Five Ways To Unlock More Value From An Existing ERP System

Modern ERP systems are powerful platforms built to integrate data, streamline processes and enable better decisions across finance, operations, supply chain and beyond. Essentially, it's a business’s central nervous system. Unfortunately, many organizations only scratch the surface of what their ERP can deliver, often using it as a transactional system rather than a strategic advantage.

It is possible to improve value without a significant investment. With targeted and intentional adjustments, your existing ERP system can enhance efficiency, provide better insights and support improved performance.

Here are five general strategies to help increase the effectiveness of your ERP, regardless of the system you use.

Data Quality And Governance

Systems are only as good as the data they process. The old adage of garbage in, garbage out is especially true with ERP systems. While an ERP may serve as a business's central nervous system, data is the blood. Inaccurate, inconsistently formatted or outdated data undermines system effectiveness and decision making quality. Failure to correct these issues can lead to poor decisions and inefficient processes, ultimately resulting in customer dissatisfaction.

From my experience leading ERP initiatives, the biggest game changers in efficiency have come from cleaning up the data model. On one project, we standardized vendor naming conventions, and within weeks, the finance team reduced duplicate payments by nearly 20%. We then saw a 25% reduction in incorrect payments by extension.

To drive data quality, you should take the following approach:

• Define standardized naming and classification structures for all of your key data elements, such as vendors, customers, products and accounts.
• Configure validation rules that control field-level data elements to prevent erroneous data entry.
• Institute a data steward who has accountability for the quality of data in the system as well as the power to update and enhance it.
• Conduct quarterly or annual reviews of the data to identify duplication or misclassification.

A strong data governance model will help ensure that the ERP system remains a reliable system of record.

Workflow Automation To Minimize Manual Processes

One of the most effective ways to improve your realized ERP value is by reducing the need to conduct routine tasks manually. At one organization, we implemented automated workflow approvals in the procurement department. This reduced new supplier onboarding by 30%, resulting in increased capacity for contract reviews and an 11% improvement in identifying contractual issues.

Most ERP systems offer built-in workflow automation tools that replace manual processes with structured, rule-based logic, eliminating time-consuming tasks.

Examples Of Common Automation Business Cases:

• Procurement requests can automatically be routed for approval according to specified criteria such as dollar amount, department, product type or location.
• Task assignments or reminder emails may be automatically generated when a specific event, such as a new customer or vendor, is added to the system.
• Recurring and consistent processes such as month-end closing checklists, payable batches or inventory updates can be scheduled without the need for manual intervention.

Many of these systems provide visual workflow designers or business rules engines that enable companies to standardize approvals and speed up cycle times. Additionally, introducing purposeful automation will improve the ability to audit transactions and embed critical controls.

Read the full article published by Forbes.