Leaders and management heads of companies in the automotive sector often need to make critical decisions on how to make operations in the organizations more efficient. One such decision is about the choice of an ERP (Enterprise Resource Planning) system. ERP systems can be integrated into any organization, providing benefits that involve optimizing operational efficiency, cost reduction, profit maximization etc. ERP implementation requires a considerable amount of time, money, and cooperation between different departments in the organization.
If you are planning to implement an ERP module to integrate various processes and resources for better efficiency at your automobile workshop, you should first understand its benefits, and pros and cons on each and every aspect. If you are planning to buy one for your automobile business, then make sure to go through the pros and cons here. Without further ado, let’s discuss the pros and cons of using ERP software in your business.
Pros of ERP in automotive industry:
Competitive Advantage
Implementation of ERP software requires a huge investment, but there will also be a huge cost if not making the investment. Manufacturers tend to seek latest technology solutions for their business, while some always stick to the oldest form. With enterprise resource planning software users can see improvements within multiple departments. Implementing the software helps the business help in keeping ahead of the competition. Investment in competition will start reaping many benefits and that will be discussed below.
Better process efficiency
An effective ERP system helps in eliminating the processes that are repeated and will also reduce the need of manual work which will ultimately improve the user productivity. I will also eliminate the possibility of generating inaccurate data which will affect the business. The software implementation will improve the daily business activities through process streamlining, that makes it easier and efficient data collection. ERP will keep a track on the business activities, noticing every detail and making work life easier and more efficient from users to customers.
Enhanced visibility
The main key within the manufacturing operation is visibility and is considered as one of the biggest advantages in using ERP software. ERP enables access to every important component within the manufacturing operation and will take decisions on production processes. This information is important for operations and plant managers to oversee the production status of the organization.
Improved planning and reporting
Along with visibility ERP offers a better and unified reporting system for every process in the organization. With the help of a single source of information, the system can generate useful reports and analytics at any time. This software will enable the ability to analyze and compare functions across departments, without the hassle of multiple spreadsheets and emails. One of the complicated reports involves financial reports. Standards reports like income statements, cash flow statements can be easily generated without IT intervention.
Many ERP vendors also offer BI (Business Intelligence) services with their software. This functionality allows the organizations to gain a deeper level of analytical insight into their operations. This will in turn aid in corporate planning by identifying both operational strengths and areas where improvements are needed. ERP users can make better informed decisions with a detailed view on company’s data based on the latest trends and metrics.
Precise forecasting
ERP software provides tools to create accurate forecasts. This software helps the managers to think ahead and plan what they need from inventory and sales to customer service. With precise and clear forecasting, organizations can effectively reduce the costs, which will save money. Since the system provides accurate information in real-time businesses can make realistic estimates and more effective forecasts.
Data security and quality
One of the greatest advantages of an ERP system is its data security. Sharing of data across different departments (sales, marketing, customer service, finance etc.) enhances collaboration in the organization. The data security feature of the software controls the data accessibility of users and ensures the security of your data. Merging information from different systems causes conflicts between sources, but an ERP with a single data system helps you in improving accuracy, consistency and security of data stored. The cloud based ERP systems provides an extra layer of security and enables centralized back-ups of the critical and sensitive data.
Integrated information
An ERP platform acts as a centralized system for all the information that is required by the organization to maintain the daily business practices and operations. There will be no confusion among the employees as the data is stored in a single location. Organizations can integrate the CRM software with the ERP software and keep the data consistent, unique and accurate. Through a centralized system you can maintain the orders and inventories at one place. Managers need not worry about the accuracy of the information since it is updated in real time across the board. And this will improve the data accuracy and will eliminate mistakes with false data and analytics.
Better customer service
ERP systems help in providing the customers with high-quality service. Businesses can interact with customers better and improve relationships with them through faster and accurate access to customer’s information and history. Through the end-end-tracking offered by an ERP system, you can provide better customer service and interaction from marketing automation all the way through late-phase customer service. Elvis Automotive ERP integrates with CRM, which is designed to strengthen the relationship between the business and its customers.
Cons in using ERP software in your automotive business:
With so many advantages of ERP software, it is equally important to understand the disadvantages of the software in order to ensure that ERP is the right system for your business. Now let’s look at the cons in using an ERP system for your business.
Cost
Depending on the financial capability of the business a disadvantage can be the pricing of ERP software. With most of the ERP solutions, multiple fees are applied, which can lead to higher costs. From license to upfront cost, implementation and recurring potential monthly fees, some ERP solutions may be too expensive. Researching on the ERP solutions within your price point can help you spare from spending more money than originally anticipated.
Customization process
Customization is one of the aspects of ERP software, but it can easily and quickly get out of hand. Customizing your software takes a lot of time, effort, money and expertise. Businesses completely underestimate required resources in the implementation process or they will end up going way over the budget. Customization can end up eliminating the best features built into the system and makes it more difficult to upgrade in the future.
Software experience
If the businesses choose to forego the training process or if the ERP vendor is not offering training, it will put the entire workforce in a vulnerable position. Lack of knowledge on the software will put the company in a risky situation where they will have to spend a large amount of money and time on implementation. Businesses have found vendors that will offer training and will help the businesses in gaining knowledge and creating a skilled workforce.
ERP resistance
It may take time for the employees to get used to new software. The members of the workforce may struggle with integrating information into the software, which makes it hard for the ERP software to truly serve all the departments that put up a business.
The need for investment in ERP
Even with these demerits, ERP software is still a key for building a successful business enterprise. The benefits of implementing an ERP system will outweigh the negatives and will give the company a competitive and financial boost while improving the overall productivity, efficiency, integration and communication. If you are planning to implement ERP software for your business, contact us, we will provide you with our best in class solution.
