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Can ERP system reduce the business costs?

The benefits of ERP software are vast and can help a business achieve its goals in many ways but one of the primary benefits of using an ERP system is that it can help to reduce costs and to increase profits! An ERP system works by integrating itself into the business and brings all the various departments within the organisation together. This enables the system to improve communication between the various departments and also enables the ERP system to carry out a number of mundane manufacturing and accounting jobs for you. Since implementing an ERP system, many companies are reporting a reduction in production costs by up to 15% and others have reported a reduction in costs within other areas also. Here are three how implementing an ERP system can reduce an organisations cost:

Improve productivity

An ERP system can track the organisations progress on the manufacturing line and can make informed recommendations as and when required. For example, if the ERP system, finds out that, the manufacturing line is short in stock of one particular item and if they don’t order soon they will not be able to get have the item delivered to them before their old stock runs out, it can notify the relevant parties that more stock needs to be purchased. This ensures that the company’s manufacturing line is running smoothly which means that orders can be processed quicker and new business can be bought in faster.

More efficient usage of staff

Prior to using an ERP system there may have been occasions when the same data would need to be entered multiple times by different departments which is wasting resources and the company is for staff to carry out the same tasks multiple times. However, because an ERP system unifies the communication between the various departments within the organisation, data only needs to be entered once and the relevant parties within other departments will be made aware of the new data. Reducing the need for the same data to be entered into the system by staff from various departments means that staff who would normally be entering duplicate data can now be carrying out other, more important tasks.

Better management of purchases

ERP software can track all the products that a business is selling as well as looking at how many of each product it is selling. This information can then be analysed to determine how much of each product to purchase by looking at which products are selling well and which [products are not selling as well as the company thought they would sell. This ensures that money is not wasted on purchasing products which are simply not selling and allows for more of the profitable products to be purchased.


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