I’m sure you appreciate the irony in the title. I spend $75 at the grocery store. They thank me for my business and tell me I saved $10 by using my club card. Of course, my checking account is $75 less and I never perceive $10 of value for them to be able to know exactly who bought the chocolate ice cream. So putting the irony aside, the real questions are:
- How do you save money when you are clearly spending money to purchase new ERP software?
- Do you ever layoff staff after the ERP implementation to offset the cost?
- Do your inventory levels go down?
- Does your customer satisfaction increase and bring you more business?
My experience: The key to reducing personnel costs through the implementation of an ERP system is to replace unproductive activities with . I’ve rarely seen companies layoff staff after the implementation unless the staff was outright hired to help with the implementation. Company personnel are like closet space and hard drive space. People busy themselves to use their available time. Before the implementation have your personnel:
- Document activities and time spent creating worksheets of information that should come from the ERP system automatically
- Document time to process invoices, pay bills, process payroll or complete month-end closing.
Then after the implementation is complete and personnel are confident of its use, review the same activities. Go into an iterative cycle of review, change, and measure. This should slow down your staffing hires as you monitor staff activities and personnel realize you expect staffing cost savings.
Reduced inventory levels and avoided stock shortages produce easy savings to track. Your stock valuation reports and rush shipment freight costs should show a steady decrease. With better receiving, stocking and shipping controls you’ll recognize decreased “shrinkage” – disappearing items from theft or damage. When you implement cycle counting within Microsoft Dynamics GP or use it to better track shipping methods, the new controls will change behavior and save money.
Measure customer satisfaction. Track the small wins when a customer asking about quantity on hand says: “Wow, that response was fast!” or, “I like your new web store." Take these comments and multiply the number you receive by 20 to estimate how many customers are impressed with your new service level. Conduct customer satisfaction surveys and offer compensation. I respond to surveys from my pet supply store to get a $3 discount. There are several web sites that offer surveys, so this small project won’t take much time or money.
If you routinely measure and review the effects of your new ERP system, you’ll continue to spot areas where you can make changes, recover your investment, improve customer satisfaction and increase sales. is a flexible tool that will truly save you money with your review, change, train and measure cycle.
Turn to for your Microsoft Dynamics GP support and training.
by Computeration, an
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