You don’t have time to sift through numerous reports each month to determine the health of your business. Instead, you should use the automated alerting capabilities within ERP to know when operations are falling out of range.
Your ERP system should monitor and measure ─ in real time ─ the activities and metrics you’ve established to dictate business health. When everything is proceeding within predetermined “success” ranges, you and your staff should not hear from your ERP. Similarly, when activities fall outside acceptable tolerance levels, your ERP should scream for a response. Together, these represent ‘managing by exception’ and keep you focused on the critical aspects of your business.
Focusing the Business in Real Time
Relying on monthly reports from ERP hurts your business in two ways:
- If a critical business activity falls out of range the first week of the month, you can’t respond until 3-4 weeks later.
- Reports don’t always surface the ‘ah-ha!’ findings, leaving you blind to what’s hurting profitability.
Automating Business Rules
Modern ERP systems allow you to easily establish a set of business rules to monitor, be alerted when those rules are broken, and enforce actions to bring activities back into acceptable ranges.
For example, you want to enforce a rule that your salespeople can’t offer discounts greater than 15%. Whenever a sales rep executes a quote using the quoting tool, the system requires the input of any applicable discounts; if a rep enters a discount value greater than 15%, the ERP sends an alert to a predetermined list of recipients, such as sales management, the CFO, etc. In addition to sending a real-time alert, the ERP may also be tuned to require specific action from the recipients. This way, your ERP system manages by exception and does so in real time.
You can establish rules about the various standard documents within ERP, including deliveries, returns, sales quotes, sales orders, and more. Then, simply name the rules to make your people adhere to the criteria as acceptable deviations from discount, budget, and gross profit.
Modern ERP is highly flexible and allows almost any rule you deem important in your unique business environment. For more information about managing by exception, contact us today.