Are You Ready for an ERP Solution?

Are You Ready for an ERP Solution?

ERP solutions are important to improve efficiency in businesses. Small and midsize businesses (SMBs) have an advantage over large companies – they are energetic and are able to quickly meet the evolving needs of customers. Larger enterprises are usually not able to evolve as quickly as compared to SMBs. The use of computer systems and software would further elevate SMB’s edge over large enterprises.

Large companies need complex enterprise resource planning (ERP) systems because they have complex operations and large transactions. For companies that start small, they can usually track and manage their operations in spreadsheets and packaged accounting applications. When companies grow, they typically add specialised applications as the need arises and the budget permits, continuing to do some work in spreadsheets and computer databases.

SMBs usually operate using a blend of applications from several different vendors which also require a substantial amount of manual labor to make the applications work with each other. At some point, senior management comes to the realisation that the organisation needs an ERP system. This decision can be based on production needs, but the lack of financial visibility in the company tends to be the key driver in buying an ERP system.

Chaos Reigns

Some SMB managers thrive on disorganisation. There is inherent chaos to the business as different people do their jobs. Out of necessity, these people communicate with each other—that’s how information is passed from department to department. It works, but few think of their operations as a well-oiled machine. Most SMB managers think of this operation as organised chaos.

Likewise, the IT department is probably taxed with keeping the different servers, databases, and operating systems working smoothly. Invariably, IT problems are fixed by using the quickest and easiest solution, sometimes at the cost of security.

Signs Everywhere

The first problem the SMB has is key people. This isn’t bad by itself, but the SMB manager usually dreads when those key people take a vacation, get sick, or leave because they cannot be replaced quickly, and one or more of these key people almost certainly performs some manual calculation that is critical to the business’s operation, most likely in a spreadsheet. The manual calculation is done to tie data coming out of one application to the input needed for another.

Reporting

As the company grows, senior management is less involved in day-to-day operations. Although this transition is inevitable, it means that senior management must rely on reports to monitor the company’s status. Here’s where an ERP system shines: the system collects all the data and automatically presents them to senior managers as reports. Sure, some custom reporting will probably be necessary, but that’s easy compared with manually assembling all the information into spreadsheets.

Speed Increase

Financial reporting takes less time and effort with an ERP system. As companies grow, the timeliness of their reporting becomes increasingly critical. Handling such reporting within spreadsheets becomes error-prone and time-consuming the larger the company grows. Being able to follow a routine that the ERP system provides means that the company’s financial reporting is done much more efficiently and much more reliably.

Take a test drive on either SAP Business One to immediately see the benefits of an ERP solution for your business.<.p>