With ERPs Business Size is an Outcome, Not a Function

Advertising is considered one of the most important marketing activities in organisations and to that effect, there are many profound things that have been said about it. For example, ‘Doing business and not advertising is like winking at a girl in the dark. Only you know what you’re doing’. A second, ‘Good advertising does not just circulate information. It penetrates the public mind with desires and belief.’ However, my favourite is this one: ‘Companies do not advertise because they are big; they are big because they advertise.’ In this way, business success can in one way be described as an outcome of communicating the value proposal to customers – not the other way round, of asserting that the value proposal is communicated because the business is a success.

How right it is! Now, onto my point, businesses should view enterprise resource solutions in the exact same way. Businesses do not run Enterprise Resource Planning Systems (ERPs) because they are big; they grow big because of them.

The ‘Iron Law of the 360 Derivative’
There are many instances in business where companies run blind. It happens all the time. Either, decision-makers have poor knowledge of how individual units are running in the organisation…or as in the majority of cases, the connection between the peculiar units are not adequately made.

In manufacturing, for instance, sales are influenced by marketing, as production planning is influenced by sales, materials and inventory by supply, workforce planning by personnel development, etcetera, and these are just many of the strings connecting the moving parts of the enterprise. All day everyday, small actions are influencing big movements in the company and market, yet some companies choose to fly in oblivion to them.

Enterprise resource planning systems therefore become the gel that links everything together in order to promote decisions which are well-informed, strategically and logically as well as being effective.

Unfortunately, this ‘360’ concept is not limited by size – all and every company needs information systems which guide decision making because at the start of the day and the end of it, the drivers of business are making calls on action to drive profitability. Business is to decisions what atoms are to matter. It’s made up of a combination of many of them.

Is Information really the currency business grows on?
Frankly, yes. Information is everything because it’s what good business rests on. It’s not just the quantity of information, it’s the quality that sounds more to effective business. The best systems for businesses ensure that, through integration, all aspects of the enterprise are represented in the knowledge a business generates. Like, how a strategy drives sales and changes marketing content, how long-term investments affect profitability and how overstocking one material affects production.

Information is the tune in which prosperous businesses sing. There is a misconception that sophisticated systems are needed in order to have an apt comprehension of business flow. But, for small to medium enterprises, the complexity is relatively lower to the businesses. Simple but powerful information systems with integrated business views and effective business reporting serve the purpose.

ERPs are not an indicator of performance. They are a driver of it.

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