Post By Charlie Heywood on May 7, 2020

Why a downturn could be a good time to invest in ERP


Times are tough with uncertainty caused by the coronavirus pandemic and an impending global recession weighing heavily on the minds of executives. 

But even dark clouds can have a silver lining. A downturn can present an excellent opportunity to invest in the future and carve out further differentiation from your competitors. It may seem like an audacious decision to invest in ERP during a recession, but there are, in fact, a number of compelling reasons to consider it.


Reduce costs

During a downturn, cost-control becomes ever more critical. A new ERP can deliver benefits by automating manual processes, eliminating activities that don’t add value, and getting more results from the same people and resources.

Better intelligence to make informed decisions

Implementing a new ERP can arm you with the business intelligence and integrated reporting you need to assess the situation, understand the implications for your business, and make the right decisions.

Grow revenue

Declining revenues combined with fixed costs is a recipe for disaster. However, implementing a new ERP can give you access to enhanced CRM capabilities. A strong CRM empowers your sales team to nurture existing relationships, improve key account management to retain major customers, and generate targeted leads to win new business ultimately.   This is valuable throughout any business cycle, but in a recession, it can mean the difference between ruin, survival, or flourishing.

Improve customer service

A downturn is no time to let up on tools that make it easier to serve your customer base. You should focus on providing better service than ever to retain customers. An ERP system helps companies deliver goods to your customers faster; it improves productivity and offers inventory control. A modern system also fosters better customer communication through reliable lead, opportunity, and quote tracking. All these elements drive better customer engagement resulting in client retention.

Increase operational efficiencies

If implemented effectively, an ERP can improve efficiencies such as tightening control of financial transactions, reducing errors, providing up to the minute information, reducing paperwork and duplication by automating tasks, and introducing workflows based on conditions related to your processes.

Negotiate a better licencing deal

The downturn may affect major software houses, and it’s not unknown for vendors to turn to more aggressive pricing to try to maintain revenue in the face of reduced demand.

Improve compliance

Hardly any industry is escaping increasing compliance demands. New regulations add to the burden of running a business during already trying times.

SAP Business One can help you automate tasks, reports, and checkpoints to ensure compliance with standards and regulations for your industry. In addition, robust and customisable reporting functionality makes up-to-date financial and process-based data available to anybody who needs them to achieve and maintain regulatory compliance.

Better utilise staff

Implementing a new ERP system requires a major commitment of time, money, and people, and can cause significant disruption to client delivery.  Many companies find they have spare capacity in a downturn, with weaker customer demand translating into lower staff utilisation. So, if you use this time wisely, you can iron out any teething problems with minimal business interruption, onboard, and train staff thoroughly and have a new system working at optimum in time for the economic recovery. 


Investing in new technology to manage resources during a recession may seem counter-intuitive. However, automated enterprise resource planning can result in efficiencies you’d never achieve with your conventional company practices. And it’s those very differences that could make or break your company during difficult economic times.



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