6 reasons why the automotive sector needs more intelligent ERP solutions

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ERP solutions automate business processes, eliminate human-induced errors, and make automobile companies ready to compete in the market. 

Businesses are always trying to find new ways to improve efficiency, reduce operation expenses, and increase productivity. These reasons have made it essential for them to implement business management suites. Enterprise Resource Management (ERP) software ensures that all your business activities are automated and employees get time to focus on strategic tasks that require creativity and intelligence. 

A report published by CIO in 2008 revealed that more than 85% of respondents believed that they could not survive without an efficient ERP system. The findings of the report are relevant today as well. Some of the essential points described in the report were as follows:

a. 76% of respondents considered operational efficiency as their primary motive for implementing an ERP system. 

b. 12% of respondents were interested in the global business support modules of the ERP system.

c. 5% of respondents were motivated by the growth potential offered by ERP software.

d. 4% of respondents desperately needed measures to reduce operational costs offered by ERP software.

Also, there are numerous benefits of implementing ERP software. But it also comes with its own sets of challenges, such as investment of financial resources, long implementation time, an intense collaboration between various business departments, and periodic hand-holding sessions for employees. 

Integrating new and improved ERP solutions with legacy systems in your automobile company may appear costly and resource-heavy. Still, experts suggest that the benefits vastly outweigh the cost, time, and effort initially required in the implementation task. 

This article will shed light on the benefits of ERP software in an automobile company. 

1. Save costs

The primary motive of using ERP software is to reduce operational expenses in the automotive sector. But high implementation costs may seem contradictory to this notion. Let’s understand it carefully.

ERP software integrates various business management suits, such as product development, manufacturing, warehouse and inventory, marketing and sales, finance and accounting, vendor/supplier/distributor relations, human resource management, customer relationship management, and supply chain management into a single system.

By uniting disparate software solutions into an integrated interface, you will have to pay only for one enterprise management software. Moreover, you can significantly reduce employee training costs. 

Also Read: The hidden costs of ERP implementation

2. Improved team collaboration and enhanced communication.

Experts suggest that information silos are one of the most significant causes of a company’s deterioration over time. They restrict the free flow of information from one business department to another. On the other hand, ERP software allows critical business data to move between various business departments in more ways than one. The following example illustrates this better. 

Suppose a customer decides to purchase a car. They walk inside the showroom and seek information from sales agents. The sales team prepares a list of the needs, wants, desires, and ambitions of all the customers who visit the showroom over a month and forwards it to the marketing department. The marketing team can use the data to tweak their campaigns, both offline and digital, to garner better results.

On the other hand, the customer support team regularly solves customer queries and improves customer experience. At the end of the month, they prepare a detailed report mentioning customers’ common problems. This report is sent to the product development department to make the required changes in the car and launch a new and improved version with a substantially high sales potential.

ERP systems break information silos and significantly enhance the communication and information-sharing capabilities of all business departments to work as a cohesive force. 

Also Read: Integrating ERP with Blockchain Technology for Efficient Collaboration

3. High-quality analytics

ERP Software contains an analytics module that provides comprehensive reports about the following:

a. Changing customer behavior

b. Transforming market trends

c. Expense statements

d. Income statements

e. Key Performance Indicators (KPIs)

f. Inventory update status

g. Government norms, policies, rules, and regulations.

ERP systems create detailed reports that provide a 360-degree view of the points mentioned above. These reports allow the senior management to gain a holistic idea of the market and enable brainstorming effective strategies for the automobile company. It also helps to forecast future trends that allow preparing for them beforehand. Moreover, ERP systems make it very easy to access reports, eliminating the need for a specialized IT team. 

Also Read: Cloud-based ERP for Social Presence & Analytics Tracking

4. Increased productivity.

If you critically analyze your automobile company’s business processes, you will find numerous redundancies that are eating up a lot of time, money, and resources. For example, many automobile companies still rely on manual production lines. It means that everything, from manufacturing automobile parts and polishing glasses to installing internal components and painting, is done manually. ERP software improves the manufacturing production line by automating each process and making them fast, efficient, and less prone to human errors

Apart from the production line, there are various other departments in an automobile company. For example, Supply chain management plays an essential role in this business. Organizations have to maintain excellent relations with vendors, suppliers, and distributors to get discounts and sell their vehicles at places that show maximum demand. ERP software allows the automobile company and the vendors to communicate with each other constantly. They can share essential information over secured online pathways that only authorized personnel can access. The ERP software schedules reminders, alerts, and notifications that keep all parties informed about every issue. Objectively speaking, it keeps the trust alive.

Also Read: 4 ways ERP systems can help manufacturers improve productivity?

5. Top-notch customer support

In this information age, the customer is the king. The sure-shot way of getting ahead and becoming the market leader is to maintain excellent customer relations. Do you know that it’s five times more expensive to gain new customers than retain existing ones? For maintaining robust and long-lasting customer relationships, automobile companies must conduct user interviews, collect customer feedback, and provide instant solutions to customer queries. For achieving this purpose, ERP systems can be integrated with Customer Relationship Management (CRM) software that works as an efficient communication channel between the automobile company and its customers. 

CRM software has built-in chatbot features that collect crucial customer information, provide instant solutions to their queries, create and maintain a database of frequently asked questions (FAQ), and route queries that require strategic thinking to support service agents.

Also Read: The top customer service trends of 2021

6. Compliance with government rules and regulations.

Automobile companies must adhere to the government and local authorities’ laws strictly. Otherwise, they might have to face stringent actions. ERP software monitors changes across taxation laws, prescribed practices, and international policies that impact automobiles’ manufacturing and distribution. 

Moreover, ERP software is GST compliant, so you don’t have to worry about GST issues anymore. You can insert invoice details into the ERP software, which will convert them according to a pre-structured format.

Also Read: Startups and Tax Compliance: How can ERP help?


ERP software has become the backbone of companies across all industries. No organization can think of competing in the market without implementing ERP software, let alone becoming a market leader. ERP software significantly increases the capability of automobile companies. In short, they increase productivity, reduce operational expenses, improve profits, and help develop and maintain excellent customer relations. 

At Sage Software Solutions (P) Ltd., we are home to world-class ERP software and CRM software that will solidify your business tech support fundamentals and enable you to build a customer-centric organization. To know more about it, SMS SAGE to 56767. You can also write to us at sales@sagesoftware.co.in

Disclaimer: All the information, views, and opinions expressed in this blog are those of the authors and their respective web sources and in no way reflect the principles, views, or objectives of Sage Software Solutions (P) Ltd.

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