Minimize Human Errors and Business Costs with ERP

Everyone makes mistakes, it’s natural. Human actions are error-prone. In businesses sometimes it is common to dispatch a wrong order from the inventory or accidentally a employee sends a malicious attachment to other employees etc. How does it impact business? Any mistake in business is risky and will cost the company.

Technology, automation and with appropriate risk management policies businesses can eliminate these errors. By adapting to these businesses can prevent losses. The first step towards preventing errors is to understand different types of human errors.

Common human errors in business processes and operations. How32 they impact a business?

As business owners, you are well aware of all the errors and how it can impact your business. It has the power to impact the revenue and the livelihood of your business. Its consequences can affect brand reputation and customer experience.

In recent years, a bank employee’s clerical mistake had cost about $900 million, which is a huge amount. Listed below are four types of human errors.

1. Lapse errors

Lapse errors happen when an employee fails or forgets to perform any action. It can be something severe or any forgetful mistake that can lead to cyber security issues. Other examples can be an employee forgetting to add team members for a crucial project discussion or an employee forgetting to update records due to some other work. All these can snowball into a bigger threat.

2. Slip errors

This error occurs when the employee is occupied in too many manual tasks. So when they are in a rush to finish the task, they might add in some important information in the wrong document. These errors are like contagions, as all information can be accessed by the employees from different departments, it will keep on repeating.

3. Knowledge-based errors

In this type of error, the employee may find it hard to communicate with the team or they might be working with fragmentary data. Another example is the employees’ difficulty to work with technology due to improper training.

4. Rule based errors

Suppose a business changes ownership and if the employees work with the old legacy systems or software, mistakes happen. And if the old rules are not in sync with the current operations of the company, it will lead to errors. Or if any rule is in place, but the employees interpret it in different ways, it will cause errors. So, all these factors will lead to human errors.

ERPs role in reducing human errors in business operations

1. Better communication

The ERP Software  is equipped with features that won’t leave anyone off the loop. Access to information is easy as the data is stored in a centralized database, this promotes effortless communication. In addition, the managers or the employee can update rules in the system, so the entire workforce can access it clearly. This will reduce rule-based errors.

2. Reduce errors by increasing productivity

An integrated system like ERP will help in reducing errors caused due to lack of information or inability to track products in real-time.

Track the performance of the project in real time, set a deadline to it, this will help in reducing errors and wastage.

Integrated and automated data flow across the enterprise reduces error snd improves productivity.

3. Optimized inventory and supply chain

With ERPs inventory management system module – minimize overstocking, track expiration date, take advantage of upsells and automatic reorders. In real-time track the progress of the product in the entire supply chain system. It also helps to track all the supplies and materials accurately.

This traceability feature will help in providing the best customer experience and will assist in improving brand reputation.

4. Automate manual and repetitive tasks

The tasks which are repetitive and mundane in nature can be automated with an ERP. So, the employees involved in these tasks can focus their attention on more value-based tasks. For example, employee payrolls and data entry can be automated and it works round-the-clock. Automation reduces the risks of most human errors.

Business costs decide the future of business.

Business costs should be reviewed by the business leaders to understand the financial information of your business. This information helps in making better decisions for the company.

Business costs are the ordinary and necessary costs incurred to keep the business functioning. High business costs are a sign of inefficiency and businesses need to urgently address this issue to lower it.

A fully-functional ERP solution is efficient to minimize wastage and business costs. Let’s learn how an ERP system helps to minimize business costs.

ERP System

ERP functionalities to reduce business costs

1. Bring down production costs

Make use of the cycle time data to lower production costs. ERP is fully equipped with shop floor tracking tools, excellent scheduling and capacity management. With these brilliant features add good communication within the workforce to master unnecessary business costs.

2. Lower overtime

Working overtime will cost the company and this is one of the main areas where companies can plan to reduce costs. It is just an unplanned cost which impacts the profits of the business.

ERP integration with technology like BI and predictive analytics will provide features that help in better demand visibility and scheduling. Evaluate if your ERP has these options.

3. Save up on raw materials

If you possess better data, you will make better decisions when buying raw materials.  And accurate data is stored in an efficient ERP software. This system will have all the supplier information and based on the records it will be easier to select the supplier who sells quality raw materials at a reasonable rate. In addition, it helps in effective inventory management which will help in reducing costs.

4. Tax-friendly functionalities

ERP records accurate financial information. It also tracks every rupee your business spends and earns. All this information is accessible in the future which would be helpful in fulfilling all the tax obligations. These features are beneficial for businesses which operate across states, provinces and countries.


ERP solution is a futuristic technology that has the functionalities to take complete control of the business seamlessly. Implementing this technology to your business will increase productivity, boost revenue and accelerate its growth. And it is the right solution to eliminate human errors and reduce business costs. Integrating it with other technologies like AI, ML, Predictive analytics etc will enhance the operations of the business. So, deploy it for your business and gear-up your profit margins.

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