ERP – It’s all about automation
Regarded by many as a must-have application for the modern business, Enterprise Resource Planning systems have become ever more common, helping companies to assume control of their day-to-day operations with a high degree of accuracy. Whether deployed at a single site organisation or a multi-national corporation, ERP has become an essential part of those businesses.
Despite the prevalence of ERP however, the major benefit of such systems is often missed. Much is made of potential cost savings, but few understand that these savings are not based on methodology or concepts, but on a reduction of duplicated effort and automation of common tasks. A business’ greatest cost is always its workforce, which is ultimately where the greatest cost savings are found.
Automate for savings
Most business processes contain inherent inefficiencies, but it is only during analysis and benchmarking that they come to light. Unfortunately many businesses only carry out process analysis exercises during major projects. At these times resources to address such issues are often unavailable. An ERP implementation provides the ideal opportunity to not only identify inefficiencies, but also implement changes to reduce or minimise them.
ERP systems have the added benefit of not only highlighting inefficiencies, but also providing a way by which automation can completely negate them. Legacy systems typically involve the same information to be entered and manually updated several times throughout the manufacturing or production procedure. ERP platforms can reduce much of this manual data entry, progressing virtual paperwork through the production chain automatically.
This use of automation immediately reduces the amount of time spent by employees on administration, allowing them to focus on carrying out their core duties without worrying about burdensome paperwork. Eventually automation of enough common tasks will create efficiencies sufficient to allow for workforce redeployment and/or reduction. It is at this point that cost savings increase from minimal to significant, finally realising the cost savings promised by ERP vendors.
As an addendum, it is also at this point that we must delineate between those tasks that the ERP system is best placed to automate and those tasks that are best automated outside the ERP – the tasks associated with supply chain management. A common failing of many ERP projects is loading the ERP system with tasks that it was not designed to automate.