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It is a common misconception that Enterprise Resource Planning (ERP) solutions are only appropriate for the largest corporations. ERP is ideal for big businesses that need to bring together a lot of data and a lot of different stakeholders. But the benefits are just as significant when they are applied to small or midsized businesses.
Not only is ERP helpful, it’s increasingly becoming essential. The same kinds of data management issues that were once limited to global giants are now a problem for companies with only a few hundred employees or less than a million dollars in annual revenue.
The good news is that many ERP solutions have been tailored to the needs of small and midsized businesses and priced to be cost-effective over the long term. And once they are in place the effects and improvements are impressive. Here is what you can expect:
- Increased Productivity – Smaller companies can’t afford to waste resources. ERP is an exceptional productivity tool because it eliminates the kinds of delays and confusion that keep quality work from getting done. Staff has access to all the data they need at all times no matter what department they work in. Instead of tracking down a fact, figure, or file, they get straight to work putting it to use.
- Improved Data Flow – Growth is the goal for most SMEs, but it’s easy to fall victim to your own success. Companies that double or triple in size over a short period often discover that data has been lost or compartmentalized. They encounter issues at the exact time they want to preserve their momentum. ERP solutions ensure that data flows freely even as companies add staff, move into new offices, and take on major new projects.
- Enhanced Collaboration – Companies with less staff depend on the individual members in their ranks to do more. ERP is an excellent tool for collaboration because it creates a shared platform for information and a single source for the truth. Basically, it keeps everyone on the same page at all times. Coworkers, colleagues, and collaborators always have their eye on the big picture in pursuit of the next big idea.
- Lowered Operating Cost – IT costs can cripple a business with a limited budget, which is exactly why cloud ERP is so appealing. ERP is able to replace a number of different tools used to manage information. And thanks to the cloud orientation companies can pay a small subscription fee rather than a major licensing fee. ERP may seem like a new investment. In reality, it’s an economical way to eliminate major expenses.
- Leveraged Business Insights – Analytics is changing the way corporations do business, and ERP makes those same abilities available to SMEs too. Not only is it easier to give form and function to large amounts of data. It’s easier to extract insights and automate the analysis with a good ERP. Advanced analytic capabilities give forward-thinking small businesses a serious competitive advantage.
- Optimized Strategic Planning – Small and midsized business face just as much stiff competition as their multi-national cousins. ERP gives strategic planners a much better idea of where their strengths, weaknesses, opportunities, and threats lie. All the data necessary to put things into perspective is in one place and easy to manipulate. Managers and executives can build a lot of confidence into their strategic planning.
Embracing ERP is an opportunity that all business should consider. But getting excited is just the first step. Leaders much also carefully consider what solution and provider they rely on or risk committing to something that is mismatched or overpriced. Don’t wait to embrace ERP, but don’t rush to embrace any specific option.