Your company’s ERP system is supposed to help you be more efficient—not hold you back.
An ERP system is supposed to help companies effectively manage their inventory supply chain, financials, vendors—the whole nine yards. Now, when it comes to ROI, of course there is a technical definition of ROI, and the technical definition is always important to keep in mind. However, to put it plainly, when we are focusing on “getting the most ROI on my ERP”, we are focusing on one thing: Value. How can I get the most value out of my ERP?, How can I purchase faster on my ERP?, and How can my ERP help my company be more efficient? are the questions you should be asking yourself.
When utilized correctly, an ERP system consolidates many business components into one, easy to understand dashboard. All purchasing, all approvals, all payments, all invoicing is in one place—perfectly organized. Right?
Yeah, in a perfect world.
Purchasing can be done through an ERP system, yes. But, is it always easy to buy everything you need with a click of a button? No. In reality, with all of the punchouts it takes to order a few simple items, it may take 3,4,5, or even 15 clicks to get a PO on the books. Requisitions and approvals can be done through an ERP system, yes. But are they always dealt with immediately by managers? No.
Are these inefficiencies holding companies back? Yes!
Again, ERP systems are great to have. They allow you to organize your company’s operations efficiently in a centralized location and purchase, approve, and pay for products your company uses on a day-to-day basis. However, many companies aren’t getting the most out of their ERP system because, sadly, they don’t know what they don’t know about maximizing their ROI and overall time-savings while using their ERP system. The good news is we have a few tips for companies who find themselves in the “How can I better use my ERP system?” boat.
Synergy between all areas of your business is what every company—from the top to the bottom—should strive for. Here are 3 ways in which you can get the most ROI out of your purchasing process through your ERP system:
Maximizing ERP ROI Tip #1: Curtail your punchouts
If your company is like the majority of companies out there with an ERP, chances are that you have anywhere from a few to a few hundred punchouts for your online vendor websites.
First of all, what is a punchout? A punchout is simply a connection which, in website terms, is a button companies click on to get from their ERP to a vendor’s e-commerce site. Now that we’ve got the basic definition down, let’s get one thing straight: Companies with multiple punchouts for multiple vendor websites are wasting time purchasing individual products from individual vendors over, and over, and over again.
This is essentially what the process looks like if you are spending too much time dealing with multiple punchouts in your ERP:
Click “Purchase” → Find your supplier’s website → Click “Connect” → Search for the items you need → Add the items to your cart → Click “Checkout” → Click “Submit Order” → Go back into your ERP → Create a requisition → Fill in requisition → Submit Requisition → Find another supplier’s website → Click “Connect” → Search for the items you need →
… and the list goes on. We’re talking hours and hours of mundane manual processes that are—quite frankly—completely unnecessary and an inexcusable waste of your employees’ time and resources.
If that process sounds like your company’s current purchasing process through your ERP, that’s okay. You probably haven’t been able to think straight with all of the headaches you must have on a daily basis. On a serious note, the only way around this never-ending ERP punchout process is to have one punchout for all of your company’s purchases. One punchout for all of your purchasing can sound like the holy grail for your ERP system, but it’s possible.
Imagine—a purchasing process that looks like this in your ERP:
Click “Connect” to one vendor’s website → Add items to your cart from a one custom catalog → Click “Submit”.
After you click “Submit”, all requisition data is auto-populated and purchase orders are sent straight to the vendor themselves upon approval.
As far as one punchout maximizing the ROI of your ERP, let’s recap how having only one punchout can increase your company’s productivity, growth, and profitability:
- Time savings — The time it takes going back and forth between vendor punchouts, adding items to individual vendor carts, and manually filling out requisitions.
- Money savings — You’re paying employees to do the same job—that should only be done once—15 times.
- Product Cost Savings — By using one, custom catalog on a site that finds the best product prices for you, you KNOW you are getting the best bang for your buck on every single purchase.
As far as maximizing the ROI with your ERP, the motto is this: The simpler you make your purchasing process, the better. One punchout is the answer to how you achieve that.
Maximizing ERP ROI Tip #2: Automate your requisitions.
True to the theme so far, your ERP system may not be as functional as it can be. Your ERP is only as efficient as you are; your efficiency as a company is only as efficient as your ERP—whichever way you want to spin it.
Clearly, for the purposes of this article, we are focusing on how to improve your company’s purchasing process through your ERP. One of the main issues that take away from a company’s ROI with their ERP is the time they waste during the purchasing process. Which part tends to take up a lot of time? Requisitions.
Ah yes, “Requisitions”: a fancy (yet slightly intimidating) word that more or less means a piece of paper that must be filled out to formally request a purchase. In an ERP, it is common that filling out a requisition is a completely separate process than clicking “Submit Order” on the vendor’s site. This process, as one can imagine, of purchasing many different items on many different vendor sites and filling out corresponding requests for products to be approved is time consuming. Hours and hours every week can be dedicated to manually filling out requisitions and keeping track of them all simultaneously.
The unfortunate part? No company, no matter their size, is immune to having an inefficient requisition and purchasing process. Take WeWork for example—a multi-billion dollar commercial real estate and coworking company in which their purchasing managers spent 30% of their time shuffling through manually filled requisitions and trying to keep them organized. As one can deduce, Purchasing Managers being hung up on requisitions 30% of the time is not good for growth—especially not for a globally expanding company such as WeWork. Although using an ERP, WeWork “needed an integrated, easy-to-use platform to really take [their] procurement to the next level.”
“Negotiatus has eliminated the confusion of the requisition process” -Kyle Ingerman, Senior Manager of Finance Transformations at WeWork
By having an all-in-one purchasing platform that directly integrates with ERPs, your company can purchase all of your products on one vendor punchout and experience the time-savings of automatic requisitions—filled out the second you click “Submit”. Kyle Ingerman, Senior Manager of Finance Transformations at WeWork, states that “completing requisitions with Negotiatus and having those requisitions transmitted back [into our ERP] is a much simpler process than before. Negotiatus has eliminated the confusion of the requisition process.”
Maximizing ERP ROI Tip #3: Click “Submit” once.
This tip is along the premise of having an all-in-one, all-encompassing purchasing platform available with one punchout on your ERP.
Let’s paint the picture very clearly to show how your company can purchase more efficiently on your ERP:
With Negotiatus, all of your purchases can be done with one punchout, your requisitions are automatically filled out, and your purchasing and management teams can focus on more important things—like what they can do to help grow your business. Don’t waste any more time filling out paperwork, filling out individual and error-prone requisitions, approving individual orders, or clicking “Submit” on 17 different vendor websites just to order new supplies for the office.
When you click “Submit” on Negotiatus, the manual elements of your ERP purchasing process are eliminated. The ROI on your ERP skyrockets by allowing your employees to purchase all of the items they need from one vendor site, freeing up time for them that they would otherwise spend on purchasing individual items, and ensuring the accuracy in your requisitions.
One punchout. One vendor. One order. All of your purchases.
Strong, sustained company growth and an efficient ERP purchasing process are synonymous with each other. If you want to make the most out of your ERP purchasing process, schedule a demo with Negotiatus today!