To what extent do ERP systems enhance strategic planning in your organization?
To what extent do ERP systems enhance strategic planning in your organization?
discover | Monday - 25 / 12 / 2023 - 11:25 am
When companies think about investing in a new ERP (enterprise resource planning) system or upgrading their current system, they focus on virtual aspects such as defining a central data source and reducing manual entry processes which have variety of problems. In short, companies often focus primarily on technology.
All of this is undoubtedly excellent, but doesn’t your company deserve a broader vision? A vision that includes strategic planning for its future? Why strategic planning is so important?
Who are we?
What do we offer?
What are our company’s strengths and weaknesses?
What are the pressing problems that we must respond to?
What should our priorities be?
Where should we allocate our resources?
Where do we want to be in the future?
Strategic planning can answer on the above questions and with confidence.
The above questions may seem “sized” for large companies, but even if your company is a startup, it also has resources at stake, a team responsible for managing those resources, and you are undoubtedly looking to expand. Strategic planning is an essential pillar, regardless of the size of the company.
Why do companies forget about strategic planning? Frankly, we can’t blame them (the companies) as senior management or the ERP project team is often so “tactically” oriented in day-to-day operations but not further. In such cases, the only thing on everyone’s mind is just going beyond the short term.
The problem here is the absence of a comprehensive plan to guide people as they make decisions, which means that, it is possible – and almost inevitable – the different parts of the organization move in different directions at the same time.
As the company grows, its activities will be disjointed and counterproductive, which may lead the company towards failure due to conflicting priorities (even though everyone is doing their job well!).
How to enhance strategic planning using an ERP system?
Here is the reply:
Make sure your vision is clear (perhaps this is the one aspect that ERP systems can not help you with!). You must define your company’s vision yourself (or with the help of your team). The process of defining the vision includes 3 main elements:
1- Determine short and long-term goals.
2- Identify methods and procedures that can help you in achieving those goals.
3- Inform employees and provide them with specific and clear instructions regarding their duties.
Companies often achieve amazing results in steps 1 and 2, but then stumble before the last step. Fortunately, enterprise resource planning (ERP) systems can assist.
Thanks to their centralization, ERP systems enable you to deliver instructions – and associated information – to a variety of users in one place while easily controlling access rights to documents (so you can rest assured that confidential details are not being revealed when sending information). For example, your financial statements will be automatically updated with sales department information (this will enable the finance department to reconcile accounts and issue reports as needed).
You to analyze and collect information that will help you in achieving your goals. Here lies this huge problem that is easily solved by the presence of an ERP system. In a system based on the digitization of daily business processes, ERP can provide you with accurate information about your company’s performance so far (in addition to generating reports within seconds and then displaying the results in the form of “areas where your strengths and weaknesses are shown,”). By this way, we can have a clear picture of the first two aspects of SWOT analysis (strength and weakness and strength, opportunities and threats).
As for the other two aspects (opportunities and threats), the ERP system can also analyze market trends and predict the company’s needs based on data from previous periods. This means that it is possible to plan for future market demand.
Develop the strategy
Start with reviewing the data. Then identify the resources currently available to your company (resources that will make it easier for you to achieve the goals you have set). On the other hand, identifying the obstacles that prevent you from expanding or reaching your goals. We recommend that you do not limit yourself to one strategy, but rather develop different alternative strategies to keep pace with the ongoing changing in economics.
This may seem like a lot for you or your team. But – fortunately – ERP systems can cover all stages of strategic planning and at the lowest cost and with high performance and efficiency.
You can enter your information, set priorities, and set a deadline to address issues. The internal team, as well as external teams, can work together effectively due to the ability to access/communicate information and data in real time.
Simply implement the strategy!
Using an ERP system makes this step easier by allowing the employee to check off his or her to-do list and track its progress to ensure optimal execution. In addition, by using KPI monitoring, you can evaluate how effectively your employees are performing.
Post-implementation stage:
After the strategy is implemented, an ERP system keeps you in the know about all the details – this is vital point in today’s volatile business environment where market conditions change, prices may rise, new competitors enter the market, new regulations affect the workflow, etc. -.
With access to real-time information, businesses can immediately address any concerns and create preventive strategies to prevent matters from getting worse. As mentioned before, an ERP system provides better planning to the decision maker. Thus, it will also allow your company to address any potential problems before they become too serious.
When talking about potential problems, we’d love to say the following:
Did you know that 68% of customers reported their unwilling to deal with several companies because they felt companies don’t treat them well? Therefore, customer experience truly sets your business apart from all the other companies in your industry.
Many ERP systems also include some customer relations management (CRM) features. Using CRM tools, you can simplify various tasks related to customer service, for example, an ERP system can track the following:
– Customer transactions.
– Requests
– Complaints
– Service requests.
That’s not all! The ERP system can also store information for expected customers. This means the sales team have a central base to access customer information.
The benefit of these features is not limited to improving customer service and increasing sales, but the real benefit is the awareness resulting from this detailed customer information. You can track your customers’ transactions so you can implement the right marketing strategies to increase customer acquisition and retention.
Here, we suggest on you to check out our previous blog post entitled: How our ERP system increased our customers’ productivity by 65%.
Customers aren’t the only external party you have to deal with! There still other external parties. Each country has regulations in place regarding business operations. These regulations include employee records, financial operations, and even taxes. An ERP system can improve your compliance with these regulations.
The record-keeping tools and financial modules in your ERP system will be automatically updated to ensure you comply with the regulations in your country. In addition, your employees do not have to spend a lot of time in reviewing the rules and looking for errors.
Well, we don’t think you need any more proof that an ERP system can improve your business strategy by increasing efficiency and productivity, do we?
Strategic planning for the future of your company in today’s complex corporate environment makes you need the right knowledge to develop the strategy correctly and this is what an enterprise resource planning (ERP) system provides you with.
Imagine development and launch of a new product in that time when you are armed with:
– Accurate knowledge of unit costs.
– Expected demand in different market sectors.
– Raw material costs in the foreseeable future.
– Cost and availability of labor.
ERP software can provide you with such vital data that enables you to make informed decisions, manage your daily operations, develop and execute strategy with full confidence.
Keyword: strategic planning.
