Going Green with ERP

by Sheldon Kralstein
When we think about “Going Green” we tend to visualize conservation, protecting nature and our fragile environment.  Businesses and technology play a very important role in the Green initiative where the definition can be extended to include:

  • Reduction of operating costs resulting in increased profits
  • Gains in efficiency and productivity
  • Improved customer service
  • Reduction of environmental stress

A recent study shows that a typical company with 100 employees consumes and handles 3 million sheets of paper each year resulting in the harvesting of 137 trees. The cost of generating and handling these documents consumes time, labor, filing and storage, shredding, garbage pickup and removal, as well as recycling or disposal. If we reduce our use of paper by 25% the overall savings to businesses and the impact on the environment would be profound.
ERP software systems are powerful business solutions that can play an important role in the reduction of paper, streamlined operations, and environmental conservation. This article presents several concepts that any business can apply. These cost saving measures include:

  • Electronic invoicing and automated collections
  • Electronic document management
  • Reporting

Modern ERP billing and receivables software can reduce paper by using the Internet and email to electronically invoice customers. By setting up recipient contacts and email addresses in the customer master file, invoices can be electronically generated and emailed directly to the appropriate contacts. In addition, file copies are no longer necessary because the invoices can be saved indefinitely within the ERP system and viewed, printed, or resent on demand. This represents a savings of paper, envelopes, postage, and handling costs as well as provides almost instantaneous delivery to the recipient resulting in an improved DSO (day’s sales outstanding or faster payments).
The same concept applies to statements and reminder notices.  The accounts receivable module within the ERP software can process periodic statements and/or reminder letters to designated customers and electronically email them to the appropriate individual. These systems even have the ability to change the message within the reminder based upon the number of days past due.  This helps the collection process by reducing the number of telephone calls while expediting payment. If the customer requests copies of outstanding invoices they can be retrieved from the ERP system and emailed as well and therefore eliminating or reducing these manual tasks.
Electronic document management permits you to store and manage transactional and business related documents from within your ERP solution. Going Green is about reducing paper and the need for physical filing while improving productivity and customer service. You can store, tag, and retrieve many different types of documents including: drawings, blueprints, material safety data sheets, photographs, packing slips, customer or vendor delivery receipts, vendor invoices, shipping and receiving documents … etc.
Electronic document management saves time and money by:

  • Reducing labor expenses of filing, organizing, retrieving, and hunting for misplaced documents
  • Reducing the costs of printing, faxing, and copying
  • Retrieving documents required to resolve customer complaints or issues
  • Streamline the approval process for purchasing and accounts payable
  • Having product photographs, drawings, blueprints, and instructions at your fingertips

Another significant area of paper consumption is in reporting.  You might recall the days when piles of green-bar paper reports were everywhere in sight.  With today’s reporting and analysis tools paper reports can be reduced by as much as 80%. ERP systems can maintain almost unlimited amounts of historical data and transactional information.  Using powerful analytical and reporting tools, users can slice and dice information and view tabular and graphical results on-screen without ever requiring the use of paper. More formal reports and financial information can be produced, viewed, or even emailed to one or more recipients. The recipient can than view the report on-screen or print selected portions that are of interest to them.
The latest trend in ERP software is to present information on a user’s desktop. Important information and key performance indicators specific to the user’s job function can appear in real-time in the form of tables and graphs on the desktop and available at all times. This eliminates the need to find information or run reports to view important information.
Technology continues to play a vital role in increasing productivity, reducing operating costs, improving customer service, and providing a tangible competitive advantage. Businesses with the desire to grow and prosper need to leverage and take full advantage technology can offer and as a bi-product conserve our environment and its natural resources.

2010-07-15T08:15:04+00:00 July 15th, 2010|Industry Insights|Comments Off on Going Green with ERP