Business process improvement and better management are critical benefits of an effective ERP system. But it is also important to think about the larger group of stakeholders and different constituencies, external as well as internal. The entire value chain is significant to enhancing a business, increasing market share and improving both short-term and long-term profitability. Tying business processes from end to end in the value chain reduces overlaps in processes and time, bringing greater efficiency.
Small and midsize companies’ major customers typically have performance requirements that make an effective ERP system essential for obtaining and retaining business. It is critical to understand customer requirements and an organization’s points of intersection to manage customer expectations. ERP systems enable a business to manage customer requirements while meeting the full spectrum of customer needs. For businesses with simpler customer requirements, tracking order status, inventory, and projects can set the stage for new business acquisition while improving business performance.
In a similar way, a company’s suppliers may be looking for higher levels of engagement in a more automated way, perhaps even with price incentives. Being able to collaborate and work through issues is of paramount importance; tying that capability to the modern ERP system makes it much more efficient for both the buyer and the supplier. Being able to provide information essential to the success of both suppliers and customers will help strengthen relationships as well as business outcomes for all participants. IDC believes that supply chain pressure and consolidation will likely make the information gathered by ERP systems increasingly valuable (and worth compensation) not only to a company but also to the suppliers working with that company.