Small Businesses Need to Take Advantage of the Functionality of Today’s ERP Platforms
Why Would an SMB Need an ERP?
As the owner of a Small to Mid-sized Business (SMB), it can be difficult to find a management system that meets your business’s particular needs.
However, having the right software to organize and assist you will greatly help your business grow.
While an SMB’s problems are on a different scale from a large corporation’s, they do still encounter similar problems.
An enterprise resource planning (ERP) software can help companies of any size tackle issues like:
- How to increase product quality.
- How to create leaner production times.
- Improving workforce productivity.
- How to attract and retain new customers
- How to increase profit margin.
- Facilitating business growth.
- Assistance with creating new products.
- Digital marketing.
- Reducing operational costs, redundancy and overhead.
- Increased speed to market.
This article will serve as a how-to guide on selecting an ERP solution to help your business succeed.
A great deal of consideration is required when selecting an ERP software system. Because when you choose an ERP you are essentially choosing a virtual business partner for yourself.
Your ERP will serve as a structure for your business to grow upon.
Before making a decision regarding an ERP or an implementation partner, it is important to know some basic information about ERPs.
Note, not all software vendors are partner driven, some companies will have you purchase directly from the vendor.
A benefit to partner driven models, allows for local, and relevant economic support.
What is an ERP?
An ERP software solution takes the place of multiple types of business software.
By having one software take the place of many, and having all data accessible from one system, your team is able to achieve a cohesive workflow with a more streamlined process.
It is designed to help you consolidate all of your company’s business functions into a single, easy to use application.
Within the program there are tools for:
- Human Resources
- Business Intelligence
- Project Management
- Accounting Software
- Supply Chain Management (SCM)
- Inventory Management
- Material Requirements Planning MRP
- Customer Relationship Management (CRM)
Types of ERP
With a cloud-based ERP, everything is stored in the cloud and nothing is stored at your business’s location. This means that it is accessible from wherever you and your internet connection are.
A TRUE cloud-based ERP is best suited for small to mid-sized companies, who may have team members working from multiple locations, and even all over the world.
With a cloud-based ERP, there is no installation required, and nothing has to be stored or hosted onsite. You simply need an internet browser to access it.
Not to be confused with private cloud, where installations are still required, you are just using someone else’s computer.
TRUE cloud is web-based, meaning you do not require VPNs, or RDP connections, just a browser.
An On-Site system requires servers to host the database. It will be necessary for all company computers to have the software directly installed upon them. Computers will also depend on a permanently networked status for everyone to be able to access the database and to achieve proper automation.
How Does ERP Differ From CRM?
CRM stands for Customer Relationship Management. CRM software applies a different working method than an ERP, although many ERP and CRMs are designed to work together.
An ERP focuses on the operations and manufacturing aspects of business management. The software is designed to elevate a business through consolidation of work by reducing time in production and eliminating menial tasks.
In contrast, a CRM is focused on creating business by increasing sales volume. This is achieved with a focus on public relations, by maintaining high levels of customer service and earning brand loyalty.
The two solutions work hand in hand if desired, which allows for sales calculations, projections and quoting. Not to mention, opportunity management, campaign management, or other marketing initiatives.
Choosing an ERP
When choosing an ERP there are several steps you need to take in order to assess what features will be the most beneficial for your business.
It is important to determine which features are a priority for your business. Focusing on features is one of the easiest ways to start weeding out software that won’t suit your companies needs.
Step 1: Assess what departments are not operating and top capacity and would be improved through better management. These departments could be your priority when choosing an Enterprise Resource Planning solution.
By choosing features that will benefit your deficient departments, you will be able to increase productivity quickly.
Step 2: With the deficient departments selected, you need to identify the problems that are causing the divisions to flounder. These obstacles are what we will be directly trying to solve with the enterprise resource planning software.
Step 3: Once you have identified the departments and problems, you will need to meet with the rest of the partners in your business. This meeting is where what success for those departments will look like is decided. TCO and ROI is presented during this meeting as well
This is an important step because without a predetermined scale of success it will be hard to measure improvement when the ERP is implemented.
Step 4: With the scale of success determined, you must finalize the list of complications and the requirements to solve them. These requirements are what will determine which enterprise resource planning software will suit your demands the most.
Step 5: With the requirements for your ERP solution decided, they must be matched now to the most appropriate ERP solution. The most pertinent course of action is to locate at least three enterprise resource planning solutions that meet all of your requirements.
While working through this process, it is important to make sure that the information you are using to judge the enterprise resource planning solutions is coming directly from the ERP vendor.
It is possible that articles that are just vaguely describing the functions of an ERP are using near-information or misinformation.
It is paramount that decisions are not made without certainty on the actual abilities of the ERP solution. An unbiased approach is incredibly critical as well.
We suggest using an ERP Evaluation Checklist to help with this step.
Working With an ERP Consultant
Selecting an enterprise resource planning solution can be a long and arduous task. If you feel at any point overwhelmed by this choice, you can contract an ERP consultant.
An ERP consultant is someone who works with ERP vendors and can help your company find an enterprise resource planning solution that fits your needs.
A consultant can take on the workload of finding an ERP while navigating all of the available options with experience.
It is also possible to find a consultant who has experience uniting different sized businesses (SMBs) with ERPs.
Their expertise will save you a great deal of time when it comes to selecting an ERP solution and implementing it as well.
While selecting an ERP can be a long process, it is a task that when completed will greatly benefit your business. Once you have selected and implemented the proper enterprise resource planning solution your team will be able to operate with a greater capacity.
With its business intelligence and automation, among other features, you will be able to free your team of a number of small tasks. As well as tighten up your operations as a whole.