justifying the Switch to Automated Time Collection" from DMS today.

Posted in: Industrial Manufacturing

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