By Frank Hamelly, Founder and Principal, East Coast Dynamics

The economic news lately is encouraging.  Business activity, from real estate to demand for durable goods, seems to be trending upward for the first time in many, many months.  It appears the economy has bottomed out and we're about to turn the corner to recovery.  The question is this - will you be ready to capitalize on the increased activity?

In an economic downturn, layoffs inevitably occur, leaving many companies more lean than they've been in years.  While that's great when business volume is down, what happens when activity increases?  Are you gearing up for the greater volume?  What is your plan?  Will you do everything you can to make your existing staff more productive or will you just re-hire the heads that you had to let go during the recession?

Conversely, when business is booming, routine maintenance is put off because there are just not enough hours in the day to do it.  Will you go into the recovery still needing to perform that maintenance, perhaps putting it off until the next downturn in business?  How will that affect your users' productivity as business picks up again?

Here are five suggestions you might want to consider in preparation for the recovery:

1.  Invest in training.

Just a moderate amount of training can make a significant difference in the productivity of every one of your people.  ERP systems are complex.  Really good systems provide many time-saving tools that few users ever learn about because initial training during implementation is either woefully inadequate or is forgotten before users actually get their hands on the live system.  Recurrent training is an investment that will pay for itself many, many times over.

2.  Clean up transactional and master data.

Do you know how many open Purchase Orders, Sales Orders, Discontinued Item Numbers, Account Numbers, etc, your users have to wade through when looking up the data they really need?  Without a routine to periodically cleanse this data,  data lookups can become quite burdensome.  Why not take this relatively slow period to archive old data that is no longer useful? Your users will love you for it.

3.  Get your software up-to-date (version, service packs).

Again, what better time to perform your software updates than during a period of lower activity?  Users will be less interrupted as a result of updates and you'll have more time for testing the updates to ensure that everything works as expected.

4.  Implement modules or 3rd party apps you've been putting off.

Now is the perfect time to implement that new functionality!  Not only is it easier to implement because you have more time to focus on installation and testing, the productivity increases you experience may well eliminate the need to add heads as business volumes increase.  But, there are other compelling reasons to consider investing in your ERP system right now:

- Vendors will make great deals to encourage sales (ask them for their recession special)

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The major depreciation tax write-offs of the 2008 stimulus package were extended to the end of 2009

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Your competitors may not be investing in the future, opening an opportunity for you to take market share

- Financing is available, and rates are at historic lows

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New Capital Expenditures can:

  • Increase revenue
  • Reduce costs
  • Increase productivity
  • Build your brand, image, or franchise
  • Open new markets

5.  Assess and document your technical infrastructure and determine if any hardware upgrades are required.
Times of slower activity are ideal for performing your IT housekeeping.  Just as the machine shop down the street focuses on lubricating, adjusting, and cleaning their machines when business is slow, so should you be making sure your systems machinery is well oiled and tuned for the impending increase in business.

Now is a GREAT time to get your ERP house in order.  Make those investments in capital and intellectual assets.  Prudent investments will always provide handsome returns in the future.