Upgrading to new software, such as an ERP solution, can sometimes seem like an added expense you don’t need to budget for right now. After all, your existing distribution software works well enough, right? What you may not realize is that the cost of outdated distribution software can really add up. Holding on to legacy solutions can end up costing you more overall than upgrading to a new distribution ERP solution. Let’s see how.
You’re racking up costs related to IT.
With older, legacy systems, IT typically books a high volume of work hours, for one. Licensing fees for outdated distribution software can also pile up, too. When you upgrade to distribution ERP, you can save on IT staff and licensing. In fact, one pharma distribution company that upgraded to ERP saved $120,000 each year on these IT costs.
Order processing takes hours instead of minutes.
With outdated distribution software, your processing times can lag. This not only costs you return customers but also increases the burden on your customer service department. By transitioning to a new, distribution industry focused ERP solution, you can slash order processing time, keeping customers happy and keeping them coming back.
You’re over-staffing during your busy season.
When things are unorganized and unproductive, you may pile on staff to make up the difference. This is one secret cost of outdated distribution software. Inefficient workflows make you think you’re understaffed when you’re not. With a new ERP solution in place, you might find yourself able to get through the busy seasons with your regular staff or with significantly fewer temp hires. One rug distribution company that upgraded to ERP avoided hiring 6 new order entry employees once the busy season came around, saving them some significant dollars.
You’re spending a lot on replenishment.
Replenishment spending is necessary, but it doesn’t need to be sloppy. When inventory management is inefficient, it’s easy for things to get out of hand and for replenishment spending to get out of control. By implementing the right ERP solution at your distribution company, you can reduce replenishment spending by as much as 15 percent.
Those are just a few of the startling costs you can rack up when you stick with an old distribution solution. Want to learn more about how you can save with a modern ERP? Let’s talk!
