What ERP Means for Your Small-to-Medium-Sized Business
“To ERP or not to ERP?”
That is the question many business leaders ask themselves. Acquiring an ERP system is one of the most important investments a business can make, yet many small and young businesses claim they are ‘too small’ for ERP. This stems from the mindset that the number of users drives the need for an ERP solution.
The truth is, a small business must be faster and sharper than the competition. In today’s business landscape, no business is too small for an ERP solution. ERP allows small businesses to appear, act and operate like an enterprise-scale business.
What is ERP?
Enterprise Resource Planning (ERP) has been known to be the backbone for many corporate-scale businesses. The software is a key tool for managing production, order processing and inventory. It also monitors business resources between stakeholders, such as; revenue, materials, orders, staffing and manufacturing capacity. All of this is done in a single interactive database management system with built-in analytics and a dashboard.
An ERP can be implemented across several industries including manufacturing, retail, human resources, steel, concrete, banking, pharmaceutical, chemical, oil/gas, as well as agricultural, farming and livestock management.
There haven’t been as many suitable ERP options available to small-sized businesses in the past. These businesses simply didn’t have the funds or technical support to create the infrastructure necessary to adopt the traditional corporate-scale ERP solutions.
Therefore, growing businesses end up creating a fragmented business structure made up of several separate programs that handle finance, inventory, sales, payroll and more. However, recent technological advancements have opened the door to more practical small business solutions.
What Do Small Businesses Need to Understand?
Within a small company or startup, employees wear multiple hats. Everyone pitches in wherever and whenever the need arises (which is frequently). Who has the time to manually process multiple spreadsheets and separate mountains of data?
ERP systems geared towards small businesses are able to blend and automate key business functions such as order processing, production and finances.
However, ERP software is integrated over all departments of a company. Implementing an ERP system entails careful planning (preferably with the assistance of a provider such as ABS) in order to minimize the risk of failure and to ensure goals are met.
What Benefits Do Small Businesses Get From ERP?
Transparency: Instead of each department having its own information system, all relevant data can be shared and accessed by all the departments. This eliminates the need to re-enter or export data, which can result in less errors, increased productivity and reduced expenses on human resource.
Decision-making: Real-time data provided by the system can be beneficial for marketing, management, accounting, and enables the organization to make vital decisions on time and reduce waste. Teams can detect any potential obstacles or issues that may shake productivity levels. An overall picture of operations allows for business leaders to make effective decisions and respond quickly to a changing business environment.
Productivity: With increased clarity by streamlined business processes, staff can shift their focus on managing increased volumes of business. This aids in transforming various facets of your business and overcoming the challenges involved in business growth.
What Are Signs That Your Business Needs an ERP?
The majority of small businesses start with just the basics. This may include a combination of simple accounting software and document-based processes—i.e., spreadsheets, synced documents.
As the business expands and transactions increase, it may become more time-consuming and difficult to process a larger volume of data. Business processes become much more tedious, such as; inputting sales and purchase orders from various clients, updating inventory, manual stock checks, processing invoices, billing and keeping track of client interactions.
This is especially true if this information is stored in separate systems and databases. This means that data may need to be imported/exported from program to program in the workflow, allowing room for errors.
ERP can automate these manual processes, allocating more company time to sales and business development instead of administrative tasks. Furthermore, ERP software allows synchronous workflow from inquiry to invoice and payment.
What Is the Right Choice of ERP?
A good ERP option will offer a suite of business management tools such as CRM, web hosting, ecommerce platform, a tasking system, a shipping manager, email marketing, etc. However, too many unnecessary bells and whistles may cut back revenue.
As a small business you want to invest in the most cost-effective solution that meets your needs, fits your industry and is manageable. There are various factors to consider when choosing which ERP is best for you and your company.
Ease of Use: Consider the learning curve involved. Is it user-friendly? What would be the amount of training involved? Modern ERP solutions come with responsive user interfaces and can easily integrate with most business tools such as Microsoft programs and Google.
Customization: Does the software accommodate changing business models? Does the software utilization, platform and user count adapt with business growth? The system should be scalable to your business goals.
While most of the sophisticated enterprise-scale software will be too bulky and expensive, the ‘freemium’ software (small, basic packages) will be too difficult to scale as your business grows. It is important to select an ERP solution with the features that best align with your business objectives.
Frequency of Upgrading: Be aware of the support guarantee regarding mandatory upgrades. Unless you are purchasing additional components for your software, make sure enhancement fees are locked in and don’t increase with developments and future releases. Also consider the ease of upgrading; a cloud platform may provide faster and automatic updates while an on-premise update may involve more work.
Security Measures : Ensure that the security of your data is as much of a priority to the vendor as it to you. Be aware of how to manage and determine different access and authorization roles in the system to prevent data violations. Make sure passwords are strong and securely encrypted. Also, ask the vendor what security measures are employed for integrating third-party products.
Support Service : Take into account how much support is offered by the vendor and find out if there are any additional fees involved for troubleshooting your system. The vendor should also have plenty of personnel to assist with setting up and maintenance of your ERP software.
Plan for Now and the Future
Alternative Banking Solution's SMBKit Pro is an intuitive set of small business tools put together in a single web application available to small businesses online.
SMBKit Pro is designed to empower the small business with tools that are normally only available to large corporations.
This solution brings the power of enterprise computing to small businesses. Designed and built on enterprise relational database and web server technologies it significantly extends the capabilities of small businesses.
Ready to take the next step? Please contact ABS at 1 (866) 822-7462 or click here to learn more about SMBKit Pro.