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ERP is traditionally understood as way to increase productivity, efficiency, and oversight. What often gets overlooked is that it’s also a powerful cost-cutting tool. Organizations of all sizes that are eager to make meaningful reductions in spending will be impressed and surprised by what ERP solutions must offer. Here are some examples of cost-cutting opportunities available immediately after an ERP implementation.

  1. Streamline Tech Spending – An integrated ERP solution brings together multiple departments and adds multiple new capabilities. That allows you to eliminate many of the expensive and ongoing costs of technologies that have been patched together throughout the enterprise.
  2. Reduce Operational Costs – The best ERP solutions allow you to automate the most time and labor-intensive aspects of data management. Rather than wasting time and resources trying to organize a flood of information, you’re able to focus on more productive pursuits while reducing the risk of error.
  3. Economize the Purchasing Process – Even minor errors in the purchasing process can lead to huge sums or lost or wasted revenue. ERP is intended to give managers a top-down perspective on purchase orders that empowers them to eliminate inaccuracies and inefficiencies. This ability also helps to make the most of sales opportunities.
  4. Manage Costs – Careful financial management is essential but often unattainable. ERP makes this process easier by allowing managers to set spending limits and track/monitor expenses in real time. If there is an opportunity to save more or earn more it’s instantly apparent.
  5. Calibrate Inventory – Every piece of surplus inventory is only an example of wasted spending. ERP offers powerful tools for supply chain management that allow decision makers to optimize their on-hand supplies.
  6. Simplify Warehouse Management – A warehouse can either be a lean and efficient asset or a major source of wasted spending. Since ERP helps you to get control of your inventory while making it easier to forecast sales, enterprises can use every square foot of storage space to maximum advantage.
  7. Improve Fleet Management – Companies that manage a fleet of vehicles, equipment, or specialized tools know how hard it is to keep the attendant costs in check. By integrating all available data and automating data analysis, ERP makes fleet management a more effective exercise overall.
  8. Optimize CRM – Customer Relationship Management is a revenue-generating exercise, but it also creates unique costs. With an ERP in place you may be able to abandon many of your current CRM tools. You will also approach the process with improved efficiency, transparency, and speed.
  9. Decrease Management Burden – Managers often waste time resolving confusion and conflict rather than devising strategy and focusing forward. ERP gives form and function to confusing data sets while making it easy to pull out the most urgent and relevant insights. Managers can dedicate their efforts to initiatives that directly serve the strategy of the company.
  10. Gain Strategic Advantages – If you think of every lost opportunity as an unnecessary cost then ERP has a massive impact on the bottom line. Once your company data is aligned with your strategic objectives you can boldly pursue growth. Plus, the simplicity of quality ERP solutions makes it easy to add business intelligence and big-data analytics to your tool kit without investing heavily in new technologies or IT staff.

Deciding whether to implement an expensive new piece of technology really comes down to ROI. There are certainly costs involved with ERP. But the return is even larger than most late-adopters realize. If your goal is to get control of your spending and make smart budget reductions over the long term, a modest investment in ERP is a sound strategy.

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