When you try to convince a CEO of a company that his organisation needs an ERP system, the answer always comes shocking, and they are always asking this common question, what CEOs will miss if they did not implement ERP system?.
Business owners and CEOs of a growing businesses always see that they succeeded in their business with no external help of or implementing any helping software applications, and the business operations is growing and its performance is well, as the company has good sales and profit, so why now it is a must to implement ERP system or any other software application?
In the following are some points that will answer the above question, these points will highlight what CEOs will miss if they did not implement the ERP system:
1 – Every time period has its own success methodology
At the time when the growing businesses established, its operation size was small relatively, and the business elements were limited, taking in consideration the type of industry and the competition in the market at that time, the business owners or CEOs were able to manage all company aspects and focus on success factors to achieve their target using their own personal skills and know-how.
Today, The business size grew double or triple times of its start size, the business operations no longer can be managed by using few staff members, processes and procedures had been created to manage the workflow, also competitors had grown by time and may become more market aggressive, now the company owners and CEOs should consider their companies new size and shape and the number of business elements they should manage every day, today’s market size. Based on the new business size and increased number of employees, issues may arise from lack of cross-department collaboration, delay in business processes execution time or even the accuracy of business process control, which may affect the sales, cost, profitability and company reputation.
Because of the above-mentioned reason, business owners and CEOs should implement ERP system, to oversee running business processes, increase cross-departments collaboration, monitor and control processes time of execution, focus on profitable products and control the cost of operation, also to monitor our business market share and lost deals to competitors, so they can take decisions based on real accurate data not only assumptions or verbal statements from some employees.
2 – Eliminate human influence
Employees are a very important business asset for any company and usually work hard to increase their importance inside the organisation. By the time, these employees may gain an increase in their power and influence inside the system, which makes them very important to run the business, to the extent that the business continuity may be affected if these employees are not in place. This human behaviour affects the business as all business know-how is kept in these employees mind and is not shared or documented. These employees may miss-use this power to maximise their own personal benefit from the business, which represent an unrecognised loss for the business, as they act like a small company inside the main enterprise. This behaviour and attitude cause a huge threat to the organisation, whether these employees are in their jobs or if one of them decided to resign. Here are examples of employees who try to miss-use their role power in the company, trying to get more personal benefits or maximise their importance:-
- Sales: Salesperson, keep sales data and customer information for himself, so if they decided to leave the company, all sales data are gone with them.
- Warehouse: Warehouse keepers always keep the inventory numbers for himself and treat these numbers as a secret and it is prohibited to share this information with other employees or departments like salespeople, for example, trying to increase their personal importance, and get the maximum personal benefit out of this secret under their hand.
- Manufacturing: Manager or chief engineer may keep the secret of producing a certain product, claiming it is the company secret and cannot be shared with others, although this secret will be disappeared with him if he decided to leave the company.
We know that employees are very important for any business and will not be replaced by robots, but they need to be controlled and monitored, to avoid any manipulation, so business owners and CEOs should consider implementing ERP system to be able to get up-to-date information from several departments in one place, keep data safe and owned by the company, not owned by the people working in the business.
3 – Keep your market share, do not lose it to competitors
You have to understand that today’s markets are very competitive, dynamic, fast-moving, So regardless your company will implement ERP system or not, your competitors mostly will do.
Based on today’s market fast pace, you have to understand that numbers in the report which is on your desk right now or the one you are reading right now may not be accurate enough to make decisions, as it may take a couple of days to be prepared and sent to you, so it is outdated somehow and cannot be relied on.
Do you feel that your competitors are taking right decisions lately or maybe taking the lead of the market, for example, your competitor may expand in certain areas, or produce a new product, or eliminate a certain product or even export to specific countries, and you don’t know why they did this?. Do you feel that you become a market follower, not the leader any-more, these are all indicator you should consider and think seriously to implement an ERP system in your business to avoid more losses and to be able to make the right decisions based on real accurate information, you should be able to analyse these data which had been collected by the ERP system and relate them together to come up with more clear ideas and factor about your products and market movement, this will make your business to keep its position in the market and not to lose your market leadership to your competitors.
4 – Reduce long term loss
Most of the growing organizations are suffering from unrelieved long term loses from several departments and employees, business studies showed that more than 30% of the organisation expenses are not necessary and can be reduced whether with a percentage or to be cut completely. These costs may include the cost of business, employees benefits which may grow by time, lost sales because of certain business processes or internal rule or even employees have a conflict of interest and many more.
Business owners and CEOs don’t notice these expenses as it looks legal and the business is making a profit, although these are long term losses and should be stopped. First of all, it should be realised and measured by a tool to check its harmful impact on the organisation, this tool is the ERP system. So Business owners and CEOs should consider implementing ERP systems to avoid long term loses, so the organisation would achieve more profitability.
5 – Enhance Business Performance
Most of the companies think that their performance is very good and they are doing fine, the issue here when you ask them the question of what proof do you have that your business is performing well? Or why do you think this you maximum performance you can get from your business? Or what makes you sure that your organisation performance is good?, and the surprise that the answer doesn’t have any reliable information, no proof, no measurement of performance no performance comparison against KPIs …etc.. We understand that it is very difficult for business owners and CEOs who do not have an ERP system to have accurate reliable numbers to judge the business.
Management thinker Peter Drucker is often quoted as saying that “you can’t manage what you can’t measure.” means if you need to manage a company or business performance you need to measure the performance first and compare it against certain indicator that shows performance status.
So, business owners should think of implementing ERP systems to be able to measure the company, department and employees performance using the business data entered and recorded inside the ERP system, so they can improve the performance or understand about organisation capabilities and maximum performance their organisations can do.
CEOs and business owners don’t feel what they will miss if they did not implement an ERP system. The above reasons are only examples or reasons to answer the common question of what CEOs will miss if they did not implement ERP system, we understand every business may have different reasons to implement an ERP system, so if you would like to connect with us to check your business reasons to implement an ERP system, please fill the below form and one of our consultants will get in touch with you.