Data Duplication: The Impact of Using Multiple Systems and Spreadsheets
Take a minute to consider how your employees go about tracking and processing information within your business’ current IT architecture. Do your accountants use a separate system from your sales team? Is your purchasing far removed from your sales process?
If this sounds familiar, it's likely you’ve been searching for—or at least should be searching for—an ERP system that uses a single data source. Such a system allows for an easier transition between departments, improving efficiency and accuracy.
Older systems often require redundant data entry, leading to inaccuracies and wasted time. Additionally, running your business on multiple systems is like asking for an IT nightmare of chaotically connected data channels. Using separate programs for customer management, ordering, and accounting is a serious drain on the resources of any business, and for small to midsized businesses, this inefficiency is often more than they can afford while trying to compete with the big guys.
With a series of front end systems running individually, IT trouble is inevitable. When inaccurate sales data goes to ordering, or inaccurate data gets to your accounting team, problems can arise in budgeting, payroll, and purchasing. These distinct applications are often installed at various points in time over your business’s lifespan, and lead to a lack of visibility in the supply chain, as well as mounting IT costs that can hold a business back from reaching growth goals.
How Did You End Up in This Mess?
With rapid growth comes the need for rapid IT expansion, and some companies may find themselves locked into a complicated maze of business software. Companies often start by purchasing an accounting software to aid in the management of their bookkeeping. Next, companies may adopt a sales/CRM system to help with sales and customer support, before looking at ordering and inventory management, and often purchasing yet another piece of software or sticking to the disaster that is spreadsheet inventory management.
When businesses evolve these systems over time, they can often find themselves in a poorly planned mess of haphazardly connected systems, barely capable of managing present demand, and effectively barring companies from growth. In the competitive world of business, the last thing you need is a mess like this holding you back.
Cleaning Up the Mess
So now you have three or four different systems handling as many individual business processes, and you begin to wonder: how on earth an I going to clean up this mess? The answer is quite simple: replace your four individual legacy systems with a single source ERP system that is capable of handing the tasks of all four silo-ed systems.
More often than not, a single system handles these tasks better. Having one location for all of your business information eliminates the need to re-enter data from one system into another, a process that is both time consuming and vulnerable to human error.
By implementing an automated workflow, you are freed from a number of mundane tasks, opening up time for you and your staff to focus on more important work. The impact of this unified system can be massive. With an all-encompassing ERP, data is available to the people that need it, meaning data will no longer be held within one department and only accessible through its personnel. This holistic view of your business allows you, your sales and your service team, access to all pertinent data from across all departments, allowing for a richer and more informative customer experience. This accessibility of information empowers you with the ability to make stronger business decisions as well, as data from all departments is delivered in real time.
Your business system should help you be more profitable, competitive and promote the growth of your business. Unfortunately, thousands of businesses have already poured money into a legacy solution that is familiar but restrictive, and are thus hesitant to invest in a new unified ERP. What these companies fail to understand is that the benefits of switching far outweigh the benefits of familiarity, if that familiarity comes riddled with inefficiencies and expenses.
The Benefit of a Single Source ERP System
Most successful companies recognize a simple fact: your employees are the most valuable assets at your company, but they are also one of your greatest expenses. That’s why it's vital that decision-makers ensure they have the tools necessary to perform. A single source ERP system goes a long way toward this end, especially when employees are educated and trained to use it properly.
Boosted Efficiency and Productivity
There are a number of processes in the daily operations of a business that you are likely to encounter, including invoicing, fulfillment, and financial consolidation. The automation of these processes opens up your staff to more productive activities that help in the development and growth of your company. Using a single source ERP, all of your data only needs to be entered once, but is made automatically available to all relevant processes. This automation in the movement of data eliminates the need to manually enter it into multiple systems.
Furthermore, because an all-encompassing ERP system draws its data from a single source, staff from all departments of the company have access to the same information in real time. Service staff working with your customers should have access to all information a customer might need in real time so that whether they have a question about shipping, payment, or service, having access to a single source makes this information available to the staff that need it, making for more productive staff who waste less time searching for pertinent information.
Real-Time Visibility and Reporting
By implementing a single source ERP system, you are opening up your business to the world of visibility; they will be able to get a holistic view of your business processes at any time, while drawing information from every aspect of your business. Additionally, all employees benefit from improved visibility of information that is relevant to their daily tasks.
This real-time visibility is vitally important to the decision making process. Drawing data from a number of sources and spinning that into a cohesive report was a difficult task, often leading to delays in report availability, or errors. However, when information from any stage in the business process can be accessed in real time without the need to throw resources at data extraction, information is displayed faster, and more accurately. When the time needed to consolidate data is eliminated, you have more time to actually analyze your report, and find the best next step for your business.
More Consistent Data
Not only does a single source ERP system result in gains for efficiency and visibility, the elimination of multiple points of data entry has the added benefit of ensuring the integrity of your data is secure. The risk of human error is ever-present, and each point of data entry into the system should be considered a point of potential failure. By drawing information from three spreadsheets and entering the same information three individual times (sales->purchasing->fulfilment) the potential for inaccurate data is increased three-fold.
Some companies that stay locked into a legacy system eliminate a few of these points of manual entry by implementing something called batch interfaces, which eliminate some of the manual imputing and automate the process to a degree. While reduces the problem of human error, these interfaces are not only expensive to build and test, but also incredibly difficult to maintain—the slightest change to one system often necessitates the need to change the batch interface. This instability can sometimes render the interface unusable, meaning that its back to the old ways of risky data entry. So before you further lock yourself into your legacy set up by throwing yet more money at it, consider how much money you’ve spent on it to date, and how much more it would take to get it to the level of consistency seen in a single source ERP system.
Less Risky and Expensive IT
In a multi-source solution, you have to deal with a multitude of vendors, all with individual costs, and often different business models. The added need to deal with multiple vendors is not only a headache, but the costs of running multiple systems can get away from you fast, and you may find you end up paying more than you would expect. With a comprehensive ERP system, the total cost of owning the system is known upfront, making it easier to plan for your business’s future. The benefits to your wallet don’t stop at the possibility of hard savings though, as the efficiency boost we’ve explored earlier can also mean getting more bang for your buck come payday because your employees have more time to work on growing your business and increasing your profits.
Perhaps less obviously, savings can also be found in the hiring process. These savings come as a result of a simpler, less time consuming training process. This comes about because rather than spending time instructing new hires on how to use each individual system, the features of a holistic system makes it so employees are only required to learn a single system. This system not only has a consistent look and feel, but also a degree of automation that saves the new user the need to learn where and how to move data between systems.
This traditional method of running your business on multiple systems also carries with it exorbitant maintenance fees and a high level of risk. This inherent risk in both the stability of your system, and the constant risk of human error can mean huge losses for your business if you find yourself with downtime during peak business hours due to integration problems, or sending out the wrong shipment due to human error. A single source ERP system can thus often result in substantial savings due to its huge risk reductions on both fronts. Because the single source model eliminates the need for custom batch interfaces, implementation time can also be reduced. In addition to this, single source ERP systems are often offered as software as a service, meaning that risk and cost of IT maintenance is further reduced with the support of the ERP provider.