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How To Measure The Real Profitability Of An ERP For SMEs

ERP in SMEs, establishing as a starting point the measurement and identification of costs, since in the process of selecting…

By TrendsTechBlog , in TECHNOLOGY , at June 19, 2020 Tags: ,

ERP in SMEs, establishing as a starting point the measurement and identification of costs, since in the process of selecting an ERP different suppliers will quote the total cost of the project based on very different factors.

These factors can occur according to; the cost of licenses or the cost of the subscription, the adaptation of technical infrastructures, the costs derived from the implementation itself, or the management of change that includes training, communication, and many times, relocation of resources, among others.

An ERP will only be useful for SMEs if its implementation brings not only benefits in terms of agility and flexibility, but from an economic point of view. Establishing workflows and systems that automate processes makes day-to-day easier. But, from a profitability point of view, managers of small and medium-sized companies demand figures. The system is also prepared to provide this information.

How To Identify The Best ERP Profitability In SMEs

Once all costs have been identified and accounted for in detail, organizations should measure, in the most objective way possible, the benefits associated with using the new application.

There are several ways to measure this value, however, there are some guidelines that are common to most companies. Some of the most relevant can be summarized in the following points:

Operating costs refer to both the basic costs related to the activity itself, those that have to do with the day-to-day running of the business, and the expenses that other additional services entail, although necessary. To do this, SMEs can identify other cost categories that will allow them to define those operating costs more accurately.

Automation: That is the tasks and processes that required manual work and that an ERP can be simplified and automated.

Centralization Of Information: The normal thing is to bet on a modular ERP that allows integrating and centralizing all the information of sales, purchases, production, and accounting, in a single application.

Services: Moving from a local system to a cloud solution, costs also decrease. Without the obligation to have physical space for the servers, or the dependence on IT teams to do maintenance and updates, costs will decrease.

An ERP will only be useful for SMEs if its implementation brings not only benefits in terms of agility and flexibility, but from an economic point of view.

Shorter Sales Cycles

After implementing ERP, companies will notice a significant reduction in their sales cycles. It is a matter of efficiency and of applying the optimal resources to the execution of each task. Many ERPs also allows integration with other applications for customer relationship management (CRM), which makes the sales process even shorter and much more efficient.

Improved Supply Chain

Another element to consider in calculating ROI has to do with streamlining the supply chain. An ERP allows you to manage all this information very easily and thus obtain better commercial agreements.

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