As companies grow, they often reach a stage in which spreadsheets become insufficient to manage the day-to-day business activities. At the point where small businesses need to scale up, ERP solutions for small businesses become necessary. What is an ERP solution, and how does it benefit small businesses?
What Is ERP?
ERP stands for Enterprise Resource Planning. It’s software designed to manage the day-to-day business activities and core functions of business processes including accounting, manufacturing, supply chain management, sales, marketing, and human resources.
An ERP is programmed into the central database of a business, creating a connection between multiple business processes and allowing data to seamlessly flow between them. With data from all the departments, ERPs can automate business processes and provide insights and internal controls.
ERP for Small-Scale Industries
When the technology was first introduced, only large organizations could afford to invest in Enterprise Resource Planning systems. However, with innovation and improvements in the technology, the complexity and cost of ERP systems have dropped drastically, giving small-scale businesses access to the benefits once reserved for larger companies.
ERPs are often implemented in small-scale industries when there is a rise in the number of employees, exploding demand for products or services, or increased production. In rapidly growing small-scale industries, old accounting solutions often prove incapable of keeping up with growth. ERP systems are flexible and can be tailored to meet the needs of every business.
Small-scale businesses can benefit from the shared transactional data created and managed by ERP systems. This interconnectedness and synchronization eliminates data duplication and provides data integrity with a single source that tracks all aspects of production.
Small Scale Industrial ERP Software
In evaluating ERP vendors for small to medium business, emphasis should be placed on the needs of a business. An ERP system can be used as a management tool, customer relationship building tool, employee productivity tool, and more. There are several ERP solutions for small business, but below are some of the best SAP versions for small businesses looking to implement ERP:
- HoneyBook: Popularly regarded as the best solution for end-to-end project management, HoneyBook helps small businesses organize on-premise work activities, connect with clients, and manage invoices.
- Dolibarr: Dolibarr combines ERP with customer relationship management to provide a range of features. In addition to being fully customizable, the free version of Dolibarr meets the requirements of most small businesses.
- DELMIAWorks: This ERP is designed to help small businesses scale their operations with manufacturing and inventory control features, sales manipulation, and financial management.
- NetSuite ERP: Small businesses with an online presence benefit best from NetSuite ERP. It allows small businesses to automate e-commerce, inventory management, supply chain management, financials, and customer relationships.
- Odoo: Odoo is an open-source tool that can be used in managing manufacturing, inventory, projects, and accounting. As an open-source tool, Odoo allows users to integrate over 23,000 third-party apps to further suit their business model and improve the overall efficiency.
Why Should a Small Business Use an ERP System?
What is the importance of ERP for a small business?
- It reduces operational cost. The data analyzed by ERP systems helps small businesses identify best practices and reduce operational costs.
- Because the processes are automated, ERP improves data integrity and financial controls, which reduces business risks.
- ERP helps improve business efficiency by creating a common user experience across all business functions.
- An ERP system improves business insight by monitoring real-time information generated by reports.
- An interconnected ERP system ensures consistency in a business's infrastructure from the back office to the front office.
- An ERP can help enhance collaboration among users sharing data in contracts, requisitions, and purchase orders
In a Nutshell
ERP systems provide a model that helps small-scale industries integrate and manage their employees, business processes, and technologies. Before choosing an ERP software, be sure it suits your business model and integrates with your existing business management software.