Small Business ERP – Misinformation
By now, most small to mid-sized business owners and managers have heard the term ERP (Enterprise Resource Planning), but may not clearly understand: What is ERP? Why do we need ERP? and Can we afford ERP?
In this blog post, we will answer these common questions, as well as provide some helpful tips when evaluating Small Business ERP. Click Here To Learn More
What is ERP?
ERP is the acronym given to software solutions that can run parts of or entire organizations. Most Small Business ERP software will include most if not all of the following “Industry Leading Processes and business functions / capabilities:
- Plan-to-Report (GL, Budgeting, Treasury/Banking, Projects, Taxes, Consolidation, Reporting)
- Acquire-to-Retire (Capital Budgets, Account for Assets)
- Procure-to-Pay (Sourcing, Supply Chain, Vendor Management, Quality Control, Goods Receipt, Invoice Payment)
- Order-to-Cash (Campaign Management, Sales Opportunity Management, Pricing, Sales Order, Release/Ship Orders, Invoice Customer, Receive Payment, Revenue Management, Collections, Commissions)
- Plan-to-Fulfill (Operational & Material Planning, Production, Cost Management)
CRM (Customer Relationship Management)
- Market-to-Prospect (Manage; Campaigns, Leads, Opportunities, Promotions, Pricing and Marketing; Planning, execution and analysis)
- Prospect-to-Order (Manage Salesforce, Pipeline, Contract, Communications)
- Service Request-to-Resolution (Service Administration, Manage Customer Interactions, RMA, Field Service, Resolution Management)
- Service-to-Satisfaction (Manage Product Intelligence, Data Quality, Customer Satisfaction)
Most leading “Small to Mid-Market Enterprises” (SME) ERP Solutions cover most if not all of the above. Alternatively, some SME ERP software may also include as part of the core application or with a certified integration, Human Capital Management functionality, such as Payroll, Human Resources, Benefits Administrations, and Employee / Manager Self Services. However, the complexity and ever changing regulations lead most SME to outside payroll and benefits services, such as Professional Employee Organizations.
Utilizing a Small Business or SME ERP eliminates the need for multiple stand-alone applications and / or spreadsheets. Your ERP becomes a single, fully integrated system to manage most, if not all, of your business.
Note: For Small Businesses that rely on Point of Sale or ecommerce, most leading ERP solutions have fully integrated and certified solutions that can be seamlessly plugged into your ERP to handle those sales channels. Further, most Small Business ERP solutions have integrations to some of the more common off-the-shelf ecommerce shopping carts like WooCommerce, Shopify, BigCommerce, etc…
Why do we need ERP?
As noted above, ERP is the single, fully integrated business application that can run your entire business. Without an ERP, companies are left to manage multiple systems that don’t talk or share information, and in the case of managing a business with spreadsheets, the ability to have multiple people accessing the data at the same time is limited. The typical complaints we encounter are:
- Double entry between software and spreadsheets
- No real-time visibility into the business (no single source of the truth or no central location of data)
- Must be at your desk to process or get access to information (no way to access remotely or via mobile)
- Cannot manage “advanced business requirements” in current software (i.e. EDI, customer specific pricing or batch/lot control on inventory)
- No way to manage multiple business locations or entities (companies, warehouses, etc.)
- Waste time managing software, spreadsheets instead of the “business”
- No way to integrate with my “Business Network” (i.e. suppliers, customers, banks, etc..)
As a busy and growing business, you can’t afford to be wasting time with solutions that only cover a fraction of your business or waste time developing software or complex spreadsheets. If you’ve felt some of the frustrations listed here, it may mean you’ve outgrown your current solution or software —and that’s actually good news because it means your business is flourishing!
Can We Afford ERP?
YES – the simple answer is that you cannot afford not to purchase and implement ERP. ERP software becomes the foundation for your growth. Most ERP can pay for themselves through the following:
- Maintain sale order and delivery accuracy
- Improve customer satisfaction
- Reduce in headcount or redeployment of resources to more “value-added” activities.
- Eliminate “stock-outs”
- Free up capital by better managing inventory turns (don’t keep large safety stocks on hand)
- Reduce shipping expenses through better planning and visibility of inventory
Most leading Small Business ERP (applications?) provide options for purchasing and or financing your ERP. This can come in the form of purchasing “Software as a Service” (SaaS) or through financing the purchase of a perpetual software (one time upfront fee, plus annual software maintenance), thus helping manage cash flow over 24-60+ months.
Although calculating specific ROI (Return on Investment) with the purchase of ERP software may not always be easy to do, the real return is improved operations of a growing business, more actionable information to make better decisions and avoid costly mistakes.
Tips when beginning your evaluation of a Small Business ERP:
- Create decision criteria and a rating scale when evaluating ERP (Total cost of Ownership, functionality, VAR / System Integrators capabilities, etc.)
- Determine ERP software deployment options and Licensing options (Cloud / on-premise, subscription or perpetual licenses)
- Take a “Phased Approach” when implementing your Small Business ERP. Don’t try to implement everything at once.
- Remember continual improvement of processes and use of the ERP solution
Why Not Act Now – If it’s time for your company to consider a new ERP, SAP Business One should be at the top of your list. SAP is the world’s largest ERP software provider – over 70% of the world’s transactions touch an SAP system.
SAP Business One is specifically designed for Small to Mid-sized Enterprises and is one of the most truly affordable and scalable solutions on the market, whether you are a start-up or a global enterprise SAP Business One (???)
See How SAP Business One Stacks Up Against other Small Business Solutions Read the analyst report
SAP Business One is:
Complete – All essential business functions (accounting, customer relationship management (CRM), operations, sales, marketing, service, warehousing, and more) are available out of the box. Complete visibility and better control help you run your end-to-end business processes professionally.
Integrated – All business functions come in one package, which makes them easy to set up, use, and optimize. Integration with other systems is possible via standard integration packages or open application programming interfaces (APIs).
Extensible – A flexible platform with 41 localizations and 27 languages allows for growth and innovation. More than 500 pre-integrated, industry-specific, and horizontal solutions are available via SAP partners.
Innovative – Offered via mobile devices and providing real-time data insight, you get access to ground-breaking technologies – and you stay ahead of the competition.
Truly affordable – Start with a basic on-premise or cloud implementation with a few users. Or use the starter package, which includes both software and implementation, as a quick, low-cost, low-risk option with limited capacity for up to five users.