The High Cost of Disconnected Systems in the Cannabis Industry

disconnected systems in cannabis

The results are in: bad data costs organizations an average of $12.9 million each year. That’s because cannabis companies that use disconnected systems to run their businesses unknowingly create data silos, where multiple versions of information operate in isolation. Without access to company-wide data, businesses lack the visibility, control and insight needed to run their cannabis operations successfully. 

When departments, processes and employees aren’t in sync, issues such as wasted resources, higher operating costs, ineffective business initiatives, project delays and poor customer experience undoubtedly arise.  

Fortunately, data collection and centralization is a key part of an Enterprise Resource Planning (ERP) system. At its core, ERP connects departments, data and processes into one centralized, integrated solution and instead of multiple data sets, it provides a single source of information. This visibility allows decision makers to track, calculate and isolate the business metrics that really matter. 

Below, we look at how cannabis companies end up with disconnected systems and the dangers of relying on multiple versions of data. We also look at the how ERP software helps increase visibility, streamline operations and manage growth. 


Why Do Companies End Up with Disconnected Systems? 

As a cannabis company matures, it adds systems and software to manage its growth. A new business may run its accounting using QuickBooks or similar accounting software at the beginning. Then, as it begins needing tools to track inventory, employees may start using Excel or switch to a new system to manage inventory. As sales increase, the company may purchase software to store customer contact and sales data. Meanwhile, operations may need a solution to help control production, so they purchase a separate software system to address their needs. 

Eventually, cannabis companies end up with disconnected systems, none of which communicate with each other or share data. To overcome this, users start creating workarounds to access the information they need to get their jobs done. As each individual department operates in its own silo, decision makers have a harder time analyzing the data they need to run the business. 


Creating Good Data with ERP for the Cannabis Industry 

ERP software eliminates data silos and instead provides one centralized solution so that everyone across the company can see what’s happening in real time.  

With an ERP solution built for cannabis cultivators and manufacturers, business leaders can: 

  1. Gain Visibility into Financials 

When operations and finance share the same data, you get a full view of the health of your business. With an ERP solution, accounting teams gain visibility into all aspects of the organization, resulting in a more complete and accurate financial picture. 

  1. Support Compliance 

In the cannabis industry, compliance standards and regulations are constantly evolving. An ERP solution can adapt to accommodate new requirements as they come out, helping to ensure you adhere to GMP standards and US State or Health Canada reporting. ERP software built for the cannabis industry also comes with robust product recall management features, which helps mitigate risk and ensure overall safety. 

  1. Become More Flexible 

Markets and consumer demand can shift quickly, especially in the cannabis industry. With accurate forecasting and complete visibility provided by an ERP, companies are better positioned to respond to changes in demand and adapt operations to ensure success. 

  1. Better Manage Inventory Across Facilities 

Robust inventory management features built into an ERP solution for cannabis cultivators and manufacturers helps control inventory across multiple warehouse locations, automate orders and better manage distribution without losing track of costs. 

  1. Speed Up Response Times 

With complete and accurate data, businesses can increase response times, uncover faster routes to market, improve forecasting and be more adaptable to industry changes. 


Taking the Next Step Towards a Connected Cannabis Business 

Investing in an ERP solution purpose-built for the cannabis industry gives business leaders access to the insight, visibility and control needed to take their business to the next level. 

Pure Greens, a wholesale cultivator based in Colorado, utilized CannaBusiness ERP to bring clarity to otherwise unusable data. Prior to CannaBusiness ERP, Sterling Stoudenmire, former CEO of Pure Greens, was forced on multiple occasions to contact the company’s software vendors and request privileged administrator passwords just to trudge through multiple databases to understand how data was being collected and used. 

“I spent many late nights only to find out the database was a black hole. You couldn’t get to your data or find out what was going on. [Now, with CannaBusiness ERP] it’s quality control overall, knowing statistically what’s happening, knowing what’s failing, where and why. CannaBusiness ERP gives me a 360-degree view of things,” says Stoudenmire.  

To learn more about how ERP software built for the cannabis industry can help your business overcome the high cost of disconnected systems, reach out to us. We’d love to show you what CannaBusiness ERP can do. 

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