ERP and Obamacare

On first glance, there seems to be little connection between ERP and Obamacare. Until, that is, you read articles like this one about Applebee’s CEO, who says that Applebee’s won’t be hiring to offset the cost of the Affordable Healthcare Act. One of the objectives of ERP software is to reduce the amount of effort (labor) to produce a business result. Simply put, to be able to handle more transactions with less effort.

ERP Does More With Less

Several businesses have observed over the last few years that employees they laid off during the recession really weren’t needed. They would not be creating the jobs again when the economy comes back full force. Some of these businesses are experiencing an increase in sales, and discovering that they really did need the employees. They are thinking about hiring again.

Enter Obamacare. Suddenly the employees that looked fairly affordable (at, let’s say, $10 an hour) don’t look so affordable. The minimum cost for many businesses is $2,000 for each employee they don’t cover. So how do they proceed?

Properly implemented ERP will allow many of these businesses to do more with the employees they currently have. Properly implemented means simply that the features in the software designed to save the business money are used. This implies training and business processes designed to help employees use the ERP software.

Should You Look for a New ERP System?

No. Not yet. Begin with an evaluation of your current system. When we talk with businesses about their systems, we often find that training and understand the possibilities are more important than the system. We’ve discovered over the last 20 years that more often than not, a new system simply locks in old processes. Start by looking at the business and its needs. Then consider an ERP system if it’s needed.