For many small and medium-sized businesses, it’s not a matter of if you’ll need enterprise resource planning (ERP) software, but rather when you will need it.
Before we talk about that, let’s have a quick look at what an ERP system is and what it can do for your business.
An Enterprise Resource Planning (ERP) system is business process management software that allows an organisation to use integrated software applications to manage the business and automate many back-office functions, specifically those related to technology, services and human resources.
An ERP system provides businesses a centralised place to manage data from a variety of departments and functions. As a small business you can get away with using separate applications, mostly because the volume of data you work with is somewhat smaller than that used by larger businesses.
But as your business grows, managing all that information across different software platforms will become costly, time-consuming and open to mismanagement. This can be solved by using an ERP solution which typically has the ability to manage accounting, manufacturing and distribution, CRM, HR and payroll, and inventory management – all key components of your business, in a single database, application and user interface.
The right ERP system will give you increased productivity and efficiencies across all areas of your business and with the increasing number of cloud-based ERP solutions available, the decision of when to implement is a lot simpler.
So, When Do You Need An ERP Solution?
There’s no one answer about when the time is right for your business and deploying an ERP system can be an expensive exercise, so you need to be sure your business is ready. There are some recognisable signs that can help in this decision:
You’ve Outgrown Your Existing Software
In a recent survey of over 300 ERP buyers, corporate growth ranked #1 as a key trigger in when to move to an ERP solution.
Much in the same way as we outgrew our favourite pair of jeans, businesses can experience similar growing pains with software. Even if you try to stretch them out and wear them until you lose circulation, you’re really just putting off the inevitable decision to upsize.
If your business is processing data in entry-level software applications that have been designed and built to hold only limited volume, you need a more robust and scalable system.
Cloud-based ERP software has been designed to store large amounts of data across all business operations and will provide you with room for continued growth.
Your Existing Process Is Inefficient
If you’re currently running your business using a heap of different spreadsheets, constantly switching between your accounting and your CRM software or struggling to get your applications to communicate with each other, you’re not the only one. These issues are common for a growing business and are one of the main reasons to upgrade to an ERP system.
One of the key benefits of an ERP solution is its ability to integrate functions seamlessly, combining disparate operations into a single, centralised workspace.
This eliminates most, if not all, of the duplicate processes you’re doing across a different spreadsheets and applications and reduces the risk of data entry errors.
You’re Spending Too Much on Software Integration
Like any business, you no doubt rely heavily on various software systems to operate your business and while integrating these systems can help you streamline data, reduce repetitive data entry and reduce errors, integrating multiple applications isn’t cheap.
Multiple licence fees, staffing, training, and operations costs for each system you use (and the labour needed to get them to work together if that is possible) all increase your technology overheads. For these reasons, you can understand why an all-in-one ERP system is preferred by the majority of business owners.
You’re Struggling to Meet Customer Demands
Customers are the lifeblood of any business, and as a small business, the last thing you need is to fail to meet a promise you make to your customers.
An ERP solution will allow you to organise and access important data in one central location, making it easier to manage and track inventory, retrieve customer-specific financial information or produce comprehensive reports for your clients or management.
For example, if you’re a manufacturer who is increasing production and adding a new factory, but you’re still using manual methods and spreadsheets to track inventory and process purchase orders, an ERP system will help you scale appropriately and handle for any increase in demand.
Within a manufacturing environment, the right ERP system can help simplify your process by:
- Collecting data from your accounting, CRM, order management, shipping and other departments;
- Consolidating this data in a single, easy to use dashboard, providing you with greater insight into your internal processes which can help identify areas for improved efficiency and accuracy.
These efficiencies are essential to ensuring that your customers remain happy and loyal clients of your business.
Where To From Here?
We have talked about some of the common reasons or triggers for businesses to upgrade to an ERP solution however, individual businesses have their own individual reasons.
If you have just started thinking about ERP for your business, we suggest you spend some time determining whether or not your business meets the criteria for an ERP system.
Here’s some initial steps you should follow:
- Meet with your employees and major stakeholders to find out what, if any, operational challenges they’re experiencing using multiple systems.
- Perform an audit on your current business processes and systems to see whether or not an ERP system could improve your workflow.
Riteway Solutions Group does not provide or recommend any particular ERP solution. We believe that your business needs the solution that is right for you. We do provide expert guidance and experience to assist you to make that choice and have the team to help you deploy it into your business. Contact us today if you are thinking about implementing ERP and let’s see if we can help you get started the RITEWAY.