It’s always an uphill battle when you’re competing against big businesses. Large budgets and advanced business tools allow large corporations to streamline their operations and provide good quality products at a very competitive price.
But today, small business owners have tools that can help them even the playing field. New software solutions are becoming more accessible to small businesses, with some developed specifically for the needs of small businesses.
Even complex software solutions like enterprise resource planning systems are being adopted by a growing number of small businesses that want to have a centralized system for tracking numerous activities that are a part of their day-to-day operations. But is it worth it for SMBs to try and implement ERP solutions?
After all, it does require an investment and, at least for some businesses, it might seem like a waste of time and resources. Traditionally, ERP software has been associated with big businesses that operate on a much larger scale.
But the truth is that enterprise resource planning systems are not only accessible to small businesses, but they’re becoming a necessity that’s an essential part of running a successful business.
Small businesses must use all the available tools to become more efficient than the competition because, as an SMB, you’re not just competing against the big companies. You’re also competing against other small and medium-sized businesses that are just as eager to succeed as you.
According to a report by the Small Business Advocate, 99.7% of businesses in the U.S. are small businesses. This means that the real challenge is standing out from the crowd of similar-sized businesses that are all fighting for the same customers. With enterprise resource planning (ERP), smaller companies can streamline their operations to the point that they can even rival the bigger companies in terms of the efficiency of their operations.
What Exactly is ERP?
Enterprise resource planning has been the backbone of large businesses and corporations. To put it simply, ERP is a software solution that handles the process of business process management, basically serving as a centralized system that takes control of all business operations.
It provides the large picture view of all the departments and functions across the company, showing all the information in one platform and allowing you to see the needs of each department in real time via information that’s continuously updated by employees.
With the help of ERP, it becomes easy to integrate all facets of the company into a single system that can quickly sort through and discover information on almost anything. Since small businesses have to deal with similar issues as larger ones, just on a smaller scale, it becomes easy to see that an ERP system can bring the same benefits, no matter what size the business might be.
ERP solution providers have been part of this trend as well. Today’s advances in technology have resulted in more affordable software tools that are intuitive and easy to use for everyday users.
This means that SMBs now have multiple options to choose from. There are numerous ERP solutions available on the market, so each business can choose the one that best fits individual needs and matches up well with a company’s industry.
Some of the more prominent ERP vendors, such as NetSuite ERP, BizAutomation ERP or Statii, provide all the necessary tools for businesses that enable you to effectively manage growth and quickly adapt to a changing business environment.
So overall, it’s pretty clear that the benefits that ERP can provide for businesses exceed any potential drawbacks. It’s even been proven by studies as well. According to an extensive study that was done by the University of Pennsylvania, the substantial benefits brought by ERP systems for firms that adopt it, as well as the value that can be expected, far outweigh any risks that might be associated with ERP implementation.
Benefits of ERP
For any business that’s considering making an investment in an ERP system, it’s good to understand what exactly it can bring to the table. So here are a few of the main benefits of enterprise resource planning software solutions that have made them such a vital part of running a business:
One of the most important benefits of ERP software is that it’s able to provide a centralized view of all your important business information.
Without a comprehensive ERP solution, it can be very difficult to keep all your information in one place, and what ends up happening is that each department has their own information system. In turn, this results in the creation of information silos that make it difficult to share information between multiple departments. No matter the size of the company, the ability to efficiently share information between colleagues is essential.
A common problem when working without an ERP system is the need for re-entering the same data about stock levels, lead times, specific requirements by customers or anything else that’s relevant to your business. This inefficient model for data entry and transfer greatly increases the probability of human error, and it also slows down the time it takes to fulfill orders.
With a centralized ERP system, all of the information is available on the same system, allowing you to make real-time changes that are instantly visible to everyone that needs to see it.
Reduced Operating Costs
Another significant benefit that enterprise resource planning can bring to small businesses is the way it can help significantly cut operating costs. It does so by streamlining the entire data entry and management process, enabling companies to use a single system instead of investing in multiple systems for each department.
This also means savings in terms of manpower. Since data is centralized and doesn’t have to be re-entered multiple times, the same tasks can be done quicker, reducing the number of data entry personnel that’s required.
And since the unified solution enables companies to accurately track and monitor assets, that can have an impact on making day-to-day operations more efficient as well.
ERP uses a centralized database, which means that the decision makers of your company can make quicker and more informed decisions, which can have far-reaching benefits for business performance.
Instead of having to sort through numerous spreadsheets from each department, with the help of enterprise resource planning solutions, managers can quickly spot any potential bottlenecks or issues that might be limiting productivity and effectiveness. With this information in hand, you can then make instant corrections.
With real-time data about orders and stock levels, managers can not only make sure that all of their processes run smoothly, but they can even make much more accurate predictions about the needs of the company in terms of resource allocations and necessary investments.
According to a 2016 report by Panorama Consulting Solutions, 82% of respondents improved either key business processes or all of their business processes after implementing an enterprise resource planning system. This isn’t surprising when you consider what ERP can bring to a company. Its extensive functionality allows you to monitor staff performance and improve productivity by tracking staff attendance and performance, providing a lot of useful data about employees that’s available on a single dashboard.
Another reason why ERP systems and an increase in productivity are closely linked is the fact that the software can help eliminate many manual tasks and streamline business operations, freeing up employee time for more productive activities.