Expert Advice for Medium and Midsize Businesses

5 Clues You Have a Human Error Problem

Christiane Soto
Senior Marketing Manager - CX

One of the most significant risks to the success of your small-to-medium business (SMB) is human error. And no error impacts a growing business more than those contained within your enterprise resource planning (ERP) system.

No employee wants to make a mistake, but errors are part of being human. With that in mind, many companies don’t even try for 100 percent accuracy. In some industries, a 70 percent accuracy rate is considered “good enough.”

But is it? Your ERP system supports end-to-end processes, and if data is continually being transferred back and forth between emails, spreadsheets, and even chats, the greater the risk for mistakes.

And mistakes are costly, especially if they show up once a customer becomes involved. 

1-10-100 Rule

The 1-10-100 rule states that the cost of data entry errors multiplies exponentially depending on when those errors are identified and corrected. So, if it costs a company $1 to check the data at the first point of entry, it will cost $10 to correct that error if it was missed. If the error was missed yet again and impacts operations or even customers, it could cost $100 on top of all the issues around customer retention and damage to the brand.

But given that you might be dealing with thousands of data points (customer record creation, invoice processing, purchase order creation, inventory updates, etc.), it could take a while for mistakes to show up.  If “only” 30 percent of your data is incorrect, that could be hard to find, but wreak havoc all the same.

So here are five subtle clues to help you identify that you might have a human error problem with your ERP systems.

1. Finance Employees Are Staying Late

No matter how efficient or capable the employees in your finance group are, they have their limits. If they are consistently working late, long after everyone has gone home, that is a big indication that your staffing level is not where it should be. When overworked or pushed past their capacity, any employee is more likely to commit mistakes. The longer your employees are overworked, the more mistakes they will make, and not only because they are tired. Constant overload can make employees resentful and is a massive contributor to employee disengagement levels.

2. Finance Must Use Several Different Applications to Get the Job Done

As a firm’s finance and accounting requirements become more complex, gaps appear and are filled with other solutions—spreadsheets, point solutions, or even home-grown applications. Integration is problematic at best, so an additional layer is usually added to vet errors, slowing processes even more, and increasing the risk of serious delays and unhappy customers.

3. Employees Struggle to Find Needed Data

When different pieces of information reside in different systems, your finance staff could spend the majority of their time looking down various rabbit holes for the correct information. Once they find it, there is no clear way to know what is current, accurate, and reliable. When ERP moves to an integrated cloud and can extend its core financial architecture to include integrated customer experience (CX), supply chain management (SCM), human capital management (HCM), and enterprise performance management (EPM), all applications work together. Also all departments have improved visibility and can collaborate—as one.

4. Over-Reliance on Manual Data Entry

When employees have to export data onto spreadsheets to upload that data into another siloed system is the norm, mistakes are going to slip through the cracks. When this happens, records become corrupted, import/export numbers won’t align, transcription errors and transposition errors will be the norm.  

5. No One Trusts the Data Anymore

When multiple manual steps are used to augment a less-than-optimal infrastructure, employees have to rekey payment information into financial systems, manually calculate discount percentages, reconcile customer information, or log into multiple systems to see complete purchase/payment histories. These manual steps inevitably lead to slow-downs, reporting errors, and bad decisions that are based on inaccurate, incomplete, and old data.

If any of this sounds familiar, your growing business may have a human error problem. In fact, 61 percent of companies list human error as the cause of inaccurate data. And inaccurate data leads to workarounds, more manual entry, the addition of more point solutions, leading finally to a complete lack of visibility into the health of your (hopefully) growing company.

To learn more, download our newest ebook to learn how to tell if your ERP system is limiting your sales and profitability.

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