In the ever-competitive world of business, financial efficiency is the ultimate goal. The need to be financially secure has never been more critical, and that’s why many companies turn to cost reduction.
Apart from improving financial performance, cost reduction initiatives are also driven by the desire to enhance customer service or implement more competitive pricing.
With Enterprise Resource Planning (ERP), this is all possible. A cloud-based ERP system like Microsoft Dynamics 365 provides you with a comprehensive picture of your business letting you know how business is performing.
Consolidated process and workflow
ERP software integrates all processes into a single platform with real-time accessibility to all departments. This centralized system promotes coordination and improves reporting and analysis, making it easier for workers to communicate and make quick, informed decisions. It presents your organization the ability to see how one problem is affecting all other processes.
With ERP, information is entered only once, thus eliminating duplicate tasks and systems. It can be customized to meet your specific needs to avoid unnecessary processes. Lastly, an integrated ERP grows with your business, allowing for new modules to be added and business flows to be reorganized as needed. When everything is in order, you can avoid unnecessary expenses.
Streamlined operational and purchasing processes
Operational processes are most efficient when they are streamlined and automated. This helps increase productivity, minimizes integration time of new hires, and provides decision-makers with a clear look on how the business is doing. Operations performed manually are open for errors and may not be effective in terms of time and number of workers required.
The same is true for the purchasing process. If there is a smooth channel of communication between your company and your suppliers, you will be able to synchronize acquisitions and sales activities. Analyzing sales data from ERP enables accurate management of acquisitions. In the end, consolidation reduces costs by doing away with expenditures caused by manual, disorganized processes.
Detailed, real-time tracking of costs
ERP enables businesses to track actual costs in detail as materials are acquired, and as products are created and shipped to customers. With the capacity to oversee the costs your business generates, you can define cost points in advance and set budget spending accordingly.
Excess, damaged, or misused inventory lying around the warehouse incurs extra cost because they are capital that cannot be sold anymore. ERP identifies slow-moving inventory and finds ways to reduce its time sitting in the warehouse. When inventory is reduced, warehouses are used efficiently, saving your company the extra costs associated with handling and storing them. This may include rent and administration staff expenses.
From fuel consumption to drivers’ salaries, your company’s car fleet generates costs. That’s apart from the unforeseen expenses such as service and repair, fines, and purchase of spare parts. ERP enables you to control your fleet of vehicles more effectively and better plan expenditures.
Improved sales process through E-commerce
Managing an online store is much more cost-effective than a brick-and-mortar business. There is no need to worry about rent, maintenance, and taxes. You also spend much less on wages because of its self-service functionality. Integrated with ERP, online stores allow customers to view inventory, check order status, and track shipments. If your company hasn’t implemented one yet, now is the time.