A recent white paper from Scribe Software of Manchester, NH, reminds us that there are several very important reasons why companies adopt ERP systems, while reinforcing the very real business benefits of doing so.
In this quick two-part post, we’ll first look at a half dozen costs that businesses incur – often in a big way – when they fail to integrate their accounting and related applications in a manner that helps manage the entire enterprise, rather than just parts of it (like inventory, production scheduling, human resources and others).
All too often, integration in some companies means people manually copying information from one system to another. If this sounds something like your company – or your day – then this (and the next) post is for you.
Too often then, the unseen costs of such “manual” integration will include:
- Extra time: It takes people far more time to hand-enter data than it does for data to transfer electronically from one system to another.
- Data entry errors: People can and do make errors when copying information from one place to another.
- More extra time: It takes more time when errors are found to correct them, re-enter the information correctly, and then correct any damage which may have been caused by the errors.
- Lost customers: Incorrectly entered data, or delays in entering data into systems used to conduct transactions constantly, regularly cause mistakes in order fulfillment, receivables activity, or other functions that can frustrate and even anger customers who may take their business elsewhere.
- Excess shipping & processing: Every time late or incorrectly entered data causes a mistake, excess costs may be created in shipping the wrong product back to the warehouse, shipping the right product back to the customer, and other costly activities meant to ‘apologize’ to the customer.
- Extra staff: Customer Service departments may need to add additional staff as their workload increases to correct these costly mistakes.
Most of these are obvious and intuitive, yet we see companies (admittedly) making these same mistakes and costly errors every day.
In our next post, we’ll take a quick look at a few examples Scribe Software uses to demonstrate the business improvements and cost reductions companies can take advantage of by better integrating their disparate accounting functions with their other business processes. Stay tuned…