One of the questions we’re asked by small to mid-sized business clients is why they should consider investing in enterprise resource planning software. The chief question seems to stem from the idea that ERP software is overkill for such the small company. But here’s the rub; small businesses often teeter on the edge of insolvency; Small Business Trends says more than 50% of all small companies fail in their first four years. We believe any software that helps these ventures achieve competitive advantage during this treacherous time is a necessity.
ERP Equalized - ERP Software for Small Business
Big corporations have been using enterprise resource planning software for years. It was a question of affordability; Before the cloud, only large companies that could afford on on-premise infrastructure and IT team had the capital to purchase ERP software.
Enterprise resource planning software handles revenue and order fulfillment, materials and supply chain, staffing, manufacturing, finance – and more. The benefit has always been that these commerce engines run from one integrated database, making them a smart choice for process improvement. Enterprise organizations always had a leg up on small business because they could run sophisticated analytics to help them spot buying and selling patterns that kept them ahead in competitive markets. Traditionally, small businesses could simply never afford to compete at this sophisticated level.
Over the past five years, ERP software has been democratized so that – literally – any size business can afford it. Instead of having to manage server installation on-site with an IT team, the internet has allowed software-as-a-service models from vendors like Microsoft to offer even the most sophisticated software in a low monthly subscription package.
The disruption of SaaS changed everything for the small business owner. Now, instead of worrying about how they could afford ERP, they can start to think about how they could put it to use to fuel their business growth.
Enterprise Resource Planning Software – Fueling Business Growth
Small businesses planning for growth are often stymied by disorganization. That’s because they typically have a number of siloed software packages that require staff to enter redundant data in multiple places, each time running the risk that a transposed number could harm the business. As small businesses attempt to grow, employees are often stretched to their limits to try to keep up. It’s at this time that the old ways of conducting work become the glitch in the machine, thwarting growth and sometimes causing the business to shut down.
Enterprise resource planning software, like Microsoft Dynamics 365, allows small businesses to work smarter, just like their bigger competitors. The benefit of ERP software for small business is that you can use it to automate basic functions while cutting down on redundant tasks that slow down your productivity.
Instead of manually entering spreadsheets with sales and inventory data, or purchase orders from clients, processing invoices, billing, and tracking communications with clients, an ERP can automatically add in a new order and route a workflow so that billing and order fulfillment are alerted and can begin their processes.
Imagine entering client data once and having those details communicated to every relevant department and you’ll understand how an ERP can save you time while reducing workload.
ERPs for small business can help with:
- Creating transparent processes that eliminate silos. Instead of one department hoarding data, it can be extrapolated and shared across a company and it’s departments. There is no need to send over the data so another department keys it in; once the data is in, it’s shared across all the relevant parts of the business. This is extremely helpful from the standpoint of staying organized. If you’ve ever felt like your backend departments weren’t keeping up with sales, an ERP can keep these disparate, but crucial employees are all on the same page. If you’ve ever had customer data that was relayed incorrectly, an ERP can help.
- Speeding up decision making by creating a full-on view of what’s happening in your business. For example, say you have a sales rep that’s traveled to a client site. What if they could pull up inventory supplies to determine the order delivery time and relay that information to the prospect? Would that help them close the deal? What if that same sales rep could access up-to-the-minute client data on their smartphone as they’re walking in to meet with the client? Administrators will be able to spot red flags that will slow down production. Business leaders will be able to make better decisions with real-time analytics and cash flow.
- Improving productivity by reducing redundant tasks. Enterprise resource planning software keeps employees focused on what’s important. Instead of struggling to enter data in multiple places or switching between several logins and comparing apples to oranges data between software platform A, B, and C, ERP software for small business takes all the data and houses it in one place. The functionality for finance, supply chain, inventory, sales, and more, all stem from that one single source of truth. You’ll be able to run analytics with all the data in mind; changing how and how quickly you make decisions affecting the future of the company.
These points are not an exaggeration; ERP software for small business can do all these things – and more.
Why ERP Software for Small Business?
So, we’re back to the basic question that we’re asked frequently: What are the signs that my small business needs enterprise resource planning software? The first sign is that you are planning on business growth. ERP software for small business is designed for both where your business is now but also where you’re planning on heading in the future. It’s scalable so no matter how large you grow, how many employees, or even the volume of locations – ERP software can handle it.
Here are four red flags that should tell you it’s time for ERP for small business:
- If you feel like you’ve lost control of the inventory in your warehouse.
- If the sales forecast is mostly guesswork or wishful thinking.
- If you’re drowning in orders, products are back ordered, billing is behind, or any other standard business processes that impact bottom line revenue just aren’t working.
- If you feel like you’ve lost control of the business and it’s increasingly difficult to get the facts needed to make business decisions.