Top Three Reasons Why SMBs Need an ERP
One question small businesses often ask is, do we really need an ERP? The answer to this question of course depends, but in most cases is YES. While companies have managed with manual processes, spreadsheets and off-the-shelf software, in today’s digital economy, running your business without a well-rounded ERP solution is synonymous with a warrior going to battle without a proper weapon.
Many small to medium-size companies (SMBs) implement an ERP because they just know they needed to do something. They have outgrown QuickBooks or a similar accounting software package, they are using a combination of disparate applications held together with the equivalent of a bale wire, they are having difficulties meeting customer demands, there is a lack of effective time management, or there are too many risk of errors in spreadsheets and manual processes. These reasons drive the decision to implement an ERP. But it is important to have clear objectives, so you can monitor progress against meeting them. According to leading market research firm Mint Jutras, here are the top three ERP goals identified by most SMBs:
1. Relieve frustration and improve efficiencies in business transactions
If you are plagued with frustrated employees and inefficiencies, you need to be thinking about an ERP solution. Frustration can easily arise when individuals struggle without the applications necessary to run the business. The more routine and menial tasks can be automated, the more SMBs start to really improve on productivity and efficiency. Look for a software that can eliminate those routine and repeatable tasks and free up employees to truly add value to the company. Of course, there will initially be money, time and effort spent to implement a solution, but the performance improvements and cost savings of a well implemented ERP outweighs the short-term expenses.
2. Improve selected performance metrics
If whatever you use today to run your business does not get a passing grade in terms of ease of use and time it takes to complete tasks, it could be hiding many other performance issues and could negatively impact your business. By implementing an ERP, there are many areas in which SMBs can gain benefits. ERP can manage everything from inventory to accounts receivable, to your entire accounting infrastructure. Consider operating costs or a segment of inventory, consider also other improvements that may either directly or indirectly impact top or bottom line performance. Furthermore, the average SMB achieves 100% ROI in approximately 27 months.
3. Gain competitive advantage through technology
Thanks to all the new technology available in the market today, including cloud-based ERP solutions like NetSuite and Sage X3 (now Sage Enterprise Management), the rules of business have totally changed. The only way to survive in today’s digital economy is to be well technologically equipped. If your business is operating without a technology-enabled modern ERP solution, here are some questions you need to ask yourself:
- Are you in control?
- Are all the departments in your organization supported?
- Is your current solution complete?
- Considering your current solution, are your goals realistic and achievable?
If you answered no to any of these questions, it’s time to look into an ERP that can keep your business relevant and efficient in an ever-changing and highly competitive market.
A well-executed ERP implementation can transform various facets of your business, streamline processes and accelerate growth. Looking to improve performance, relieve frustrations, save time, optimize control, reduced costs and be a viable competitor in your business environment? You need an ERP solution.