There are 5 signs that your small business is ready to implement ERP. However, your understanding of ERP might be limited. In this scenario, it can be helpful to review some of the critical benefits inherent in ERP software to understand better just how important such a system is.
To understand this question, you must first define what ERP is. ERP stands for enterprise resource planning. This software enables small business owners to integrate their business records into a single platform. To further enhance your understanding of ERP, you must also understand the many benefits this solution can deliver to your business. Some of these key benefits include:
More Accurate Financial Reporting – with a comprehensive ERP system in place, small business owners will have access to their complete business information in one place. This information, in turn, will be available to them in real-time, which significantly enhances the decision-making process. By allowing your small business the freedom to make more informed decisions, you will notice that your bottom line will grow significantly. This increase in your profit margin will eventually lead to significant improvement in your company’s standing.
Faster Response Times – ERP software allows your business to obtain crucial data much faster, thus improving its efficiency in sales and product availability. Your bottom line will increase as your business runs more efficiently due to increased revenue from more clients and customers. However, for ERP to be successful, the managers and owners must appropriately implement it. This is where compliance management comes into play. Compliance is critical to ERP implementation. It ensures that your software is running smoothly and, therefore, can provide your business with the necessary information to resolve issues and improve overall performance.
Elimination of Needless Duplication – the process of duplication within any business is never an effective solution. It is often counterproductive. However, this is a problem that small businesses are well acquainted with. ERP software will eliminate duplicate records, eliminate redundancy, and provide your company with the necessary data and information to make business decisions promptly.
Greater Profitability – in addition to a streamlined financial report, your ERP software will also provide you with the information necessary for operational efficiency. Your ERP provides your company with one consolidated platform that contains all of your data in one location. In addition, the information provided by your ERP system will allow you to map out a cost-effective plan of action quickly. By establishing a cost-effective method, you can free up resources in your business and potentially increase your profits.
Redundancy Avoidance – if you have a good compliance management strategy in place, your ERP should anticipate and prevent the potential for redundancy with all of the processes in your business (human resource management, accounting, finance. However, the functions of these processes are consolidated into one integrated system, and there is an increased chance of fewer mistakes concerning redundancy. Again, increased profitability and the ability to reduce redundancy is a significant benefit to implementing ERP into your business.
Integration – this final sign that your small business needs to implement ERP is the ability for seamless integration. If you currently have a CRM or an ERP implemented in your organization but want to have things completely changed, converting the existing software to run on your ERP makes excellent sense.
However, if you do not have ERP software running, then you have some serious wiggle room. There are many companies in the market today that offer solutions that integrate ERP into your small business needs.
1) No Easy Access to Your Business Information
Do you see signs that your small business is ready to implement ERP? In most cases, small businesses and medium-sized enterprises find themselves in some difficulties in ERP implementation. Most of these businesses struggle with ERP implementation because they cannot access financial data conveniently, and they cannot utilize specific systems or applications. As such, many small and mid-sized businesses find themselves trying to implement ERP using trial and error practices.
2) Lots of Different Software With Different Processes
Small businesses struggle with implementing ERP because they do not understand the ERP benefits (and advantages) enough. When purchasing a CRM or ERP software system for their small business, they often fail to recognize the benefits and advantages that they can obtain by using an all-inclusive solution. Some small business owners make the mistake of thinking that if they purchase a CRM or ERP system that it will take care of all of their needs. This may be true in some cases, but when it comes to using multiple software systems or applications, businesses often find that they have too much data and too many applications that they cannot manage using a single system.
An additional miscalculation that small businesses make is implementing ERP using a “one size fits all” approach. This mentality often leads to the early adoption of ERP software solutions and implementations. Small business owners usually try to use standard business processes rather than customizing them. This approach is often counterproductive because ERP solutions were not designed to be used in a one-size-fits-all manner.
When implementing ERP solutions into a small business, there are a few things that you will need to keep in mind. Before you begin any implementation, you will need to identify your current practices and make sure they follow ERP software. There are two primary types of ERP software: enterprise and small business. Most small businesses will utilize the former; however, many large companies make the latter mistake.
3) Your Customers Experience & Sales are Decreasing
Enterprise resource planning software can coordinate all facets of the business, including planning, manufacturing, sales, and marketing. Firms within these larger organizations can maximize the full potential of ERP solutions. On the other hand, a small business may have limited business managers and staff, limited access to resources, and limited financial resources. Implementing ERP into these organizations will only result in the temporary adoption of an inferior solution that will still require maintenance.
4) Too Many Complex IT and Taking Too Much Time
In some cases, organizations will purchase entire suites of related software instead of focusing on individual applications. Buying this way can be extremely expensive, mainly when the suite contains unnecessary application programs to run the business. It is often necessary for organizations to implement ERP into a small business if they have limited IT staff and replace outdated software. In addition, by focusing on just one suite of ERP solutions, small businesses can save thousands of dollars per year.
5) Getting Harder to Train Employees
Organizations that implement ERP software never have problems finding employees to train. Training and hiring new employees can be complicated tasks that can stretch the budget severely. Small business owners usually find that their profits increase when ERP is implemented. Not only is the software less costly, but employee turnover is significantly reduced. Because many employees are trained on the ERP software during training, they spend less time familiarizing themselves with manual tasks, translating into more profits. ERP solutions usually have a higher success rate when used in conjunction with training.
If your organization has limited IT staff, it makes sense to implement ERP as soon as possible. The cost of upgrades and software licensing can be high, and most small businesses do not have a resolute IT department.
Implementing ERP into a small business can also help boost employee morale because the new tools are familiar, and the employees know how to use them. Many successful companies use ERP software, and most employees do not understand how the software works or why it is beneficial to their business. If your organization does not yet have ERP in place, it is now time to consider implementing it seriously.