When does ERP make sense for small businesses?

ERP is an acronym for Enterprise Resource Planning. It is a modulated system of production management that was first developed to aid traditional manufacturing and has since been developed to help all forms of business to manage their resources and production. Although ERP is still mainly used by large businesses, many smaller businesses are now discovering the power that this service provides.

In recent years, there have been some major changes making ERP technology more accessible to small and medium enterprises. The biggest change is the introduction of cloud based ERP solutions providing online ERP services that can be accessed from anywhere. Traditionally an ERP system required a major investment in business IT hardware and dedicated in-house technical support; this was simply not feasible for small businesses. Today ERP can be accessed via any Internet browser and many solutions have mobile and tablet apps that allow managers to monitor all aspects of their business from any location.

Advantages of ERP

One of the biggest advantages of ERP for any business, large or small is that it can automate many processes. The key to an ERP system is that it provides management a simple way to monitor the health of a business from one central report. Each part of the business inputs data into the system and this is then sent to a central database where the data is analysed and reports prepared in close to real time.

For smaller businesses, ERP provides automated solutions for project management, financials, document management, workflow management, and CRM, human resources and stock control. All businesses can take advantage too, from manufacturing, construction, warehousing, and retail to accounts, telesales and leisure.

For example, one of the first cost-cutting processes is to automate the processing of employee hours and the payroll. Departmental managers, or the employees themselves, can input their hours and this will be sent to the virtual payroll department to process payments. For most companies the payroll is traditionally a time-consuming process that changes very little from month to month. ERP provides a very neat automated solution.

For expanding businesses, ERP provides a scalable solution. As it is a modular system, you can start with the bare minimum to help your business now and add modules that are more powerful later. For example, you can start with accountancy and stock control modules and later add customer services, sales, human resources and marketing modules. A good ERP solution will grow with your needs.

The real benefit of Enterprise Resource Planning is its ability to provide objective reporting for managers to help streamline processes. Every business can make changes to improve efficiencies, many of the best companies today run continuous improvement programs where all employees are invited to highlight bottlenecks and make suggestions to management for better ways of working. ERP allows management to quickly test procedural changes to assess if improvements in efficiency are made.

ERP continues to improve every year and the latest software is able to replace many mundane manual processes, which allows management to focus on building and growing the business.

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Pete White Pete White

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