Increase Profit Margins with ERP

Increase Profit Margins with ERP


Increasing profits should be a goal for every business. An ERP system, intelligently used, can have a major impact on company bottom line.

The main thing ERP gives a company is better control over what happens. A secondary benefit is increased visibility into the day-to-day workings of the company. Taken together, these are a potent combination for increasing profits.

Of course you’ve still got to act on the information the system gives you, but with ERP you can act faster and smarter and help boost your company’s results.

ERP helps you identify your company’s top customers and then use that information to increase sales by letting you concentrate on your best customers.

Better Segmentation

Focusing on your best customers lets you increase profits by increasing the return on your sales efforts. It’s a truism that 80 percent of your profits come from 20 percent of your customers. Obviously if you can identify those 20 percent and focus your sales efforts on them, your efforts will be more richly rewarded.

Segmenting your customers with the use of ERP lets you identify those groups of customers that aren’t pulling their own weight. Perhaps they will benefit from special attention or perhaps you need to cut back on your efforts toward them. But you can’t make that decision until you have the information an ERP provides.

Process Automation

ERP also helps you automate business processes. By handing over many of your routine tasks to the ERP system, you can free up time and effort for the parts of the business that do need human attention, such as sales.

Automated workflows also avoid human errors and make sure nothing falls through the cracks. As your business grows, this becomes increasingly important. A properly designed workflow is more efficient when it is automated and more consistent.

In general, the rule is to automate processes wherever you can and an ERP system is a valuable tool in that effort. By taking the human element out of mundane chores like email follow-up, you reduce the likelihood that something important will be missed.

Supply Chain Management

An ERP solution can also help you tighten up your supply chain. It enables you to reduce inventory while helping you make sure that you have the right items in stock.

With better inventory control you can often cut orders from suppliers and schedule deliveries to minimize stock on hand. This lets you keep a closer eye on the inventory turnover and spot slow-moving items that can be reduced or eliminated.

Better inventory control is a basic way to increase profitability without increasing sales. As such it should be a basic business tool.

A working ERP system allows you to speed up the entire business cycle by shortening the time it takes to realize conditions have changed and to react to the changes. This quick adaptation is vital to keeping up with the fast moving pace of modern business.

Business cycle times are getting ever shorter. At the very least you need to match your competition’s cycle time and ideally beat it. The basic tools in the ERP package give you much more complete oversight of your business, which makes it easier to respond more intelligently to changes.

Whether you’re looking for better segmentation, automation or inventory management, an ERP solution can help. Adopting or upgrading your current system could be the first step toward improved profitability.

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We’d love to hear from you about your project. Whether you are interested in a new ERP system for your business, or if we can assist with your current system, get in touch!



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