Want to hear a secret? Organizations of all sizes – from SMBs to multinational conglomerates – are achieving new levels of operational effectiveness, customer responsiveness, employee satisfaction, and profitability through Enterprise Resource Planning systems that are specially configured to meet their individual needs.
Okay, that’s not exactly confidential information. But what may not be so apparent is how ERP can make a profound impact at every level of an organization…particularly in so-called “back office” areas such as Finance and Human Resources.
Astute players of all sizes and industries in the global marketplace are beginning to discover how these systems elevate and align divergent business operations into strategic differentiators. These differentiators offer critical advantages that help separate an organization from competitors.
That’s a secret worth sharing, right?
Finance Department ERP
Think about the critical importance of an organization’s Billing department: generating revenue that funds operations and (ideally) results in profitability is the prime objective of practically every organization that operates in the business sphere. Other measures of operational success such as long-term customer satisfaction, new employee hires, new product upgrades, optimized service offerings, and industry accolades are the drivers of sustained success, but they are made possible through the cultivation of ongoing revenue streams.
Ask yourself, then, why billing so often receives secondary consideration in your day-to-day operations? You’ve probably grown accustomed to viewing your accounting and billing systems as a month-end process or for use when specific billable projects are completed. If that’s the case, you’re missing new opportunities for revenue management that are the result of a fundamental shift in how customers use your products and services.
When done correctly, billing systems directly affect profitability. But in order to realize the benefits, your billing system needs to match the speed at which today’s marketplace operates.
Q: Why ERP for Billing?
A: New Buyer Preferences
Here’s another (not so) secret: Changes in buyer preferences are disrupting traditional billing models. The ways in which businesses charge for their products or services has been upended by a new hybrid sales model that consists of:
- Transactional billing, where customers purchase goods and services at will.
- Subscription billing, which has long been the model for purchasing computer software licenses or streaming music for a fixed period of time.
- Usage billing based on consumption of a particular product or service.
- Anything as a service (Xaas), which allows organizations to offer value-added services with virtually any physical product they sell.
As with any market disruptor, this “convergence of billing” creates challenges and opportunities. Your customers are demanding the right products/services at the right price and the right time. Your competitors, meanwhile, are hard at work finding ways to offer just that.
Can your billing system help capture this emerging “on demand” market segment?
This is where ERP proves extremely valuable: by helping organizations effectively and efficiently charge customers for multiple services. It offers the agility to recognize any customer contact and – just as importantly – charge the correct amount for the services they purchase.
In a nutshell, ERP brings three-dimensional automation to your billing operations and vastly improves revenue management. This agile billing model also creates opportunities for expanded revenue because it empowers organizations to launch new, innovative marketplace offerings that elevate your customers’ experiences.
Human Resources ERP
‘Human Resources’ More Critical Than Ever
We’ve long posited that companies exploring automation through ERP do not face an “either/or” choice between software automation and employee productivity. On the contrary, ERP and other technologies designed to improve operational efficiency offer considerable benefits to the organization and its employees.
As such, ERP also offers an expanded opportunity to view “Human Resources” as an essential activity that derives considerable value for your organization. It is no longer as “just” an operational division of your enterprise.
System developers have taken note of this trend and are driving new advances in employee hiring, training, management, and retention through cloud-based Human Capital Management (HCM) software.
HCM is a fascinating topic all on its own – and one that we will surely delve into at a future date. But we must also realize a type of synergy between the two: ERP and HCM both alter the landscape in the sense that an organization’s people are no longer viewed as a “cost.” Instead, they are recognized as a critical investment in the future.
Consider one of the top challenges facing businesses today: finding suitable applicants to perform necessary job functions. In this capacity, Human Resources ERP pays dividends in multiple ways: (1) improving the performance & productivity of each employee on the payroll and (2) automating mundane – albeit, still essential – activities such as order processing, invoicing, expense approvals, and fulfillment.
Finding qualified workers is one of the top challenges affecting productivity growth. Frustrated, under-appreciated employees can be another. Perhaps it’s no coincidence, then, that frustrated employees rank among the top reasons that companies decide to proceed with ERP implementation.
However, those same employees also represent your best resource for identifying solutions to the challenges you face. Engage them. Listen to their ideas for creating a more productive work environment. Then, let your findings serve as the basis for ERP system implementation.
Always remember that the aim of ERP automation is to maximize productivity by aligning your people and processes. The key is discovering the balance that’s right for you.
How Small is ‘Too Small’ for ERP?
Most of today’s leading global businesses – from Apple Inc. to Johnson & Johnson – started small. It’s a good bet that the “next” Apple or Alphabet will rise from the approximately 250 million micro, small, and medium-sized businesses now operating around the world. And, rest assured, new SMB’s are rising every day.
It begs the question: What level of success must one achieve before viewing ERP as a luxury or a necessity? There are probably over 250 million different answers we could provide – because ERP success comes from configuring systems to achieve the specific goals of a particular organization.
We obviously don’t have time for that. So, instead, let’s offer two questions SMB leaders should be asking themselves:
- Is it more productive to save money by not investing in ERP?
- Are we missing opportunities if we delay or avoid ERP implementation?
Other questions leaders must consider relate to their organizations’ specific operations (e.g. Billing and HR) and how they fit into a rapidly-changing marketplace.
We’ve said it once and we’ll say it again: No matter their size and scope – organizations need to operate at the speed of the market in which they operate. From that standpoint alone, ERP can offer tremendous value for enterprises of all sizes. In fact, data shows that the average time needed for SMB’s to recoup their full ERP investment is just 27 months.
As organizations grow, they also increase their risk of the dreaded business system hairball. This non-integrated cluster of different software systems and contrary tech support adds unnecessary weight and delay to company productivity.
The bottom line is that lost productivity leads to lost revenue. Lost revenue results in lower profitability. In a digital age, successful organizations of all sizes continually seek and embrace operational efficiencies in all segments of their operations.