A handful of strategic advantages tend to accrue to businesses that use ERP systems effectively. Several of these advantages were revealed in a recent paper by Aberdeen Research on the use of ERP in Small to Midsize Enterprise, 2012.
In its research, Aberdeen makes a point of defining what they call “Best in Class” or “Top Performing” firms as those who rank statistically highest in its various surveys of business system users. Typically, these titles go to respondents whose results put them in the top 20% of users today – these are the folks who are most effectively leveraging their business software technology, people and processes to…
– Gain the fewest days sales outstanding (on average, just over a month)
– Close at month-end faster than most others (on average, in 3 days)
– Have the highest on-time deliveries (96% on average)
– And most importantly, earn the greatest increase in profits among all its surveyed companies over the past two years (on average, 18% greater)
Want to know how these “best of” companies are leveraging their information systems? Read on…
First, they make a big deal of standardizing and streamlining every process possible. They use their knowledge (and their consultants’ knowledge) to optimize their workflow processes, and then they build those processes into their software and workflow — especially back office functions like procurement, production, planning and execution.
Second, they know that to gain competitive advantage, you need to be cutting edge. And so they invest, strategically, in those systems that will give them a performance edge – in timeliness, order fill rates, delivery times and customer responsiveness. So they invest in modern hardware and software, and they strive to keep those investments up to date.
Third, they take intelligent action before they start taking orders. They perform demand planning and forecasting, using the knowledge bound up in their systems. Likewise, they scour the organization looking for areas for improvement.
Fourth, they commit to continuous improvement, not to mention lean initiatives. Top companies are thus more prepared for both internal and external shifts in their circumstances.
And finally, they commit to training their people. They use a defined on-boarding process to teach new users how to user their system. They make this a part of their culture. And they teach new hires the benefit and value (not just the usage) of their business management systems.