How an ERP Can Save Your SMB

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There is a common misconception among small business owners that an enterprise resource planning (ERP) solution will be too expensive and too complicated to be worthwhile. Before you echo those concerns, consider these figures compiled by the research firm The Aberdeen Group from a survey of 578 small and midsized business who have implemented an ERP:

  • Operating costs declined 22%
  • Administrative costs declined 20%
  • Inventory was reduced by 17%
  • Complete and on-time delivery improved by 19%
  • Schedule compliance improved by 17%
ERP components.
Importance of Enterprise Resource Planning.

Those productivity and efficiency gains make it clear that even in a small business an ERP can have a big impact. Here’s how:

Boost Productivity Across Departments

Small business ERP software has a lot of features, but the most significant is that it complies all your business data in one location rather than separating it between department and administrators. That means all your staff has instant access to all the information they need to complete a project, fulfill a customer request, or plan a strategy. In myriad ways, this allows every aspect of your small business to produce more than it does now.

Refine the Flow of Data

The problems affecting many small businesses have less to do with a lack of opportunities and more to do with the inability to seize those opportunities. Since an ERP streamlines the way you store, access, and share information, administrative obstacles and institutional efficiencies no longer have to hold you back. If and when a growth opportunity presents itself, your business has all the capabilities necessary to pursue it tenaciously.

Foster a Culture of Collaboration

In a small business environment, each of your staff plays a critical role. That makes it particularly important to support their needs while creating opportunities to leverage their individual skills and areas of expertise in collaborative ways. Once you have removed borders between information by putting an ERP in place, your team is empowered to work together, share resources, and create a sum that is greater than its parts.

Lower Your Overall IT Costs

If each one of your departments relies on its own software, it means you’re paying a significant amount of money for licensing, customization, and maintenance costs. Not only is this approach expensive, it’s ineffective since different software solutions typically can work with each other. Relying, instead, on a single ERP solution costs a lot less to license, is much easier and more reliable to maintain, and improves the performance of your mission-critical IT overall.

Improve Your Strategic Planning

Effective strategic planning is important for all business, but absolutely essential for small businesses that operate closer to the thresholds for success and failure. The right moves can transform your fortunes, but the wrong moves can be impossible to overcome. Being able to examine all your up-to-date data in one place allows you to produce insights you feel confident acting on. Guess work is replaced by careful, nuanced analysis.

Focus on the Big Picture

It’s easy for small business leaders to get bogged down with day-to-day details. As their focus narrows, they lose sight of the big picture and fail to see looming problems and growing opportunities. The perspective provided by an ERP software solution makes it easy to focus on both the present/future and the minor/major at the same time. That allows those at the top to lead rather than simply manage.

The benefits of an ERP don’t appear overnight, and not all ERP solutions are equally suited for small businesses. But with the right solution in place and a buy in from everyone on staff, ERP can have transformative effects. Whether your small business needs saving or simply wants to grow, it’s an option that must be considered.

Anne Lawson is a British writer who keeps her eye on business and trending issues that affect us all. She loves to delve into the real story and give us interesting tidbits we might otherwise miss.