Considering ERP for Small Businesses
Many larger companies use ERP, or enterprise resource planning systems, to facilitate a wide range of processes. For example, this type of business management software solution has applications in sales, marketing, development and other areas.
An ERP system can typically be customized well to meet a larger company’s unique needs, but it can also be used effectively in small business environments in various ways. ERP systems are usually lightweight and customizable, making them ideal to assist with small business operations in the areas of inventory control, production management, financing, processing and more. Let’s take a look at the ERP system in a bit more detail and find out why you should consider using it if you own a small business.
Do I Need an ERP System?
Small businesses must effectively manage operations usually on a tight budget. With that in mind, you are probably trying to find different ways to reduce costs and may be wondering if it is cost-effective to invest in an ERP system. Analyzing the financial benefits associated with its use is critical to your decision-making process. Your small business may benefit from the use of an ERP system if the following sounds familiar to you:
- the financial reconciliation process seems lengthy and stressful
- your sales figures are estimated based on conjecture rather than solid and attainable numbers
- you are having trouble keeping up with the current or growing volume of sales orders
- your business is being negatively affected by a reduced customer satisfaction rating as a result of your inability to keep pace with sales volume
- you struggle to monitor your inventory accurately or it is too time-consuming and stressful to do so.
If you have recognized your business in one of the above-mentioned scenarios, you should begin exploring the options and determine how much money you have available to invest in an ERP system.
Let’s start with a word of warning: the implementation process can sometimes be a struggle. After all, first you have to choose the right system for your business environment, and there is a chance that the first one you select may not ultimately be right for you and your team. In the following weeks, you have to educate your team on using the chosen system. Even later, there is a chance that there will be confusion and questions. However, you should look at this period as an obstacle you have to tackle in order to reap the benefits for your company.
Short-Term Advantages of an ERP System
After this first period, you will start noticing numerous advantages. For example, all departments will have immediate access to relevant data, which will eliminate the need to re-enter it. This saves time and reduces the possibility of data errors.
Additionally, you will be able to better maintain business records and identify which projects need to be followed up on or targeted by your employees. This essentially helps your team to work more efficiently, and the software also enables easier and more accurate communication as well as making fact-based decisions. These initial advantages are substantial, but even more of them will appear over time.
Long-Term Advantages of an ERP System
After you implement an ERP system fully, you will notice positive changes in many aspects of your work.
Your staff will have more time available to concentrate on important tasks and to handle your increasing sales volume because they are not bogged down by menial tasks. Your entire process will be streamlined because duplicate efforts are reduced. This streamlines operations and lets your team focus their attention on more important and productive tasks.
Your entire team will work more efficiently because of the communication benefits offered by this program. Frustrations regarding duplicated efforts from miscommunication can be reduced or eliminated. Each employee will feel as though they are making a truly positive difference in the company through personal contribution, they will know their efforts are appreciated. The satisfied employees won’t look for other jobs, they will stick around. That way, you avoid paying for the process of hiring and training new employees and you have happy and productive people working for you.
The implementation of an ERP solution can help you save money in other ways, too. Automating processes can decrease overhead, and you will also be able to track expenses more effectively. This helps you identify areas where you could make small changes to save money. As your business grows, you can also more effectively adjust to the change in production with a focus on containing costs.
We all want to succeed and as time goes by, your small business may grow to a medium size business and further. Even though this is something to look forward to, it can also be challenging. But, fortunately, your ERP system can help in this area as well by freeing up time and money that could be used more effectively throughout all stages of growth.
Running a small business can be challenging, and you understandably do not want to risk implementing an ERP system that will not be effective and beneficial. However, your investment of time and money when implementing the right ERP system can result in substantial benefits that can facilitate growth and profitability going forward.