SMEs Save Atleast 20% Of Their Costs With ERP Software

July 10, 2014

SMEs Save Atleast 20% Of Their Costs With ERP Software

How ERP Systems Reduce Costs & Improve Profits for SMEs…this is the burning question for most of SMEs widely asked on Google. Small and medium-sized manufacturing businesses often face challenges with maintaining their position in the marketplace and need to overcome these before they can make more money. ERP software have evolved from MRP software Material Requirements Planning to incorporate all the functions required in the management of manufacturing operations.

Understand What Is ERP Software

ERP software is a simple and sustainable solution to increase productivity and streamline processes in a cost-effective way. An ERP software system combines manufacturing management functions into one central place. This includes all aspects of the production process from initial quotations through to invoice payment.

It creates an organized work flow for your business and also incorporates other important functions such as employee performance monitoring and interlinked accountancy tools.

Implementing the software can reduce administrative and operational costs as well as enhancing information sharing across your company.

How Can ERP Software Implementation Can Reduce Cost By 20%

A basic ERP software system which is powerfully integrated enables interactions of marketing, sales, quality control and many other areas. It eliminates the retyping errors as it would be in a single database. Integrating in all departments across the company will be able to benefit departments with particular needs.

It works to better integrate each division within the organization, helping it to function as one unified entity. Processes and transactions between different divisions are made smoother and faster and are less prone to human error. But this is not enough on its own – an organization’s agility and productivity also largely depends on how well it integrates with its whole ecosystem – its partners, suppliers, and customers. The more integrated the business is both internally and externally, the better it’s overall performance.

According to the report published by Aberdeen Group, the leading provider of fact-based research, an effective ERP system leads to these five benefits to SMEs:

  • 22% reduction in operating costs
  • 20% reduction in administrative costs
  • 17% inventory reductions (M&D only)
  • 19% improvement in complete and on-time delivery
  • 17% improvement in schedule compliance (M&D only)

Small and medium business houses have an added burden of competing with large scale businesses which are more cost efficient. Hence; in such scenarios, a well-managed ERP implementation can lead to long-term cost reduction and improved productivity. This will not help SMEs survive and thrive but; also promote future growth and expansion.

There are many different flavors of ERP that serve businesses’ varying procedure types and can bring an immediate success. An ERP solution has numerous benefits depending on the type of business that it serves; these are business solutions and industry solutions.

Hence; now that you have decided to implement an ERP one need to have a clear strategy for its implementation


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3 thoughts on “SMEs Save Atleast 20% Of Their Costs With ERP Software”

  1. Nice article! I think Cost management is really important to make a project successful. Cost exceeding from the target expenditure doesn’t make it worthy anymore. We have recently implemented Deskera ERP ( ) and the experience is wonderful.

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