GOLDILOCKS AND ERP DECISIONS

GOLDILOCKS AND ERP DECISIONS

ERP Decisions

Goldilocks, SMEs and the quest for ‘Just Right!’

“Goldilocks was wandering through the forest when she chanced upon a house. Famished and tired, she entered and was delighted to see three bowls of porridge to quell her hunger pangs. She tasted the first bowl and exclaimed that it was too hot. The second bowl’s porridge was far too cold. The third bowl however was just right for her and she soon gobbled it all up”

Small and medium sized enterprises are the proverbial Goldilocks of the business world. While Goldilocks strolled aimlessly through the woods in need of food and nourishment, these firms wander through the business world, in need of a solution to help them cope and compete in their industry.Goldilocks had to taste all the bowls of porridge to find the one that was ‘just right’ for her. Much in the same way as Goldilocks, firms also have to go through all the available options to determine which solution is ‘just right’ for their needs.

Just as Goldilocks was famished and in need of nourishment, a firm in today’s hyper competitive environment requires enterprise resource planning solutions to address its needs and hunger for growth. The solutions offered may be ‘too hot’ with far too many components, complexities and costs that would burn the firm. A ‘too cold’ ERP system without the necessary modules to meet the requirements of the firm is not a desirable solution either. An SME can neither have a ‘too hot’ solution or a ‘too cold’ one as both would hurt them and their prospects for growth.

So what is the ‘Just Right!’ solution?

1)The porridge that is ‘just right’ is sufficient in quantity to alleviate Goldilocks’ hunger, nourishing enough to help her grow and at a temperature that renders the meal palatable.

2) Similarly the ERP that is ‘just right’ has all the modules and programs necessary to meet the firm’s current and more pressing business needs, while the system aids the company’s future growth plans – all at an affordable cost. The ‘just right’ ERP should meet the firm’s current pressing needs and the future more complex needs for growth.

3) Most SMEs would find that their Goldilocks solution is a mostly standard ERP system with minimal to moderate customization and costs. Cloud-based enterprise resource planning programs are suitable for these firms as they are affordable and have the scope to be easily modified to meet the firm’s growing needs in the future.

“After finishing the porridge, Goldilocks felt tired and went over to the living room and found three chairs. She sat in the first one and exclaimed “this chair is too big!” The second chair was too big for Goldilocks as well. The third chair appeared to be just right in size for Goldilocks but as soon as she settled in, it broke apart completely!”

When Goldilocks is tired she goes over to a chair, settles into one that appears just right in size. The chair and Goldilocks both come crashing down. Firms with an enterprise resource planning system that opt for the bare minimal support get the same experience. Much like how the ‘just right’ chair was anything but, firms need to be wary of ERP solutions that provide the bare minimum and provide no flexibility or scope for adapting to a growing business.

     As a firm implements the system and starts reaping benefits from the ERP, it starts to increase its efficiency, productivity and growth. The ERP system and vendor should provide adequate support to aid the firm with any troubles it meets along the way. Programs that update automatically and keep the system running on the latest, most efficient system would be ideal for SMEs. A vendor that provides regular support services and is specialized in providing industry-specific solutions would be suitable as they can anticipate the firm’s needs effectively and intuitively as a result of their experience. It is essential that the ERP system and vendor must be capable of increasing the number of modules and services when the scope of the business changes – otherwise the firm may suffer the same fate as Goldilocks.

“Goldilocks feeling sleepy, proceeded upstairs and found three bed. She lay on the first and found it far too hard. The second was far too soft. She tried the third bed, and it was ‘just right’ and she promptly fell asleep.”
   
   Just like Papa Bear’s bed, which was too hard for Goldilocks, a large vendor’s solutions may not be suitable for small and medium enterprises. The big names of the ERP industry are more experienced in addressing the needs of large conglomerates. Their programs, modules and systems are all designed meet to the needs of the Fortune 500s and SMEs often find their solutions uncomfortable. Mama Bear’s bed, being far too soft, was also not right for Goldilocks. Similarly, ERP vendors that are too inexperienced or just offer a few individual modules may not be able to provide quality solutions for the firm.

 Vendors that are specifically focused on providing solutions for SMEs would be more suitable for compared to the ‘big players’ like SAP and Oracle. An out-the-box solution with minimal modifications is enough to meet all the current and future needs of most SMEs at a fraction of the cost of the big firms.

   Much like Goldilocks, firms can experiment with their ERP programs and vendors before settling into their ‘just right’ systems. Firms can draw some wisdom from Goldilocks as well – that is to not settle for anything that is not ‘just right’. When choosing an ERP system firms must keep in mind that it is a long term decision. Unlike Goldilocks, once they choose their bed, they will be lying in it for quite a while.

Contributor : Vidushi

FUNCTIONALITIES OF ERP SYSTEMS

FUNCTIONALITIES OF ERP SYSTEMS

What exactly does an ERP system offer?

There is much talk about businesses implementing an ERP system to meet the growing needs of their organizations, and manage the complexities that come along with growth. But what exactly are functionalities of ERP and why do businesses need it?

Enterprise Resource Planning, abbreviated as ERP, refers to programs and systems offered to businesses that aid in their day to day transactional processes, business decision making, analytics, reporting, and customer relationship management among other things. In the past it was exclusively in the domain of giant companies that could afford the exorbitant price tags that came with the ERP implementation. Companies such as Nestle, Nike, Hershey’s, and Sony would routinely spend over a 100 million dollars to integrate and streamline their business processes and various branches all over the world. What did an ERP system offer that made it worth so much? We will discuss the major features and functionalities of ERP to shed light on it.

Financial Management and Accounting

The first most basic module in an ERP is that of accounting and financial management. An ERP software allows the employees of an organization to enter day-to-day transactional data and purchases. It provides a framework for the accounting data and transactions of an organization to be entered and updated on a daily basis, giving a real time, accurate financial reports. The company’s assets, liabilities, revenue, profits are all consolidated under one roof. The framework provided by the ERP software helps to standardize the accounting information and streamlines the process. It increases the efficiency of the accounting and finance department of the company and increases transparency of the organization as it allows management and employees to view the components that make up a financial figure. The greater accuracy and transparency helps both the internal and external stakeholders of the company to make business decisions.

Purchasing and Ordering

The ERP program enables companies to automate their purchasing process and optimizes the purchases. The ERP software helps in selecting vendors, planning purchases and managing orders. It integrates the data with other business functions like accounting and warehousing within the system and enables employees to have a detailed overview of their stocks and purchases. It enables the organization to make the best purchase decisions and thus save on costs. The vendor management feature of the module allows the organization to maintain steady supplier relationships. ERP helps to centralize the information and have real time reporting about the happenings of the business. It ultimately helps to make better informed buying decisions.

Warehousing and Production

Businesses can manage their inventory across various warehouses and locations with the help of an ERP software. Manufacturing companies can maintain optimal inventory levels and aids in material requirement planning and production order management. Export-import businesses can maintain optimal stock levels and improve on-time delivery – without experiencing shortages or being forced to maintain surpluses. The ERP program enables accurate inventory tracking and costing, giving managers a keener business insight. The greater efficiency due to the automation lowers inventory costs. The on-time delivery and fewer stock shortages increase customer satisfaction and help the company grow.

Customer Relationship Management

One of the most important features of ERP, this allows businesses to win new customers and increase customer loyalty. The customer relationship management tools help to optimize and integrate the company’s sales, marketing and support processes. The ERP program helps businesses to plan and monitor their marketing campaigns, and later helps to analyze the results. By analyzing the customer’s information, it helps companies identify the most promising prospects and convert these prospects into loyal customers. Efficient management of service contracts and warranties improves customer service times and increases satisfaction levels. The company can increase its sales revenue and look towards greater profits arising from more customer conversions.

Integrating Subsidiaries and Partners

Large companies often have multiple subsidiaries and partners, and intercompany transactions tend to increase business complexities. An ERP system automates, streamlines and integrates intercompany transactions and helps to prevent confusion and reduce errors in reporting. The automation increases organizational efficiency by saving time and effort that would otherwise be spent in manually processing and reconciling company data. The ERP system helps companies comply with governmental rules and regulations regarding inter-organizational transactions. The increased transparency in the reporting of intercompany transaction help to give an accurate picture of the overall performance of the business.

Analytics and Reports

The overall ERP system increases organizational transparency and gives a real-time accurate picture of the company’s financial performance and growth. The streamlined and standardized data enables employees to have a clear understanding of the company’s internal situation. The up-to-date data enables fast and accurate report generation for the company’s shareholders and management. The ERP software often helps in the analysis of business data and enables employees to make well informed decisions.

The standardization and integration of company information increases overall organizational efficiency. The greater transparency that results from the ERP system provides incentive to shareholders to continue their investments. The improved customer service helps to increase loyalty and gain new clients in the process. Overall, the implementation of an ERP system helps the company to grow and maximize its potential.

Contributor : Vidushi

CRM IS ESSENTIAL FOR SURVIVAL

CRM IS ESSENTIAL FOR SURVIVAL

In the age of the hyper-competitive, businesses that fail to provide exceptional services each and every time risk losing out to competitors

That is one of the reasons why CRM program sales have grown exponentially in the past few years. Even small and mid-sized enterprises will now splurge to ensure that they remain ahead of their competition. For companies that are still in two minds, the following benefits of CRM should quell their doubts, knowing a great CRM system is worth the investment.

Improved Customer Service
Customers today expect nothing less than the best when it comes to service. Companies are at greater risk, as one bad customer experience can unleash social media mockery from all corners of the world. Customers today expect a customized experience – long holds, several call transfers and unsatisfactory resolutions to problems are a surefire way to lose both current and potential clients.

A customer relationship management system enables you to identify your customer, know their past purchase history and experience and quickly address their questions and concerns. It allows the service team to recommend products and services that match each individuals’ profile. Customers enjoy better service with fewer hassles and the company benefits from more happy and loyal customers.

Increased Interdepartmental Integration
With a CRM system the sales, marketing and customer service department are able to freely and easily exchange important information about business strategies and processes. The increased collaboration leads to better interdepartmental coordination and creates synergy within the company. This helps achieve organizational goals faster and more efficiently. With a CRM system, all the departments are able to function as a cohesive unit. The three way approach helps to give customers a better experience, convert more leads into sales, and increase company revenues.

Streamlines Functions
In sales, marketing and customer service areas, there are often many formalities that need to be done and recorded. Keeping customer records up to date, scheduling and tracking follow ups to clients, general record keeping about customer inquiries, complaints and resolutions are some of the critical, but often mundane tasks that employees need to complete. A CRM system enables the staff to quickly record data, and automates the follow ups, and customer records. With all the mundane tasks out of the way, the marketing team can focus their energy and efforts on creating impactful campaigns and the sales team can focus their efforts on converting prospects into loyal customers.

Aids in Marketing Campaigns
A CRM system can quickly analyze available data about individuals and identify the most promising prospects among them. The marketing team can identify their target market and design a campaign to convert them. The CRM program enables employees to plan and monitor their campaigns and analyses the effectiveness of their efforts. By allowing businesses to focus on their most promising segments, and fine tune their marketing strategies accordingly, a CRM system generates greater returns and reduces costs. Time, effort and money that would otherwise have been spent on marketing to individuals who would not become customers is thus saved.

Analysis and Reporting
The CRM program integrates customer and sales data and houses it in one place. This reduces data redundancy and allows the program to track and analyze the buying behavior of each customer. Thus when time comes around for a new product purchase, the CRM system enables the sales team to swiftly swoop in and ensure the customer remains loyal to the company. Additionally, companies have an automatic view of which products and services are selling well and which ones are not. Managers have a clear view of the overall sales and services performance of the company. It also allows them to identify the most and least efficient staff members and helps the HR department when time comes around for bonuses and pink slips.

To rule the market, it is essential that you treat your customer like a king. A customer relationship management system enables companies to focus on their customers and provide the best service to them. The data analytics gives staff an overview of each customer and help them to deliver personalized and customized experience to each and every client. The automation and efficiency afforded by the program gives the marketing and sales departments the ability to create and execute impactful campaigns that will ultimately increase the bottom line of the business.

Contributor : Vidushi