Do startups and SMBs need an ERP system?

Small to medium-sized businesses (SMBs) need to implement an enterprise resource planning (ERP) system. Recently, a startup CEO asked if I could implement an accounting system for the company. Some suggested implementing a simple accounting system such as Quickbook or Xero. However, this company’s growth potential is well beyond what is a simple company or a mom-and-pop business. Think about the benefit of obtaining real-time data versus periodic data. Overall, enterprise resource planning systems offer real-time management tools to measure business performance. 

The startup required an accounting information system with robust functionality that enables management to make informed decisions to create value. And the objective of implementing an accounting system means that management must have the ability to analyze the company. Thus, the clear answer is to implement an enterprise resource planning system.

Because of the request, this blog shares critical information with business owners, professionals, and management about the power and benefits of using an ERP software system.

Understanding ERP’s purpose and functionality

ERP solution software is complete software systems for managing a business’s operations. Hence, this software system is used for various functions, from the management of production, ordering, and delivery of products to accounting, human resources, customer relations, and other typical areas.

The evolution of ERPs from large enterprises to SMBs

Large businesses benefited for years using ERPs. However, over time, enterprise resource planning systems become more and more accessible to small businesses. ERPs evolved from manufacturing resource planning systems (MRPs). Moreover, by connecting accounting information systems with MRPs, management can view the company holistically and connects operations with the numbers becoming a business management software. 

Companies such as SAP, Oracle, and People Soft (now Oracle) dominated the large company market for years. Enterprise resource planning systems for SMBs did not exist.

However, today other companies such as Microsoft, EPICOR, Deltek, SAGE, and workday share the once void SMB ERP solution space with SAP and Oracle. SMBs now have access to robust tools to manage their businesses. ERP software systems, help SMBs (small to medium-size businesses), from retail to manufacturing to financial services.

The overall benefit of ERP software solutions

ERP solutions software offer many benefits for businesses of all sizes and more than an accounting software system. Overall, ERP software support businesses to streamline their operations, making their business run more efficiently. The software systems can also help businesses to improve their customer service, as they provide a more holistic view (entire business) of the business and the ability to drill down to the individual business unit. Artificial intelligence is used. Consequently, ERP software can also assist businesses to reduce expenses and improving their bottom line through the elimination of manual processes.

ERP systems assist manage a business’s operations

ERP system software manages business operations by consolidating all the data from various company areas into one user-friendly interface. The system gives businesses a more comprehensive understanding of their operations and makes identifying and resolving potential issues easier. Consequently, solution software can also help companies to optimize their operations, leading to increased efficiency and profitability.

ERP systems help businesses centralize information in an easy-to-use database

Many ERP systems put all the information a business has into one easy-to-use database. This way, companies can understand their operations better and see any problems that need fixing. And the software can also help companies to run more efficiently and make more money.

ERP systems can automate tasks and processes that would otherwise be time-consuming and labor-intensive

ERP software solutions helps automate tasks and processes that would otherwise be time-consuming and labor-intensive. Such techniques help reduce the time and work it takes to do these tasks, making them more accessible and faster. Overall, the solution software can also help core business processes make your business more efficient and profitable.

Order processing management

ERP Order processing management tasks (supply-chain) include:

– Tracking orders and order statuses

– Processing and tracking returns

– Generating invoices and shipping documents

– Assigning order numbers

– Updating inventory levels

Financial management

ERP Financial management tasks include:

– Accounts payable

– Accounts receivable

– General ledger

– Budgeting

– Cash flow management

Human resources management

ERP Human resources tasks include:

– Employee onboarding

– Time and attendance tracking

– Payroll

– Performance reviews

– Training and development

Manufacturing management

ERP Manufacturing management tasks include:

– Production planning

– Inventory management

– Quality control

– Scheduling

– Capacity planning

Customer relationship management

ERP Customer relationship management tasks include:

– Contact management

– Sales management

– Marketing automation

– Service management

– Reporting and analytics

ERP solution software can help manage production

Enterprise resource planning software can help manage production by tracking the number of products produced, how many are defective, and where the products are shipped. Whereas, this information can help businesses improve their production process and reduce the number of faulty products.

ERP systems can help manage inventory

ERP software can help manage inventory by tracking how many products are on hand, current stock levels, and when items are running low. This information can help businesses better manage their inventory and ensure they never run out of a product.

ERP systems can help businesses track customer data

Enterprise resource planning software can help businesses track customer data by recording customer contact information, what products they have purchased, and any complaints or feedback. This information can help enterprises better understand their customers and thereupon create more effective marketing campaigns.

ERP systems customize to meet the specific needs of a business

ERP solution software is customizable to meet the specific needs of a business. The system can tailor to fit each company’s unique operations and allow businesses to get the most out of their ERP system and improve their efficiency and profitability.

If your business is growing and you struggle to keep track of everything, it might be time to consider implimenting an ERP software. Therefore, enterprise resource planning systems can streamline your operations and make your business run more efficiently.

7 Signs that it is time you implement an ERP system

Still not sure if your business needs an ERP system? Here are seven signs that it might be time to implement an enterprise resource planning system:

(1) You’re using too many spreadsheets

If you rely on too many spreadsheets to track your data, it might be time to consider ERP software. ERP systems can help you track and manage your data in one central database. It can save you the time and energy you would otherwise spend manually updating spreadsheets.

(2) You’re having trouble keeping track of inventory

Do you often find yourself running out of stock of certain products? Or do you have too much inventory of others? ERP software can help you keep track of your inventory in real-time, so you always know what products you have in stock and can avoid over- or under-stocking.

(3) You’re wasting time on manual tasks

If you spend a lot of time on manual tasks, such as data entry or creating reports, it might be time to consider ERP software. Enterprise resource planning systems can automate many of the functions you currently do manually, freeing up your time to focus on other areas of your business.

(4) You’re having trouble communicating with other departments

Do you constantly send emails or call other departments to get information? ERP software can help improve communication between departments by giving everyone access to the same central database. Accordingly, it can help reduce the time and effort required to get information from other departments.

(5) You’re having trouble making decisions

Do you find yourself constantly second-guessing your decisions? Or do you find that it takes you a long time to make decisions because you have to gather information from multiple sources? ERP software can help you make better decisions faster by giving you access to all the information you need in one central location.

(6) You’re spending too much money

If your business is growing, you might find that your current systems can no longer keep up with your needs. It can lead to inefficiencies and errors that can cost your business money. That being so, enterprise resource planning software can help you save money by streamlining your operations and giving you the tools you need to manage your business effectively.

(7) You’re not meeting customer expectations

If you’re finding that your customers are not happy with your product or service, it might be time to consider ERP software. Overall, enterprise resource planning software can help you improve customer satisfaction by giving you the tools you need to manage your business effectively and deliver a quality product or service.

Cloud ERP vs. On-premise ERP

There are two main types of ERP systems: cloud ERP and on-premise ERP. Overall, ERPs help businesses manage different parts of their company—however, one distinction is that ERP software is either on-premises or in the cloud. With cloud ERP, companies can access their ERP software from any computer with internet access.

Is an on-premise ERP suitable for your organization?

On-premise ERP, the software is installed on computers in the business. It makes on-premises ERP software a barrier to SMBs due to possible prohibitive costs. Business needs to have the hardware and software to run the enterprise resource planning system. Thus, on-premise ERP can be expensive.

An on-premise solution may be your best option for a large company with direct hardware control. On-premise systems store all data within the organization, which is excellent for sharing information with other internal systems. And when dealing with sensitive information, data protection is of paramount concern. Keeping data in-house could benefit your business. 

Enterprise resource planning software that uses on-premise solutions can significantly benefit large organizations. However, for SMBs, higher up-front costs and technical support may involve prohibitive costs.

Is a Cloud ERP suitable for your organization?

Cloud ERP uses the internet. It means businesses can access their enterprise resource planning systems from any computer with internet access. Cloud systems can be less expensive than on-premise ERP because companies don’t need to pay for the hardware, software, or installation.

One downside of cloud ERP is the limitation of flexibility. Businesses cannot customize their ERP system to fit their specific needs. Instead, they need to use a pre-made design that may not suit their business.

Another downside of an internet-based solution is that businesses depend on their internet connection. If the internet connection goes down, companies will not be able to access their ERP system. It can lead to disruptions in business operations.

Consequently, cloud ERP can be a good option for businesses that don’t want to invest in hardware or software. And cloud ERP can be a good option for companies that want to access their ERP system from anywhere. Cloud ERP can be a good option for businesses that want to save money on installation and maintenance.

Use of a Hybrid ERP

Notwithstanding the limitations of cloud systems, A hybrid ERP is a combination of an on-premise system and a cloud system. A business can choose to use certain modules from the cloud system and other modules from the on-premise system. This allows businesses to have the best of both worlds. Hence, they can have the flexibility of the internet-based ERP and the security of the on-premise system.

Benefits of a hybrid system

A hybrid ERP can benefit a company’s use of it in several ways. First, it gives businesses the flexibility to choose which modules they want to use from the cloud system and which modules they want to use from the on-premise system. This gives businesses more control over their system. Second, it gives businesses the security of an on-premise system. Third, it gives businesses the ability to integrate their on-premise system with their cloud system. Fourth, it gives businesses the ability to migrate their data from their on-premise system to their cloud system. And fifth, it gives businesses the ability to consolidate their data from multiple solution systems into one central location.

In conclusion

In summary, enterprise resource planning software is a complete software system for managing businesses’ operations. enterprise resource planning systems are suitable for various business functions, from the management of production and ordering to accounting and human resources. Small business ERP systems can help businesses automate tasks, improve department communication, and make better decisions. Additionally, the system can be cloud-based or on-premise.

Consequently, enterprise resource planning systems are beneficial because they can save businesses time and money. When considering ERPs for your business, it is essential to understand the different types of software solutions and how they can benefit your business. With ERPs, companies can manage other parts of their business, such as inventory, customers, finances, and employees, with one system.

Enterprise resource planning systems can help businesses automate tasks and save time by simplifying and streamlining processes. In addition, the solution software improves communication between departments by providing one central system for information sharing. With enterprise resource planning systems, businesses can make better decisions by having all relevant data in one place.

Overall, enterprise resource planning systems can help businesses save time and money by automating tasks, improving communication between departments, and making better decisions. When choosing a small business ERP system for your business, it is crucial to consider the needs of your business and the different types of software system solutions available. Think of what business owners, CEOs, CFOs, and other members of management, including employees, can have from using an enterprise resource planning system.