The Global Economic Crisis facilitates ERP Projects

Under the global economic crisis, many enterprises all are compelled to enter the unprecedented 'ice age' period. Undoubtedly, this is a great challenge to various businesses while this has also brought negative effect regarding the promotion of ERP software. In beginning of the year, many enterprises originally planned to invest on ERP implementation project. However, most of them have finally been postponed or even called off due to the financial tsunami. Apparently, the economic downturn only shows negative effects to ERP, but it actually brings up great positive impacts on ERP system indeed. What are they?

1. The Practical Features in ERP System are to be Fully Used

Since the financial tsunami has arrived, there are subtle changes in the current market trend. One of the obvious changes should be the relationship between the enterprises and suppliers. Under good economic atmosphere when the enterprise places their order to suppliers, they do feel worried about if the suppliers are able to deliver the goods on time. Even though, enterprises also clearly know that it is off chance for suppliers to deliver the goods promptly and that is why they seldom control their delivery schedules. Unfortunately, since the arrival of the economic crisis, many manufacturers has ceased their businesses, or even closed down. At this time, when the enterprise places orders to their suppliers, the goods may be delivered month beforehand due to decrease in order placement to suppliers. This has initiated two questions......

A: Enterprise is not able to receive payment from customers (The enterprise’s customer will not receive and pay for the goods until the actual delivery date);

B: Enterprise needs to pay for supplier earlier than expected so not to breach the payment terms.

The enterprise has not received their customer’s payment while they need to pay for the suppliers causing cash flow problem to the enterprise. As a result, many unused features such as good delivery management, resources management etc, which have been existing in the ERP system, are to be switched on and fully used to cope with economic trend,. As we can see that the economic crisis actually facilitates the use of these non-discovered functions.

2. The More Time Spent on the ERP Project, the More Efficient in the Implementation Process

As we mentioned above, under the impact of the unprecedented financial tsunami, the number of order placement has been decreased significantly. With reduced orders, but sufficient manpower, the staff has quite many spare hours to participate in the implementation of ERP project. In other words, the devotion of staff is enhanced and thus improving the efficiency of the implementation process. In the early stage of ERP System implementation, the preparation of raw data, which to be input to the new ERP system, should not be despised. As staff relatively gets more spare time, they can concentrate more on raw data preparation step. As a result, the quality and accuracy of the prepared data increased. Hence, under the facilitation of the environmental factors, the overall involvement of ERP project is enhanced and the efficiency of ERP implementation is definitely improved. To summarize, although this economic crisis have brought heaps of negative effects to business, it does facilitate the ERP implementation project which is unexpected. Therefore, if you can find out the turning point, perhaps it can lead your business to another breakthrough!