5 benefits of implementing an ERP system for your business

Reason 1: Connecting the different functions of the business

“If you’re relying on Excel spreadsheets, post-it notes and human memory to manage processes, your company won’t be able to tackle big digital projects,” says Desjardins.

If you don’t yet have an ERP system, there are good reasons to consider one. It serves as a digital foundation—a central system that manages the company’s information. Spreadsheets simply aren’t as effective for managing day-to-day operations.

“Often, departments in the company, such as purchasing, manufacturing and accounting, list their data but their systems don’t talk to each other,” says Desjardins. “To access data from another department, you have to request that it be extracted into an Excel file: this is not a streamlined or real-time process. Having a backbone will connect the various departments in the company.”

When implementing an ERP system, you need to factor in various costs for the first year to set up the software, configure it, and integrate it with the company’s various databases—not to mention staff training.

Reason 2: Reducing waste through data

Migrating to a centralized IT system makes a huge difference on a day-to-day basis. “Single data entry by all departments saves time and prevents errors,” says Desjardins.

Once the system is in place, however, patience is required. Often, the company’s management does not see much improvement after a year,” says Desjardins. “You have to give the system time to operate within the company and to extract the relevant information.”

Operational insights deliver tangible benefits, he adds. When metrics for different machines are available, it becomes possible to accurately determine various factors, such as the normal wear and tear on a part. “For example, you may find out that one drill bit can drill 650 holes, not just 500,” says Desjardins.

Reason 3: Better resource planning and increase efficiency

At first, the influx of all this information may seem overwhelming for the company.

According to the BDC business advisor, this is just the first step toward determining which data is useful and how to use it. “For example, we can know exactly when to change parts before they break and optimize equipment performance by adjusting its speed, pressure, temperature, etc.”

The data collected by an ERP system can also serve as the foundation for artificial intelligence tools.

“Artificial intelligence enables us to program machines to make production as efficient as possible and, most importantly, to avoid downtime.”

A company can also easily adapt in the event of an employee’s absence, or if an order arrives early or late. “The system allows us to automatically reassign tasks among employees to meet production deadlines and immediately identify when machines are available to ensure optimal use of resources” says Desjardins.

Reason 4: Technology to attract the next generation

Beyond improved productivity, there are additional benefits to investing in a centralized system. In particular, attracting the next generation of talent.

“When there are staffing shortages, a company that does everything manually with Excel spreadsheets and Post-it notes finds it difficult to attract and retain young people who are used to doing everything in a digital environment,” says Mr. Desjardins.

Reason 5: Making more proactive decisions

Having real-time access to data from the company’s various departments is essential for undertaking more ambitious technology projects, such as creating a digital twin or integrating artificial intelligence into decision-making.

Then, as the company progresses in its digital transformation, it can add information about its suppliers and customers.

“The more data we have on the various stakeholders, the greater our insight into the issues,” says Desjardins. “This allows you to run your business with a good idea of what’s coming rather than operating in reactive mode. Because the ultimate goal is not to buy technology, but to achieve results.”

Tips for managing change

It’s essential to have a solid change management strategy for this type of project. This starts with upfront training so that staff members feel they’re part of the change process.

“Management is important, but it takes people who work on the floor with a different view of things who can tell you if something isn’t working on the floor,” says Desjardins.

Its also important to train staff members to show them the benefits of the new tools that have been selected and how to use them. We must also always keep in mind that some people are more reluctant to adopt digital advancements than others.

“Many company managers think that everyone will use the new tools immediately. In reality, many will avoid having to use them by dropping in on coworkers and taking the opportunity to give them information on paper. Someone needs to lead the digital transformation in the organization and monitor it closely to ensure that it is successful.” 

Next Steps

Implementing an ERP system is often the first step toward a more strategic use of data. Our LIFT program can help you plan your company’s digital transformation and maximize its benefits.