In today’s competitive business world, it is becoming increasingly important for small businesses to be able to position themselves strongly in the market.
To achieve this, small businesses must optimize their operational processes and use limited resources efficiently.
This is where ERP systems come into play: An ERP system offers small businesses the opportunity to improve their internal processes and effectively link internal operations.
Due to their high efficiency, ERP systems have become of central importance not only for large, international companies. Their use is also becoming increasingly important for small and medium-sized enterprises.
In this article, we will give you a comprehensive overview of the use of ERP systems and explain how the software can help your small business increase productivity and grow successfully.
27 %
According to a 2020 study by Panorama Consulting Solutions, around 27% of the small companies surveyed had already implemented an ERP system.
Definition: What are ERP systems?
ERP stands for Enterprise Resource Planning and can be translated as “business resource planning”.
An ERP system is an integrated software solution that connects different departments and functions of a company.
An ERP system ensures the smooth exchange of internal company information, thus enabling efficient management of resources such as personnel, finance, inventory, production and sales.
Do small businesses really need ERP software?
Small businesses and startups often underestimate the benefits of ERP software and assume that an ERP system is not necessary for a small business.
However, this assumption is incorrect!
Ultimately, every small business must decide individually which areas of the business should be supported by a software system, which software solution is best suited for this purpose, and what the financial budget is for implementing such a system. More on this in this article.
However, it is generally true that central business areas always benefit from the use of a software system in today’s world, as this ensures the automation and management of process flows.
Why ERP systems are also useful for small businesses
Originally, ERP systems, as the name suggests, were developed for enterprise-sized companies.
In large companies, it’s easy to lose track of resources, data, and internal processes.
But it’s not just large companies that rely on the support of ERP software solutions to manage their day-to-day business.
Even small businesses and start-ups can benefit from using an ERP system.
If your company exchanges a lot of data with external systems, such as shipping service providers and suppliers, an ERP system often proves particularly advantageous for keeping track of everything.
Key selection criteria for ERP systems
Before you decide to implement ERP software, several aspects need to be considered.
First, you should gain an overview and the necessary know-how about the specific requirements of your company.
A comprehensive analysis is important in order to counteract challenges and potential difficulties early on using an ERP solution.
Small businesses in particular often face certain challenges that can negatively impact their business processes.
Below, we have summarized key requirements that you should consider before implementing an ERP solution:
Functional requirements
When selecting suitable software, functional requirements are considered one of the most important requirement criteria.
This also requires ensuring that your chosen ERP system meets the necessary industry requirements.
Consider the compliance requirements.
Before selecting an ERP system, it is essential to verify that all required compliance requirements are met.
Compliance refers to adherence to a company’s rules, regulations, and ethical standards.
Therefore, when implementing an ERP system, it is essential to ensure that all relevant internal and external regulations of your small business are complied with.
It is also important that the software enables audit-proof archiving of all tax-relevant data and documents.
Check the data backup and update function.
Many industries are affected by the fast pace of our modern society. As a result, business processes can be fundamentally restructured and changed within a very short time.
Therefore, clarify in advance to what extent your chosen ERP software can be updated. It is important that your ERP system always remains up-to-date and evolves along with your company.
The security of your data must also be guaranteed at all times.
Handling the ERP system
Another important aspect is the ease of use of the chosen ERP software solution.
How is the software designed? Is it intuitive to use, or is extensive employee training necessary? Do employees enjoy working with the software?
Is it possible to use it from mobile devices?
These are all questions that should be considered before purchasing ERP software.
Implementation of the ERP software solution
Even in small and medium-sized enterprises, it is necessary that your ERP system has the required ERP interfaces to adapt it to the existing IT infrastructure.
Furthermore, before implementing your ERP system, ensure that the data from your old solution can be migrated.
Consider the follow-up costs of your ERP solution.
When purchasing an ERP software solution, you should not only include the ERP acquisition costs in your budget, but also consider the follow-up costs that will arise from employee training, software updates and monthly payments.
Flexibility and scalability
An ERP system should always be able to grow with the company. This aspect falls under scalability. Ensure that your chosen solution also allows for restructuring of internal processes and can adapt to the workflow.
Advantages of an ERP solution
After you have completed a thorough business analysis and selected the ERP system that suits you best, you will start benefiting from the system’s advantages within just a few days.
Below, we present some of the key advantages that the ERP system offers your small business:
Overview of finances
Whether it’s payroll, invoicing, or checking bank statements – with an ERP solution, you have a complete overview of your finances at all times. Fast, comprehensive, and with maximum data security.
Improvement of Customer Relationship Management
An ERP system enables small businesses to centrally manage customer information and improve customer service.
A 360-degree view of customer interactions allows employees to better respond to customer needs and thus offer a personalized customer experience.
Real-time information
With an ERP system, managers and employees have access to real-time data. This means they always know the current status of projects, accounting, inventory, financial data, and other key business figures.
This allows them to react quickly to changing situations and make informed decisions.
Efficiency improvement and process optimization
An ERP system automates and integrates various business processes, leading to a significant increase in the efficiency of your small business.
The smooth flow of information between departments helps to avoid potential bottlenecks and delays, leading to faster and more efficient execution of tasks and projects.
Greater transparency through centralized data management in the ERP system
An ERP system allows you to centralize all company data in a single database.
A transparent view of business processes helps to optimize the execution of analyses and counteract inefficient processes.
Scalability and flexibility
When choosing an ERP solution, it’s important to pay attention to the software’s scalability and flexibility. Good software solutions are designed to grow with your small business.
With optimal ERP software, you can easily add new functions and modules to meet the changing needs of your business.
This allows small businesses to focus on their operations and growth without encountering difficulties with software usage.
Competitive advantage through the use of an ERP system
A successfully implemented ERP solution can give your small business a long-term competitive advantage.
By optimizing operational processes, increasing response times, and improving customer service, you can differentiate yourself from your competition and position yourself accordingly in the market.
ERP systems for small businesses: Challenges
Cloud-based ERP systems for your small business
Cloud-based ERP systems have become increasingly popular in recent years and are a cost-effective alternative, especially for small businesses.
Unlike on-premises systems, cloud software requires no hardware investment and is accessible via the internet. This saves small businesses the expense of purchasing costly servers and complex IT infrastructures.
Cloud ERP solutions often offer greater scalability, allowing small businesses to flexibly adjust resources as needed and as they grow. Choosing the right software provider is crucial for this.
As the company grows, additional user licenses or features can be added without requiring extensive reconfiguration.
The security of cloud ERP systems is generally very high, as reputable providers implement modern security measures to protect all of their customers’ data.
This is a key point, especially for small businesses, as not all companies have a dedicated IT security team.
The future of ERP systems for small businesses
The future of ERP systems for small businesses is promising. With technological advancements and the increasing adoption of cloud-based solutions, ERP systems are becoming ever more user-friendly and accessible across various industries.
Artificial intelligence and machine learning could also play a greater role in the future and further advance process optimization.
By integrating IoT (Internet of Things), small businesses can make their production and logistics even more efficient and access real-time data even more accurately.
Overall, ERP systems are becoming an indispensable tool for small businesses to remain competitive, increase customer satisfaction, and enable sustainable growth.
Conclusion: ERP systems lead small businesses to success
Generally speaking, small businesses can benefit significantly from implementing an ERP system.
By integrating and automating various business processes, you can make internal processes more efficient, optimize your company resources, and make sound decisions.
Therefore, an optimally chosen ERP software solution can help promote the growth of your company and increase your revenue.
However, for small businesses, it is important to be careful when selecting an ERP system and to take into account the specific requirements of your business.
Above all, aspects such as flexibility, scalability, security and usability are crucial factors that should be considered when choosing an ERP system.
ERP systems prove to be just as useful for small businesses as for large corporations and will continue to gain in importance in the future.
With the right ERP software, you can be offered customized solutions that will help your small business stay competitive and grow successfully.
Do you have any further questions about implementing an ERP system? Our team of experts will help you find the right solution for your small business!