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Is your Food ERP Solution Delivering a Strong ROI?

Is your Food ERP Solution Delivering a Strong ROI?

Introduction to Food ERP

Like any business, a food business should also invest in technology, for example, an ERP, in order to reap dynamic benefits for the business.

Using an efficient ERP, instead of manpower, results in more time and effort in entertaining customers, access to their customer information even offline, automated operations, increased efficiency and in return sales, etc. All these added benefits are all puzzle pieces of a larger picture i.e. greater return on investment.

On the other hand, having an old type of ERP system could prove to be a handicap, as an ROI system for your business. As this system may not bring as much value as it is decapitating the business line by not delivering the desired results.

Often such ERP’s are notorious for their inefficiencies and for their lack of features such as no business insights etc.

Today's businesses need to have their operations on fingertips and should have robust solutions to deal with the unseen challenges of the digital age and maximize their annual revenue.

That is why these fundamentals beg the question: is your food ERP solution delivering a strong return on investment?

Why?

An ERP is a Business Intelligence solution and adds value to an organization. Despite being aware of having an efficient ERP system, extremely few businesses invest in an effective ERP solution because of the myths that it's an investment without a result.

On the contrary, it cuts down on a lot of labor costs and helps you remain abreast of operations such as inventory management, CRM, accurate reporting and analytics, staff management, and a lot more aspects of your business.

In a post-pandemic world, business owners need to have advanced reporting features, accurate analytics and KPIs related to manufacturing and production and remain abreast of the overall business trends to minimize the effects of any other global challenges they may face in future.

Cloud-based or Hybrid ERP solution aids you in storing more data, cybersecurity, and advanced technological options to run your business. As on-premise ERP solutions often need maintenance and are prone to damage and not future proof.

How to determine the need for food ERP?

It is hard to say goodbye to old practices when you have had them around them for decades and rely on technology. But investing in an efficient ERP system can pave the way for business success, profits increased manifold, and most of all keeping up with the digital tide.

If you are afraid to let go of your old ERP system then you must determine the ROI it has generated over the years versus its annual or monthly cost.

For determining the cost of the present ERP you must calculate:

License cost: it may be annual or monthly or transactional as per the company policies.

Installation: it has to be installed by professional developers and should not be handled by amateurs.

Consultancy: you need to have a consultant regarding your ERP as it is tricky to implement.

Training cost: staff or key users need to be trained to use the ERP system safely without damaging it.

Upgradation: as technology advances, so should the devices. Upgrading your ERP is essential to enjoy the benefits of its promises.

These costs should be calculated in contrast to the value your ERP brought over time. Now, judging the value can be difficult as this is not an exact science. You need to undertake extensive record reading of history, operations, the savings or profit it brought, reduced or increased labor cost, future planning in the form of analytics, and much more.

By comparing the before and after scenarios you can easily evaluate its advantages.

The factors involve but are not limited to:

  • Warehouse administration
  • Labor cost
  • Operations
  • Procurement management
  • Waste reduction
  • Efficiency of production
  • Staff and time management
  • Improvement in data integrated across businesses.

You need to deeply analyze the data from these key factors and conduct extensive research to make the right decision. You should spend a considerable amount of time and consulting relative stakeholders in mulling over these factors as investing in an ERP is a one-time deal and should be closed wisely.

By calculating these factors you will get a small percentage of your return on investment.

The formula is:

ROI= [(Value of Investment - the cost of investment) / Cost of Investment × 100

The more efficient your ERP solution is the more it will be easier for you to calculate your ROI based on business intelligence features and data analytics techniques.

Time to move to advanced ERP solutions:

Once you have calculated your ROI it will be easier to make a decision and implement it across your business.

The food industry transformation means the robust advancement towards efficient services, increase in value, and powerful innovative features which handle your business intuitively while giving you space for more growth.

Latest software practices enable you to stay ahead of your competition and become a leader in your unique industry.

You should look for a different ERP system if the following factors are proving to be a hindrance in enjoying greater ROI:

On-Premise system: in today's world, on-premise systems prove to be more detrimental for a successful business. Cloud or Hybrid solutions provide more advantages and options to run your business on better lines.

Dedicated food ERP: a one size fits all may have been useful in the past but a dedicated food ERP with customizable options is the present need especially in the pandemic-stricken world where people are more conscious of technological practices.

Limited vendors: in the past, the food industry was limited to particular regions and did not have global operations unlike today where organizations are operating successfully across the globe and can help businesses thrive such as Folio3 ERP software.

If you are looking for robust changes in the way you work and need efficient systems for your ERP then look no further as Folio3 has dynamic solutions for farmers and the agriculture business.

Sajid

Sajid

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